I hold a CBBC and my broker confirmed that I had sold the CBBC during a pre-opening session. However, the broker later told me the trade was cancelled as a mandatory call event had occurred during the pre-opening session. What is that about?

If a mandatory call event occurs in the pre-opening session, all auction trades in CBBCs concluded during that session and all manual trades concluded after the end of the pre-order matching period during that session are invalid, will be cancelled and will not be recognised by the issuer or the Exchange.

Manual trades refer to trades concluded not through the auto-matching system. An auction trade refers to the automatic order matching of the auction orders during the order matching period in the pre-opening session.

Mandatory call event may also occur at any time throughout the continuous trading session during the trading day. If it occurs during the continuous trading session, no further trade can be concluded via auto-matching. In addition, all trades concluded manually after the mandatory call event will be cancelled.

Please note that since there may be a time gap between the mandatory call event and termination of trading of the CBBC, some CBBC trades concluded after the occurrence of the mandatory call event may be cancelled even though they have been confirmed by brokers. Investors should therefore apply special caution when a CBBC is trading close to the call prices or levels.

You may read further "Can derivative warrants or CBBCs be traded during closing auction session?"