The China Securities Regulatory Commission (CSRC) issued five measures on April 19 to further expand and optimize the Shanghai-Shenzhen-Hong Kong Stock Connect mechanism, help Hong Kong consolidate and enhance its status as an international financial center, and jointly promote the coordinated development of the capital markets of the two places.
These five measures mainly focus on:
- Expand the range of eligible products for stock exchange-traded funds (ETFs) under the Shanghai-Shenzhen-Hong Kong Stock Connect;
- Include infrastructure securities investment funds (REITs) in the Shanghai-Shenzhen-Hong Kong Stock Connect;
- Support the inclusion of RMB stock trading counters in the Hong Kong Stock Connect;
- Optimize mutual recognition of funds;
- Supporting leading mainland enterprises to list in Hong Kong.
After the measures were announced, the Shanghai, Shenzhen and Hong Kong exchanges said they had reached a consensus on expanding the scope of exchange-traded funds (ETF) through the Shanghai-Shenzhen-Hong Kong Stock Connect.
The optimization of the exchange-traded open index fund (ETF) mainly includes two aspects:
- Lower size requirements for exchange-traded funds (ETF);
- Lower index weighting requirements for exchange-traded funds (ETF).
It is expected that the formal implementation of relevant optimization measures will take about three months to prepare.
In this measure, it is specifically proposed to support eligible mainland industry leading enterprises to list in Hong Kong. It is understood that in the past year since the issuance and implementation of the overseas listing filing management system rules, 72 enterprises have completed the filing of initial public offerings (IPO) in Hong Kong. Since the implementation of the overseas listing filing system one year ago, the channels for listing in Hong Kong have been smooth. The measures will be implemented in the future and will strongly support the standardized development of mainland enterprises using the two markets and two resources. At the same time, it will bring high-quality listed company resources to the Hong Kong market and enhance the competitiveness and attractiveness of the Hong Kong market.
In addition, the China Securities Regulatory Commission also issued the “Regulations on the Management of Securities Trading Fees of Publicly Offered Securities Investment Funds”, which will be officially implemented from July 1, 2024. The regulation mainly covers four aspects: first, adjust and reduce the commission rate of fund stock trading; The second is to reduce the upper limit of the distribution ratio of securities trading commission of fund managers; The third is to comprehensively strengthen the compliance internal control requirements of fund managers and securities companies; The fourth is to clarify the disclosure content and requirements of trading commission information at the fund manager level.
At the same time, the CSRC also issued the “16 Measures for the high-level Development of technology Enterprises in the Capital Market”, which aims to put forward supportive measures from listing financing, mergers and acquisitions, bond issuance, private investment and other aspects to better serve scientific and technological innovation and promote the development of new quality productivity.
The implementation of these measures will help promote the high-quality development of the capital market, enhance the vitality and competitiveness of the market, and provide investors with more diversified and convenient investment channels.
