What should I do if I encounter company actions such as joint stock/delisting/stock splitting/divide

During the financing and securities lending period, when encountering company actions (such as joint ventures, delisting, stock splits, dividends, etc.), investors need to understand the corresponding processing procedures and possible impacts. The following is a detailed guide for dealing with these company actions.

1.If a company takes action during the Hong Kong stock short selling period, who will own the equity? How to deal with it?

According to the “Securities Lending Agreement”, during the period of borrowing securities, if the corresponding stock generates a company action, the securities borrower shall return all the corresponding rights and interests of the borrowed stock to the lender. Among them, the rights and interests that are easy to buy in the market will be paid by the securities borrower for the rights and interests corresponding to the borrowed stock and returned to the securities lender. For the rights and interests that are not easy or cannot be bought in the market, the securities borrower must position all the short positions held within the specified time to ensure that the company’s action rights and interests can be obtained by the lender.

2.Cash dividends/special dividends/stock dividends/stock dividends/stock dividends/stock selection

Regarding cash dividends/special dividends/stock dividends/stock dividends/stock dividends/stock selection, the equity generated by these company actions belongs to the equity that is easy to buy in the market. When the short-selling stocks you hold undergo the above company actions, the short-selling company needs to pay corresponding dividends to the counterparty. You can choose to actively position squaring before the corresponding time to avoid paying additional losses. If you do not position squaring before the corresponding date, the system will automatically freeze your funds and deduct the corresponding funds on the company’s action equity distribution date. Note: In particular, if the company’s action is to distribute shares/select dividends, the system will freeze your account funds at the estimated price and deduct them on the equity distribution day to buy back the corresponding shares. For stock distribution, frozen funds = position number * share distribution ratio * settlement price of the previous trading day; for stock selection and dividends, frozen funds = position number * dividend per share. Frozen funds do not represent the actual deduction amount, and the actual deduction shall prevail. After deduction, your account may enter a dangerous state due to insufficient frozen funds, please be aware.

3.Splitting/Merging, Transcoding

For stock splitting/merging and code conversion, there will be no additional fees for short selling. BiyaPay will carry out corresponding operations according to the announcement of Listed Company.

4.Other company actions

For other corporate actions such as distribution of equity stake/subscription rights, acquisition, delisting, voting, etc. (all corporate actions except the above), the equity of these actions is not easy/cannot be bought back from the market. When the Listed Company to which the short stock you hold belongs issues an announcement, resulting in one of the above corporate actions, the system will send you a message notification, and you can choose to actively position squaring the short position before the specified date in the message. If you do not position squaring before the specified date, the system will force position squaring at market price on the mandatory position squaring date specified in the message.

5.Risk statement

(1)The company’s action rights may become a significant cost of borrowing securities and should be considered in advance.

(2)Due to the risk of cancellation or change of the company’s action at any time, BiyaPay may not be able to obtain the latest information in a timely manner, and after the cancellation or change of the company’s action, it will still proceed with the above processing at the time of notifying you.

(3)The time of company action announcement and the actual time of company action may be very short, and you may be forced to position squaring within a very short time after receiving the message.

(4)Company action is an inherent risk of short selling, and you need to understand and consider this risk carefully before deciding to open a short selling position.