China Securities Regulatory Commission will support securities fund operating institutions to put forward public fund product innovation programs to the regulatory department of securities and fund institutions, focusing on serving the real economy and wealth management needs. After receiving the relevant product innovation plan, the regulatory department of securities fund institutions shall, in principle, organize relevant demonstration with industry associations within two weeks, including product compliance, effectiveness of risk control measures, investor protection arrangements, etc.
Chinese reporters of securities companies have learned that on the basis of the current classified registration mechanism for conventional products of public offering funds, the registration mechanism of conventional bond fund products will be further optimized from August 1, 2020, so as to improve the registration efficiency.
Support the docking of various long-term funds such as public financing
Attracting medium and long-term capital into the market is not only an important direction of capital market reform, but also a necessary measure to promote the healthy and good ecological formation of capital market. In the current market structure, public funds are the main institutional investors. Giving full play to the advantages of professional investment management of public funds is not only conducive to promoting the stable operation of the market, but also better serving the needs of residents wealth management.
People close to the regulatory authorities told the Chinese reporters of securities companies that in order to implement the relevant requirements of comprehensively deepening the reform of the capital market, the CSRC will vigorously support fund managers to develop public funds in accordance with the law, and effectively connect various long-term funds such as bank public financing, pension and insurance. This is also a response to the markets long-standing call.
Recently, Xiao Gang, former chairman of China Securities Regulatory Commission, said at the summit forum of Chinas fund industry that the development of public funds should further make up for the low proportion of equity funds, especially stock funds. It can promote the system construction of encouraging long-term capital and long-term investment, and optimize the ecology of capital market. Pension and insurance funds should become the cornerstone of public fund investment.
According to a public fund manager of a bank, the introduction of medium and long-term funds will have two main impacts on the capital market. First of all, the investment style represented by insurance funds is more stable, and its strategic asset allocation strategy has a longer target period, which helps to guide the capital market to be more rational, long-term and valuable, and is expected to become the ballast stone of market stability. At the same time, the entry of medium and long-term funds into the market will further enrich the capital source of the market and activate the vitality of the capital market to a greater extent.
From the perspective of wealth effect, pension and other long-term funds entering the market is a win-win choice. Judging from the recent intensive disclosure of the second quarter report, the earning ability of public funds is commendable. According to the analysis of Hongtai wealth research department, compared with the performance of the main industry indexes of a shares, equity funds outperformed the majority of Shenyi class industries in the first half of the year, especially the median income of ordinary equity funds reached 24%, second only to the two hot industries of medicine, biology and leisure services, and the same as that of electronic industry. It shows that active management public funds can better grasp the market trend in the market with significant differentiation in the industry.
Explore the establishment of innovation protection mechanism
According to the understanding of Chinas securities dealers, China Securities Regulatory Commission (CSRC) will support securities fund operators to put forward innovative plans for public offering fund products to the regulatory department of securities fund institutions, focusing on serving the real economy and wealth management needs. After receiving the relevant product innovation plan, the regulatory department of securities fund institutions shall, in principle, organize relevant demonstration with industry associations within two weeks, including product compliance, effectiveness of risk control measures, investor protection arrangements, etc.
If the scheme is confirmed to be free of regulatory barriers, controllable risks and effective investor protection after evaluation and demonstration, the applicant can formally submit the application for registration of new products, and the regulatory department of securities and fund institutions shall perform the procedures of acceptance, examination and registration decision in accordance with the requirements of the regulations.
According to the situation of product innovation, it is necessary to explore and establish an innovation protection mechanism, and set up an innovation pilot protection period of more than 6 months according to the situation. The regulatory department of securities and fund institutions will summarize and evaluate regularly, issue relevant product operation guidelines in a timely manner, and promote the pilot mature products into conventional products and promote them in the industry.
In recent years, in order to promote the healthy development of the public fund industry, on the one hand, the supervision has simplified administration and decentralization, on the other hand, it has insisted on innovation. In October 2019, China Securities Regulatory Commission (CSRC) decided to carry out the reform and optimization of the registration mechanism of mutual fund products, and apply the differentiated registration process to the conventional products declared by different fund managers, which can be divided into two categories: rapid registration and conventional registration.
According to the original provisions, for the conventional products included in the rapid registration process, the written feedback link is canceled in principle, and the registration efficiency is greatly improved. The registration period of equity funds, mixed funds and bond funds is no more than 10 days, 20 days and 30 days, which is more than 2 / 3 shorter than the original registration period and much lower than the legal 6-month registration period. For conventional products not included in the rapid registration mechanism, the registration period of equity, mixed and bond funds shall not exceed 30 days, 40 days and 75 days in principle. After the introduction of the above reform measures, the registration efficiency of conventional products has increased by about 1 / 3.
Some market participants told the Chinese reporters of securities companies that through classified supervision, quick registration will be implemented for managers who are compliant and honest, create long-term stable investment returns for investors, and have good risk control. On the basis of strict risk control, the efficiency of fund registration has been improved in a targeted way, which not only conforms to the principle of macro prudence, but also is conducive to product innovation, so that good products can go to the market more quickly. Through such guidance and demonstration, more public funds are encouraged to innovate on the basis of compliance.
The side pocket mechanism, which will be formally implemented on August 1, is also an innovative measure to promote the development of public funds. The side bag mechanism is another liquidity risk management tool that separates the risk assets that are difficult to be reasonably valued from the fund portfolio assets for disposal and liquidation under the legal conditions, so as to ensure the normal operation of the remaining fund assets. It has been widely used in mature markets. It is conducive to further enrich the liquidity risk management means and protect the legitimate rights and interests of investors.
According to CICC research statistics, the total assets of public funds rose from 17.8 trillion at the end of the first quarter to 17.9 trillion at the end of the second quarter. Among them, the scale of equity assets increased from 2.7 trillion yuan in the first quarter to 3.4 trillion yuan, an increase of 25%. The proportion of equity assets in all fund assets increased from 15% in the first quarter to 19%. According to choice data, as of July 22, 158 equity fund managers had managed a total fund asset size of more than 10 billion yuan.
The registration period of conventional bond fund products has been greatly reduced
In order to thoroughly implement the requirements of release, management and service, deepen the supply side structural reform of the securities and fund industry, and better meet the needs of the industry development, the CSRC has further optimized the registration mechanism of public offering fund products.
Chinese reporters of securities companies have learned that on the basis of the current classified registration mechanism for conventional products of public offering funds, the registration mechanism of conventional bond fund products will be further optimized from August 1, 2020, so as to improve the registration efficiency. The registration period of conventional bond fund products included in the rapid registration mechanism is shortened from 30 days in principle to 20 days. For conventional bond fund products not included in the rapid registration mechanism, the registration period is shortened from 75 days in principle to 45 days. It has greatly improved the registration efficiency of public fund products.
Promoting the reform and optimization of the registration mechanism of public fund products is an important measure for the CSRC to vigorously promote the simplification of administration and decentralization. As early as September 9-10 last year, the China Securities Regulatory Commission (CSRC) held a forum on comprehensively deepening the reform of the capital market in Beijing, and put forward 12 key tasks for comprehensively deepening the reform of the capital market at present and in the future. One of the important contents is to vigorously promote the simplification of administration and decentralization of powers.
Source of this article: Ren Hui, editor in charge of securities companies in China_ NBJ9607