Introduction
This is the guarantee provided to the investors enjoying the put option distributed by Bank of China at the request of the major shareholders of the non-tradable shares (the secured party) to ensure that the secured party will perform the irrevocable joint and several guarantee of the put option issued by the listed company during the equity division reform.
Features
1. Meet the requirements of the stock exchange for financial institution's guarantee to protect the interest of the put option owners;
2. Assist the listed companies in equity division reform.
Charges
The letter of guarantee fees shall be charged based on the principles and rates determined in accordance with relevant rules of Bank of China.
Target Customers
Major shareholders of the non-tradable shares of listed companies.
Application Qualifications
1. The listed company has worked out the report on equity division reform;
2. The listed company has published the announcement of equity division reform;
3. Competent authorities of the listed company (the State-owned Assets Supervision Administration Commission of the State Council, the Ministry of Commerce and the China Securities Regulatory Commission) have issued relevant approvals.
Process
I. Application for letter of guarantee
1. The applicant fills out an application form or a contract for issuance of a letter of guarantee;
2. The applicant pays margin or submits other counter guarantee;
3. The applicant submits primary documents related to the contract;
4. The applicant submits other documents necessary for issuance of a letter of guarantee as required by Bank of China.
II. Examination and issuance of letter of guarantee
1. Bank of China examines the customer qualification, underlying transaction and relevant documents;
2. Bank of China confirms the customer's margin or credit line and other mortgages;
3. Bank of China examines the written application and form of the letter of guarantee;
4. Bank of China issues the letter of guarantee.
Kind Reminder
1. Amendment to letter of guarantee: The clauses of the letter of guarantee can be amended on request of the guaranteed party and the beneficiary, such as extension of the validity period.
2. Payment/compensation against letter of guarantee: In case the beneficiary claims compensation within the validity period of the guarantee, the applicant should be notified in time. The payment should be made after the guaranteeing bank examines the claim documents and confirms the documents are in compliance with the claim clauses of the guarantee.
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