Since its birth, the creation of warrants has been criticized by the majority of small and medium-sized investors. The author believes that the management should reform and improve the game rules of this capital derivative as soon as possible to make it fully comply with the "three fairness" principle.
First of all, the NPC should discuss and determine the legitimacy of the creation of warrants as soon as possible. The Interim Measures for the Administration of Warrants, which was launched in July of the previous year, is only a departmental "interim measure" and has not been discussed, demonstrated and adopted by the National People's Congress.
Secondly, the creation of warrants should not be simply transformed into a tool for a few large securities firms to seize the property of the majority of small and medium-sized investors. As we all know, the existing types of warrants in China's stock market are distributed to the holders of tradable shares as "consideration" during the share reform of listed companies. It is designed almost without considering the opportunity and possibility to enable the shareholders of tradable shares to exercise their rights. Its "value" only lies in that the major shareholders of listed companies can not pay or pay less consideration. However, in form, it is a "contract" between non tradable shareholders and tradable shareholders of listed companies. Therefore, in the sense of legal principle and fairness, before "creating" warrants, securities companies should discuss and reach a new transparent "contract" for the creation of warrants with the shareholders' meeting of listed companies, and announce it in advance to ensure that the holders of the original warrants enjoy the right to know. At the very least, it should follow the rules of the Hong Kong Stock Exchange to create T+7, so that warrant holders have at least one week of trading time to choose whether to sell or continue to hold warrants.
Moreover, the creation of warrants should not be purely changed into the joint manipulation of a few major securities firms shares Price and warrant price instruments. From the view of the created warrants, a few securities companies are suspected of jointly manipulating the relevant stock prices and warrant prices, and even the creation of a certain type of warrant is completely consistent. Therefore, the author believes that the implementation of the Interim Measures for the Administration of Warrants should be suspended until discussed, demonstrated and adopted by the National People's Congress. (Li Xiang)
