Recently, four trading seats of the Shenzhen Stock Exchange (referred to as “SZSE”) have once again failed to be auctioned on the Alibaba Asset Platform, with the starting price slashed from the original 600,000 yuan to 295,500 yuan. This marks the ninth time these seats have failed to be sold at auction. This is not just a foreclosure case but also a microcosm of the changing landscape in the Chinese securities industry, exposing the current lack of market vitality.
On the Alibaba Judicial Auction Platform, the four trading seats of the SZSE were put up for auction with a starting price of 295,500 yuan each. These trading seats originally belonged to a trust company and were later auctioned off as part of asset disposal. This auction is not the first for these four trading seats as they have previously been auctioned off eight times before, all ending in failure.
The aforementioned four trading seats are owned by the Zhuhai Zhongye Trust Investment Co., Ltd., a subsidiary of Sichuan Jingu Leasing Company, on the SZSE.
The trading seats were subject to a civil ruling by the court to compensate Sichuan Jingu Leasing Company at a certain price for the trading seats of Zhuhai Zhongye Trust Investment Co., Ltd., but no transfer registration has been made.
According to the auction notice, the trading seats are still under the name of Zhuhai Zhongye Trust Investment Co., Ltd., as Sichuan Finance Leasing Co., Ltd., does not possess qualifications as a member of the SZSE. Therefore, after the court ruled to compensate Sichuan Jingu Leasing Company at a certain price for these trading seats, they were not transferred but rather locked in by property preservation measures. Upon winning the bid, the trading seats will be directly transferred from Zhuhai Zhongye Trust Investment Co., Ltd., to the bidder’s name.
The auction notice states that there are qualification restrictions for bidders in this auction. Bidders should inquire with the SZSE themselves to determine if they meet the qualifications for transferring trading seats. If the bidder’s lack of qualification for acquiring trading seats results in the failure of the transfer, the bidder will bear legal responsibilities.
According to the SZSE Seat Management Rules, trading seats can only be transferred among members. When a member transfers a seat, a transfer agreement should be signed, and an application should be submitted to the SZSE. The SZSE will review the application within 5 working days from the date of acceptance and make a decision on whether to approve it. Currently, there are 122 members in the SZSE, mainly securities firms and securities companies. As per the requirements, only securities firms and securities companies qualify to participate in the bidding.
The “SZSE Seat and Trading Unit Management Rules” stipulate that trading seats represent the rights of members in the exchange, and members must have seats to conduct transactions on the exchange. Members must acquire at least one seat, and the cost of purchasing one seat from the exchange is 600,000 yuan.
For securities firms, trading seats are not scarce resources, as many securities firms have more than 100 seats, which are sufficient for daily operations. As of March 31, 2025, Zhongtai Securities holds 132 trading seats and 529 trading units on the Shanghai Stock Exchange; 32 trading seats and 522 trading units on the SZSE; and 17 trading units on the GEM/National Stock Exchange.
As of February 28, 2025, Maigao Securities holds a total of 77 trading seats on the Shanghai Stock Exchange, with 19 being in a rented status; 22 trading seats on the SZSE, with 14 being in a rented status; and 3 trading seats on the GEM/National Stock Exchange.
As early as January 2004, there were reports that “The seven seats of Yunnan Securities Company on the Shenzhen Stock Exchange were auctioned at the Guangzhou Trading Plaza. According to industry insiders, this was the first domestic seat auction, and with a minimum application cost of 600,000 yuan for trading seats, the starting price was only 250,000 yuan.”