capital market

Xinhua News Agency, Beijing, August 11th. “China Securities Journal” published an article on the 11th, “Enhancing Trading Convenience and Smoothness. Shanghai and Shenzhen Stock Exchanges Take Multiple Measures to Stimulate Market Vitality.” The article stated that on the evening of August 10, the Shanghai and Shenzhen Stock Exchanges launched a series of measures to improve the trading system and optimize trading supervision to better stimulate market vitality, enhance transaction convenience and smoothness, and continuously enhance market attractiveness.

The Shanghai and Shenzhen Stock Exchanges made it clear that the study will adjust the number of declarations for stocks, funds, etc. listed on the main board of the Shanghai Stock Exchange, and Shenzhen-listed stocks, funds, and other securities from integer multiples of 100 shares (shares) to 100 shares (shares). copies) increments. At the same time, study the introduction of after-hours fixed price trading mechanism for ETF. At the same time, optimize transaction supervision, maintain a smooth transaction and combat malicious speculation, and publish the English version of transaction supervision business rules.

Tian Lihui, dean of the Financial Development Research Institute of Nankai University, believes that measures to reduce the number of securities declarations can reduce transaction costs, improve capital efficiency, and increase market liquidity. ETF after-hours trading measures can enrich trading methods, expand trading time, and improve market convenience. Measures to optimize transaction supervision can better achieve zero tolerance and non-intervention, promote standard disclosure, maintain stable operation, and enhance market transparency.

(File photo, issued by Xinhua News Agency)

　Reduce the cost of trading high-priced stocks for investors

At present, the number of stocks listed on the main board of the Shanghai stock market, stocks listed on the Shenzhen stock market, and funds in the Shanghai and Shenzhen stock markets should be 100 shares (shares) or an integer multiple thereof; The number of securities declarations such as stocks and funds in the Shanghai and Shenzhen stock markets can be increased by 1 share (share).

This move did not involve the Science and Technology Innovation Board. A reporter from the China Securities Journal noticed that when the Science and Technology Innovation Board was established, the requirement of an integer multiple of 100 shares was canceled, and the number of declarations above 200 shares can be increased by 1 share. After the implementation of the differentiated arrangements for the Science and Technology Innovation Board, the market has responded well, which will help improve transaction convenience and increase market liquidity.

According to industry insiders, in the early days of the development of the securities market, in order to facilitate transaction matching, it is usually stipulated that the order declaration must be in the unit of a whole lot, that is, one lot (usually 100 shares) or an integer multiple thereof. However, with the rapid development and efficiency improvement of automated electronic trading, and the continuous improvement of trading mechanisms, the necessity of lot trading has gradually weakened. It has become a common trend in overseas markets to reduce the minimum trading unit, and many markets have adjusted the minimum trading unit to 1 share.

The Shanghai and Shenzhen Stock Exchanges believe that the adjustment of this mechanism will help reduce the cost of investors trading high-priced stocks, facilitate investors to diversify their investments, improve the efficiency of investors’ fund use, reduce the difficulty of investment management for fund managers, and reduce product tracking deviation. The activity and liquidity of the stock, fund and other markets play a positive role in promoting.

Allowing the declaration of odd shares can better meet the trading needs of investors, and can reduce the transaction costs for investors to trade high-priced stocks. In the U.S. stock market, the proportion of non-full lot order declarations and transactions continued to rise. According to the statistics of the US Securities and Exchange Commission (SEC), in June 2022, the odd-share trading volume of US stocks accounted for about 19%, of which the odd-share trading volume of stocks with stock prices in the top 10% accounted for more than 39%. Judging from the actual situation in the domestic market, investors have a greater demand for odd-share declarations of stocks on the Science and Technology Innovation Board, while there are a large number of small and medium-sized investors in the main board market, and their capital scale is limited, so there will be greater demand for odd-share declarations. If the minimum trading unit is changed to 1 share, the number of declarations for odd shares may be increased, further improving the liquidity of the main board.

　Research on the introduction of after-hours fixed price trading mechanism for ETFs

After-hours fixed-price trading refers to the trading method in which investors buy or sell stocks at the closing price through closing pricing entrustment after the auction transaction ends. As of now, after-hours fixed-price trading is only applicable to stocks on the Science and Technology Innovation Board and ChiNext, and ETFs cannot participate in after-hours fixed-price trading. From the perspective of the market, judging from the actual situation of the Science and Technology Innovation Board, after-hours fixed-price transactions are running smoothly, which provides convenience for investors to trade. If ETF introduces after-hours fixed-price trading, it will be of great significance to the development of the ETF market.

The Shanghai and Shenzhen Stock Exchanges believe that after-hours fixed-price trading is an effective supplement to intraday continuous trading. It can not only meet investors’ trading needs for transactions at deterministic prices outside of the auction matching period, but also help reduce the risk of passively tracking closing prices. The impact of volume transactions on intraday transaction prices. During the survey, market participants generally expressed the hope that ETFs would introduce an after-hours fixed-price trading mechanism to further satisfy investors’ needs for trading ETFs at closing prices.

A senior market person told a reporter from China Securities Journal that the system can reduce the impact of large transactions on prices on the one hand. On the other hand, it can meet the after-hours trading needs of investors and increase the trading time of investors, which is conducive to improving market liquidity and improving investment convenience for investors. The level is open to the outside world.

Optimize transaction supervision

Optimizing trading supervision is another important measure taken by the Shanghai and Shenzhen Stock Exchanges to promote an active market.

The Shanghai and Shenzhen Stock Exchanges stated that they will continue to promote the disclosure of regulatory standards, release the English version of transaction regulatory business rules, strengthen rule publicity and investor education, further clarify market expectations, and enhance regulatory transparency.

Industry insiders said that the relevant statements of the Shanghai and Shenzhen Stock Exchanges indicate that they will pay more attention to problem-oriented and goal-oriented in the follow-up transaction supervision, and further improve the pertinence and precision of supervision while not interfering with normal transactions and ensuring reasonable transaction needs. Focus on supervision of abnormal trading behaviors that seriously affect market order and infringe on investors’ rights and interests, such as excessive speculation and suspected violations of laws and regulations. The above-mentioned measures will help prevent excessive speculative risks, crack down on illegal transactions, and create a good market ecological environment for active market transactions and orderly operations.

A reporter from the China Securities Journal learned that in recent years, the Shanghai and Shenzhen Stock Exchanges have carried out a series of training on compliance transactions and business rules for securities companies, fund companies, insurance institutions and other organizations. The market has played an important role in clarifying regulatory expectations and regulating its own trading behavior.

Industry insiders believe that with the continuous increase in publicity of the rules of the Shanghai and Shenzhen Stock Exchanges, it will effectively enhance the predictability and recognition of transaction supervision by market players, and lay a solid foundation for further stimulating market vitality and enhancing market resilience.

2023-08-12 01:37:42
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