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The creation of warrants refers to the act of increasing the supply of warrants after the listing and trading of warrants, which is applied for by a qualified institution and is completely consistent with the terms of the original warrants.
For example, the Notice on Matters Related to the Creation of WISCO Warrants by Securities Companies issued by Shanghai Stock Exchange on November 21, 2005 allows securities companies that have obtained the qualification for innovation pilot to create WISCO warrants. The notice requires that "the creation warrant is the same as the WISCO call warrant or WISCO put warrant, and uses the same transaction code and exercise code".
What is the warrant creation process?
If an innovative pilot securities firm is going to create 100 million WISCO warrants, it must simultaneously open a warrant creation account and a performance guarantee account, deposit 100 million WISCO shares in the performance guarantee account, and then submit the creation application to Shanghai Stock Exchange. After being approved, its warrant creation account will receive 100 million WISCO warrants, and the total circulation of WISCO warrants in the market will increase by 100 million; If he plans to create 100 million WISCO put warrants, he should deposit 313 million yuan in the performance guarantee account, and he will get 100 million WISCO put warrants after the establishment application is approved.
What about the cancellation of warrants?
The cancellation of warrants refers to the originator (i.e negotiable securities The company) applies to Shanghai Stock Exchange for cancellation of all or part of the warrants in the designated warrant creation account. After the application is approved, the number of warrants in the performance guarantee account is equal to the number of cancelled warrants shares Or cash will be unlocked accordingly. The Shanghai Stock Exchange requires that the number of warrants applied for cancellation by the same founder shall not exceed the number created by him previously.
Suppose an innovative pilot securities firm created 100 million WISCO warrants and bought back 80 million WISCO warrants from the market after selling them. After the application for cancellation is approved, 80 million shares of WISCO will be unlocked in its performance guarantee account, and the total circulation of WISCO warrants will also be reduced by 80 million shares. (Xiaoran)
Sina statement: The content of this article is purely the author's personal view, only for investors' reference, and does not constitute investment advice. Investors operate accordingly at their own risk.
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