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03 / CAPITAL MECHANISM · V2.0Trading Exits and Liquidity · Who Pays, When a Trade Executes and How Failure Is HandledPreserve the original cash-out path while distinguishing transfers, redemptions and buybacks; liquidity comes from actual payers and available cash.V2.0 Internal Mechanism Design Draft · Additions are proposals; entities, contracts, parameters and applicability remain to be confirmed. Original: Capital.pdf.03Rights submitted for exitEquity / Contractual income rights / Other instrumentsConfirm holder, nature of rights and restrictions firstHandle consumption rights under their consumption contractsVerify rights and channelsTransferability, term, eligibility and disclosureRelevant contract, venue rules and applicabilitySpecific jurisdictions and issuance arrangements require verification01 / Transfers between Holders02 / Contractual Redemption or Payment at Maturity03 / Buyback by Company or Designated EntityIndependent buyer and sellerReal buying demand and complete informationWithout a buyer, remain unexecutedPrice and execution conditionsDisclosure basis, negotiated or venue executionConfirm fees, taxes and settlement arrangementsBuyer pays sellerComplete settlement under transaction termsReconcile cash and rights registration togetherUpdate holder registrationSeller receives net settlement proceedsIssuer records only its own fees/revenueTotal turnover does not automatically become company operating receiptsConfirm contractual payment obligationsWho owes redemption or payment at maturity?Triggers, amount and application procedureVerify maturities and available fundsSources, use restrictions and maturity matchingActual payment coveragePay and settleMake payment and handle fees under the contractCancel/settle corresponding rights and obligationsHandle shortfalls under the contractRetain unpaid obligations and identify the responsible entityContractual negotiation, dispute resolution or recoveryNew issuance or a future IPO is not a payment guaranteeDefine buyback arrangementsEntity, authority and triggersPricing mechanism and budget constraintsReview actual payment capacityUse of funds, payment obligations and liquidityComplete applicable decisions and disclosuresPay and process rightsFollow contract and applicable rulesRecord cash outflow and holding/cancellation separatelyTrack execution outcomes continuouslyActual buyback amount, remaining commitments and payment coverageDo not recognize completion if conditions are unmetDo not depict an unconditional, anytime redemption channelSeparate cash ledgers for issuer and holdersCash from a holder's sale belongs to that holderIssuer capital increases/borrowings are recorded as financingService fees follow actual entitlement, performance and collectionDo not combine the three as “project revenue”Refine information and trading managementDisclose actual operations, finances, rights and risksTrace issuance, lockup, unlocking and transfer rulesMonitor concentration and real transactionsUse rules and information instead of “price control and news-driven exit buying”Liquidity Tests and Failure BranchesNo buyer / No quote / Transfer conditions unmetUnexecuted → Continue holding or choose another contract-permitted exitRecord and handle market illiquidity separately from a payer's cash shortageMonitor by entityUsable cash, current payables, future maturities, net outflows and maturity mismatchesExecuted/unexecuted trades, concentration and remaining buyback/redemption obligationsCondition checks only identify executable paths; showing an “exchange/transfer venue” does not make rights inherently tradable or applicable in every jurisdiction.yutengfei.com · Andrew David W.Y.
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