Chapter 7 stock trading procedures and methods section 1 account opening

Generally, customers cannot directly access the stock exchange to conduct on-site transactions. Instead, they must entrust their securities dealers or brokers to conduct on their behalf. The client's entrusted trading is the basic way of trading on the stock exchange. It refers to the activity in which investors entrust the securities dealers or brokers as Agent customers (investors) to conduct stock trading. The stock trading procedure generally includes several processes, including account opening, entrusted trading, transaction, liquidation and delivery, and transfer.

In Shanghai, China, this kind of work is handled by the Shanghai Stock Exchange. Investors issue ID cards and passbooks for stock accounts. stock accounts are similar to stock passbooks, which are both code cards for investors, it is also a valid credential for paying dividends and buying and selling stocks.

In Shenzhen, anyone who wants to buy a stock must first go to any professional bank (ICBC, China Construction Bank, China Agricultural Bank, China Bank) and Comprehensive Bank (Shenzhen Development Bank) in the city) the city's computer network and deposit settlement offices are involved in the deposit procedures, and the bank and account are determined for future dividend delivery. This account can also be used as a dedicated account for delegated sales funds, so that the liquidation and delivery can proceed smoothly. Investors can use their ID cards and passbooks to go to the registration and transfer company to apply for a shareholder code card. Each investor can only establish one code. When investors subscribe to new shares, buy and sell orders, or transfer proxy shares, you must enter your own code on the relevant creden.

Investors engaged in securities transactions can choose to open the following accounts:
　　(1) cash account.For customers who open such accounts, all their transactions are completed in cash. When purchasing a stock through a broker, you must pay the full price on or before the liquidation date in cash. Similarly, when selling a stock, the stock must also be handed over to the securities broker on or before the liquidation Day, and the securities broker will pay the price to the account. This account is currently used in China.

(2) deposit account. A deposit account is also called an ordinary account. When a customer opens this account, they can buy all the stocks by paying partial cash (that is, the deposit, the difference between the full price and the deposit is calculated by the securities dealers based on the market interest rate. The purchased shares are sold as collateral by the securities dealers. For example, if the deposit ratio is 55%, the customer who opens the deposit account only needs to pay 55% of the price of the purchased stock when buying the stock. For the remaining 45% price, a loan is provided by a securities brokerage company.
(3) joint account. Two or more individuals open an account with the broker. If one party dies, the other party can sell the shares without waiting for the court's decision. This is often seen in the relationship between husband and wife, parent and child, and other relatives. More than two relatives can also open a joint account to reduce commission.
(4) trust account. This is a transaction account for the protection of minors. Laws in many countries prohibit the possession of a certain number of shares due to inheritance or gifts from friends and friends. In order to resolve this conflict, a securities company sets up a comparative account, with the protection of minors trading on behalf of them.
(5) authorize an account. This is a special account. When an investor opens this account, he will authorize a securities company to deal with the stock at random based on market conditions without prior consultation, it usually opens such accounts when investors fully trust securities companies. However, many national laws have recently banned the use of such accounts. Many securities companies have also refused to open the above-mentioned accounts to avoid disputes.

The above Accounts (2), (3), (4) and (5) are not yet in use in China.

After an account is opened, the relationship between the investor and the securities company as the authorization person and the agent is basically determined. Investors entrust a securities company as the authorizer to buy and sell shares on behalf of the securities company. The securities company, as the agent, is responsible for seriously entrusting the guest rooms and keeping the client confidential. If any party loses its trust, it shall be liable for breach of contract.