Newsletter
OTC SECURITIES EXCHANGE MEASURES FOR BIDDING OF OTC SECURITIES PROMULGATED BY SFC
The ROC Over-the-Counter (OTC) Securities Exchange Measures for Bidding of OTC Securities were promulgated by the Securities and Futures Commission (SFC) on 27 January 1999, to support OTC securities credit transactions and bidding of OTC shares by securities firms and other financial institutions and to facilitate brokered bidding for OTC securities by investors.
The measures provide that securities firms engaging in bidding of OTC shares on behalf of their clients should fill out applications and submit them to the OTC Exchange. If the client is a foreign investor, documentation of government approval should also be submitted. If the client is a ROC company, the provisions of the Company Law concerning total reinvestment ceilings should not be violated.
For settling and matching purposes, the bidding by the securities firms can be carried out from 2:30 pm to 3:30 pm on the day of the application. In cases of bidding of stock with a total issue of less than 20 million shares, the bidding volume must be at least 20% of the total number of issued shares. However, this restriction does not apply to specially approved cases of brokered bidding applications by foreign or overseas Chinese investors or securities firms.
When handling bidding of OTC shares, the OTC Exchange should collect services charges from both buyer and seller. During bidding periods, ordinary trading in such shares may be suspended.