According to the data of the China ** Industry Association, the nominal principal of the stock of over-the-counter derivatives in July 2019 was only 478 billion yuan, and as of the end of July 2023, the scale reached 231 trillion yuan, an increase of nearly 400% in just four years.
Due to the large differences in OTC derivatives, the low degree of standardization and transparency, and the complex structure of embedded leverage, some institutions use derivatives as a "channel" to carry out market violations or evade supervision frequently.
Industry insiders said that with the release of the "Measures for the Supervision and Administration of Derivatives Trading (Second Draft)" issued by the China Securities Regulatory Commission on November 17, it will severely crack down on violations of laws and regulations and evade supervision to maintain market stability.
Recently, in the voting of the shareholders' meeting of Xinchao Energy, the institution was suspected of blinding the brokerage to use over-the-counter derivatives and manipulate the company's proprietary account in violation of regulations, which seriously affected the voting results of the shareholders' meeting of listed companies, which attracted the most attention.
Strange!Shareholders of six brokerages voted against it
On December 1, Xinchao Energy held the third extraordinary general meeting of shareholders in 2023 to consider the "Proposal on the Non-public Issuance of High-yield Bonds by American Sun Companies". Judging from the voting results of the shareholders' meeting, although the proposal was passed, the proportion of negative votes was as high as 499567%。
According to the data, in 2017 and 2019, Xinchao Energy also considered the proposal of the US subsidiary and the grandson company to issue high-yield bonds twice, and both proposals were passed by a high vote (the proportion of votes in favor was 999974% and 999881%), and the proportion of negative votes is less than 1 in 1,000.
In the face of similar high-yield bond proposals, why are the voting results so different this time?
According to a shareholder of Xinchao Energy, the institutions that voted against this time were shareholders of six brokerages: CITIC ** shares *** China Galaxy ** shares *** Shenwan Hongyuan *** China Securities Construction Investment ** shares *** China International Capital Shares *** Galaxy Derui Capital Management *** is a wholly-owned subsidiary of Galaxy **).
The above-mentioned shareholders of Xinchao Energy believe that "none of the shareholders of these six brokerages have made any contact and communication with the company's management before voting, and have never conducted any research or roadshow on Xinchao Energy before." It is incomprehensible that proprietary accounts voted against it. According to statistics, the shareholders of the six brokerages voted against a total of 519,677,250 shares, accounting for 41 of the negative votes05%。
It is said that the proprietary business of the brokerage will be diligent and conscientious, and those who participate in the voting will make objective and independent professional judgments, but the shareholders of the six brokerages voted against it at the same time without any communication or research with the listed company
A new move to seize power?Alleged exploitation of optionsCircumvention of regulation
According to the above-mentioned shareholders of Xinchao Energy, the same institution has signed a "OTC ** option risky structured trading plan contract" with two of the shareholders of the above-mentioned six brokerages, and the content of the two contracts is highly consistent, and it is not excluded that it has also signed similar contracts with the other four brokerages.
Risky option is a kind of financial derivative, which is essentially a combination of ** in-the-money call option + sell out-of-the-money put option, so as to achieve a product with a linear profit and loss effect. Risky options are leveraged trades, and institutions can use less capital to leverage larger**.
If the institution uses six securities firm shareholders to vote at the extraordinary general meeting of shareholders through leverage, it may be suspected of carrying out leverage manipulation and violating the rules of influencing the decision-making of listed companies.
The Xinchao Energy shareholder also mentioned that the total shareholding of the above six brokerage shareholders has reached 764%, and compared with the top ten shareholders disclosed in the third quarterly report, the shareholding of some of the above-mentioned brokerage shareholders is still changing, indicating that recent transactions have been carried out.
According to Article 63 of the "** Law", when an investor holds or jointly holds with others through an agreement or other arrangement of 5% of the issued voting shares of a listed company through the ** transaction of the ** exchange, it shall, within three days from the date of the occurrence of the fact, make a written report to the ** regulatory authority and the ** exchange, notify the listed company, and make an announcement that the ** of the listed company shall not be traded again within the above period. According to the above-mentioned "** Law" information disclosure and ** trading regulations, the shareholders of the six securities firms should have notified Xinchao Energy of the recent changes in shareholding in a timely manner, and submitted a written report to the China Securities Regulatory Commission and the exchange. Curiously, as of now, Xinchao Energy has not issued an announcement on the change of shareholding of shareholders of six brokerages.
In addition, Article 15 of the Measures for the Supervision and Administration of Derivatives Trading (Second Draft for Comments) prohibits fraud, insider trading, market manipulation, benefit transfer, regulatory evasion and other violations of laws and regulations through derivatives trading, and Article 18 prohibits the manipulation of the market or market through derivatives trading. Article 19 stipulates that it is forbidden to circumvent the rules of shares ** and restricted sale through derivatives trading. The above-mentioned mysterious institution and the shareholders of six securities companies privately signed the "OTC Options Risky Structured Trading Plan Contract", which is obviously suspected of using derivatives as a "channel" to circumvent market supervision.
At present, there are various indications that in this Xinchao Energy voting incident, the legality and compliance of the above-mentioned mysterious institutions suspected of using shareholders of six securities companies to vote are doubtful. It is suspected of influencing the decision-making of listed companies and disrupting the market through leveraged operations, which may cause significant damage to the interests of listed companies and their shareholders. It expands its shareholding in violation of regulations and forms a concerted actor relationship, which may endanger the stability of the operation and management of listed companies.
The equity of Xinchao Energy is highly dispersed, and in recent years, it has been constantly pursued and intercepted by barbarians such as the "Delong system", and has staged many "seizures of power" dramas. In the history of Xinchao Energy, Delong used extraordinary means to acquire shares, maliciously launched the so-called "extraordinary shareholders' meeting", trying to "seize power". At present, the above-mentioned mysterious institutions have used leverage to hold shares in violation of regulations have reached 764%。If the old trick is repeated, this will undoubtedly cause great harm to Xinchao Energy and the majority of shareholders (including the six brokerages themselves).
Derivatives regulationIn action!There is still a long way to go
In fact, the SFC is already taking action on the risks and regulatory loopholes posed by OTC derivatives.
On November 17, the China Securities Regulatory Commission (CSRC) solicited public comments on the Measures for the Supervision and Administration of Derivatives Trading (Second Draft). Among them, it is proposed to improve the regulatory rules and severely crack down on the use of derivatives as a "channel" to circumvent market supervision, including prohibiting the circumvention of the position limit system, the information disclosure system, and the first restricted sale system through derivatives trading, prohibiting the implementation of first-class trading, insider trading, and market manipulation through derivatives trading, and prohibiting derivatives operating institutions from carrying out derivatives transactions with the listed company's major shareholders, actual controllers, directors, supervisors and senior executives of listed companies, as well as the largest restricted entities.
Cheng Xiaoyong, deputy general manager of Guangzhou Financial Holding Research Center, said in an interview with reporters that the China Securities Regulatory Commission (CSRC) conducted a second public consultation on the "Measures", mainly because derivatives transactions are relatively complex, and the regulatory authorities are also very cautious in formulating relevant regulatory laws and regulations.