Definition of warrant, what is the meaning of warrant

Warrants are issued by the issuer of the index or a third party other than it, and the holder has the right to purchase or target from the issuer according to the agreement within a specified period or a specific maturity date, or to collect the settlement difference in cash.

1. Definition and types of warrants.

The definition of warrants in the Interim Measures reveals two main characteristics of warrants: 1. Warrants characterize the contractual relationship between the issuer and the holder, and the rights enjoyed by the warrant holder are obviously different from the shareholder rights enjoyed by the shareholders in terms of the content of the rights: that is, unless expressly agreed in the contract, the warrant holder has no right to participate in the internal management and business decision-making of the target ** issuer and the warrant issuer; 2. The warrant gives the warrant holder a right of choice rather than an obligation.

Unlike the warrant issuer, which is obliged to deliver the underlying ** or cash in accordance with the agreement when the holder exercises the option, the holder of the warrant can choose whether to exercise or not exercise the option according to market conditions, without bearing any liability for default.

The Interim Measures cover different types of warrant products:

a. Based on the issuer, it can be divided into corporate warrants and covered warrants. A company warrant is a warrant issued by the underlying ** issuer, such as a warrant issued by the underlying ** issuer (listed company). Covered warrants are warrants issued by a third party other than the issuer (shareholders of listed companies or financial institutions such as companies).

Taking into account the actual development of the market, except for warrants issued to solve the problem of equity division, the Interim Measures do not stipulate the qualifications of financial institutions such as ** companies as issuers of covered warrants.

b. Based on the nature of the holder's rights, it can be divided into call warrants (to purchase the subject ** from the issuer) and put warrants (to the issuer ** subject **).

c. Based on the method of exercise, it is an American-style warrant that stipulates that the holder has the right to exercise the option within a specified period, and a European-style warrant that the holder can only exercise the option on a specific maturity date.

d. Based on the settlement method, it can be divided into physical bond payment settlement warrants and cash settlement warrants. The settlement of actual bond payment is characterized by the transfer of ownership of the subject **, and the issuer must actually deliver or purchase the subject ** to the holder, while the cash settlement method is to make cash payment only on the settlement difference without transferring the ownership of the subject **.

From the above explanation, it can be seen that the Interim Measures fully consider the various warrant schemes that may arise in the pilot of the equity division reform, and also reserve space for the exchange to develop the warrant market in the next step. The warrants issued by Baosteel Group in this equity division reform are European-style covered subscription warrants with real bond payment.

Legal Analysis: A warrant, also known as a warrant, is a financial instrument issued by a **, bank or company and listed on an exchange. According to the way of exercising rights, it can be divided into call warrants and put warrants.

A call warrant gives the holder the right to **, and a put warrant gives the holder the right to sell.

Legal basis: Article 2 of the Interim Measures for the Administration of Warrants of the Shanghai ** Exchange, the warrants referred to in these measures are issued by the ** issuer of the index or a third party other than it (hereinafter referred to as the issuer), and the holder has the right to purchase ** or **subject matter ** from the issuer according to the agreement within the specified period or a specific maturity date, or collect the settlement difference in cash settlement.