Similarities and differences between property rights exchange and securities exchange places

Property rights exchange is equivalent to the domestic third board market, which is a trading platform for equity, property rights, creditor's rights and intellectual property rights, and a non-tradable share trading market. The stock exchange is the trading market for all tradable shares. Mainly refers to the place where financial products are traded, such as stocks, futures or spot, bonds, etc.

What's the difference between a property rights exchange and a stock exchange?

Article 39 of the Securities Law stipulates that "stocks, corporate bonds and other securities that are publicly issued according to law shall be listed and traded on a legally established stock exchange or transferred at other stock exchange sites approved by the State Council".

As for the stock exchange, we all know that it refers to the Shanghai Stock Exchange and the Shenzhen Stock Exchange, but for other stock exchange sites approved by the State Council, some scholars point out that it refers to all kinds of property rights exchanges currently opened in various places.

But in fact, the local property rights exchange is approved by the local government and cannot belong to other securities trading places approved by the State Council. The Interim Regulations on the Administration of Stock Issuance and Trading also clearly stipulates that "stock exchange places" refer to approved stock exchanges and stock exchange quotation systems. In addition, in 2006, the Securities Industry Association issued the Announcement on Risk Tips for Preventing Illegal Securities Activities, which once again clarified that the only legal securities trading places in China at this stage are the Shanghai Stock Exchange, the Shenzhen Stock Exchange and the share transfer system of securities companies, and called on investors to invest in the securities of the above places.

There are also many investors who choose to invest in the shares of unlisted joint-stock companies, but the company law also requires shareholders to transfer their shares in legally established securities exchange places or other ways stipulated by the State Council.

In fact, in view of the limited acceptance capacity of the two stock exchanges in Shanghai and Shenzhen, in order to explore and solve the problem of share transfer of a large number of unlisted joint-stock companies, many trading places all over the country, including property rights exchanges, have made bold attempts to this, and once established various over-the-counter trading systems for share transfer of unlisted companies. There are also a lot of disputes between investors and non-listed companies. Until 1998, in order to rectify the financial order and prevent financial risks, the China Securities Regulatory Commission issued the Plan for Clearing and Rectifying Illegal OTC Stock Trading, which completely banned all kinds of property rights exchanges, securities trading centers and securities trading automatic quotation systems from engaging in OTC equity securities trading activities.

In fact, China's property rights exchange is mainly a specific place to serve the transaction of state-owned assets and collective property rights. According to the laws of our country, the transfer of state-owned assets and collective property rights should be publicly traded in the property rights exchange. The property rights exchange has indeed played a very positive role in promoting a large number of behaviors involving state-owned assets such as the restructuring of state-owned enterprises in China. Therefore, some experts, scholars and local governments are vigorously promoting the above investment activities in the property rights exchange.

For investors, what is the difference between trading in the property rights exchange and trading in the above-mentioned formal trading places? What kind of consequences will it have? It deserves investors' attention.

First of all, China's laws stipulate that securities investment and share transfer of non-listed companies should be carried out at the prescribed securities trading places. As mentioned above, the property rights exchange is not a securities trading place as stipulated by law. Then, once investors violate the existing laws on trading places and trade in such places, it is obvious that such trading behavior is invalid. Once a dispute occurs, it is difficult for investors to guarantee their own interests.

In fact, it is very common for investors to transfer shares privately at present, and such cases of stock trading disputes emerge one after another. Once the market changes, one party to the agreement will often go back on his word and go to court. However, according to the current law, the court can only invalidate the order, and the return of goods by both parties will obviously harm the interests of one party.

Secondly, for the transfer of shares of unlisted companies by means of share custody in property rights transactions, it is usually impossible to apply for industrial and commercial change registration, that is to say, investors can often only be anonymous shareholders. Although the Company Law and the people's courts in some provinces and cities including Shanghai have recognized that dormant investment is effective under certain conditions, that is to say, although it cannot be against a third party, the private transfer of shares by investors can also have legal effect, but it cannot violate the mandatory provisions of laws and regulations. However, different courts may have different understandings of whether this behavior of transferring shares at a place other than the prescribed place violates the mandatory provisions, which will easily lead to uncertainty in the determination of the effectiveness of this investment behavior.

In addition, once the company, driven by interests, transfers the shares originally transferred to investors to a third party and goes through industrial and commercial registration, the interests of investors will be even more insecure.

Therefore, in order to protect their own interests to the maximum extent, I hope that investors must choose to conduct investment transactions in formal trading places stipulated by law.