News: Shenzhen Stock Exchange issued the notice of pre deposited funds for the exercise of put warrants instead of shares
http://www.sina.com.cn 16:38, August 22, 2006 Sina Finance
Sina Finance News Shenzhen Stock Exchange today issued the Notice on Pre deposited Funds for Exercise of Put Warrants of Share Reform to the issuers, performance guarantors and sponsors of the put warrants of share reform. The full text is reproduced as follows:
Notice on Pre deposited Funds for Exercise of Put Warrants Changed from Shares
Issuers, performance guarantors and sponsors of put warrants for share conversion:
In order to ensure that the issuer of the share reform put warrants deposits sufficient funds before the exercise and promote the smooth exercise of the share reform put warrants, Shenzhen Stock Exchange (hereinafter referred to as "the Exchange") hereby stipulates the following matters concerning the pre deposited funds for the exercise of the share reform put warrants issuer (hereinafter referred to as "the Issuer"):
1. The sponsor shall assist the issuer to calculate the Delta value of the put warrants three trading days before the starting date of the exercise of the put warrants for share reform and report it to the Exchange for approval. The delta value shall be calculated as follows:
(1) The calculation formula of Delta value should meet the requirements of Black Scholes option pricing model;
(2) The risk-free rate of return is based on the current one-year bank Deposit interest rate Calculation (before tax);
(3) Subject negotiable securities The volatility is calculated based on the historical volatility of the underlying securities of one year backward from the three trading days prior to the exercise of the warrants.
If the calculation method needs to be adjusted, the issuer shall provide sufficient reasons and report to the Exchange for approval.
2. Two trading days before the starting date of the exercise of the share changed put warrants, the issuer shall transfer the funds required for the exercise to the special exercise fund account opened by it, and the initial deposit of funds shall not be lower than the following minimum standards:
Minimum standard of initial pre deposited funds=number of warrants listed × exercise price × exercise ratio × absolute value of Delta value.
3. If the absolute value of Delta calculated by the sponsor is less than 0.01, the absolute value of Delta in the minimum standard formula for the initial deposit of funds shall be 0.01.
4. After clearing on any trading day (T day) of the exercise period, if the pre deposited funds for the exercise of put warrants cannot meet the requirements for the exercise settlement on T+1 day, the issuer shall make up the shortfall of the required funds before 16:00 on T+1 day and deposit additional exercise funds.
5. The amount of each additional pre deposit of the issuer shall not be less than the initial pre deposit, but if the amount of the proposed additional pre deposit plus the cumulative pre deposit exceeds the number of warrants listed × exercise price × exercise proportion, the amount of the last additional pre deposit=(number of warrants listed × exercise price × exercise proportion) - cumulative pre deposit.
6. If the issuer's book funds are insufficient, the performance guarantor shall, in accordance with the requirements of the performance guarantee agreement, perform the irrevocable joint and several liability for performance as soon as possible, and timely supplement the funds required for the exercise of the warrants to ensure the smooth exercise of the warrants.
Notice is hereby given
Shenzhen Stock Exchange
August 21, 2006
