"False foreign capital" is punched again!The interconnection rules of the two places welcome the revised version, and ETFs are also included. How big will the impact will be?

Interconnection ushered in reform again.

On June 24th, the Securities and Futures Commission issued the "Decision on Amending the" Several Provisions on the Interconnection Mechanism of the Mainland and the Hong Kong Stock Market Transaction ". It is reported that the "Regulations" aims to regulate the return of investors in the Mainland and strictly supervise the so -called "fake foreign capital".

According to regulations, Hong Kong brokers may no longer open a new Shanghai -Shenzhen stock transaction permissions for mainland investors. The date of implementation of the policy is the transition period. During the transition period, the existing mainland investors can continue to transaction through Shanghai and Shenzhen stocks. After the transition period is over, existing investors can only sell A shares but cannot buy it.

On the same day, the Shanghai -Shenzhen Exchange also introduced the rules of the above regulations. At the same time, the Shanghai -Hong Kong Stock Connect and Shenzhen -Hong Kong Stock Connect were officially launched. This is another iconic expansion incident in the interconnection mechanism. Some analysts have pointed out that the short -term impact is limited but long -term significance; the impact on A shares may be greater than Hong Kong stocks; in the medium and long term deepening the integration of markets in the two places and promoting the development of the capital market.

"Fake foreign capital" strict supervision

On June 24th, the "Several Provisions of the Interconnection Mechanism of the Mainland and the Hong Kong Stock Market Trading Connect of Stock Market" issued by the Securities Regulatory Commission was aimed at regulating the return trading behavior of mainland investors and strict supervision of the so -called "fake foreign capital".

In recent years, Northbound funds have been staged many times in A shares to pursue rising and falling operations, which has caused the market to suspect that the mainland funds are wearing "foreign skin". Last year, it was also reported that in the mainland's head quantitative private equity, through high -leverage funds in Hong Kong, it used a long and short strategy to operate frequently in the A -share market, and the income was quite abundant. For details, click "Shock!" 2.2 trillion fierce battle shocked "fake foreign capital", tens of billions of quantitative private equity into the protagonist? 5 times leveraged Hong Kong funding, how much impact is the high -frequency trading A shares? "

What is the scale of "fake foreign capital"? How much is the proportion of funds in the north direction? How much does it affect A shares? ... it has always been a topic of market concern. The CSRC said on June 24 that in recent years, some mainland investors have opened securities accounts and trading permissions in the north in Hong Kong, and traded A shares through Shanghai and Shenzhen Stocks. At present, the overall scale of such transactions is not large, and the proportion of transactions in the north -directional transaction remains about 1%. There are about 1.7 million investors, but most of them have no actual transactions. In the past three years, about 39,000 mainland investors with north -direction trading.

From the perspective of supervision, such securities activities do not match the original intention of the introduction of foreign investment in Shanghai and Shenzhen stocks, and most of these investors have opened mainland securities accounts to directly participate in A -share transactions. Two ways of transactions have occurred in cross -border violations. The risks also caused the market to have a lot of so -called "fake foreign capital" in the north -direction trading, which is not conducive to the smooth operation and long -term development of Shanghai -Shenzhen -Shenzhen -Hong Kong -General.

It is reported that from December 17, 2021 to January 16, 2022, the CSRC publicly solicited opinions from the society. During the solicitation period, there were 8 relevant opinions and suggestions during the solicitation period, which mainly focused on further clarifying the operation level of mainland investors.

The CSRC stated that the revision of Article 13, paragraph 1 of the "Regulations" this time, is the rights and interests of shares purchased by investors in accordance with the law through the mainland and Hong Kong stock market transaction interoperability mechanism. No one includes mainland investors. "

On June 24th, the Shanghai -Shenzhen Stock Exchange revised the implementation of the Shanghai -Shenzhen -Hong Kong Stock Connect business simultaneously to further clarify the specific scope of mainland investors. It can be seen that the exchange explains the "mainland investors": "Mainland investors refer to Chinese citizens holding Chinese citizens and legal persons and illegal organizations registered in Mainland China. Chinese citizen of the file. "

Among them, the Mainland identity documents include domestic residents' household registration books, resident ID cards, passports of the People's Republic of China, and Hong Kong and Macau Pass, excluding the Hong Kong and Macau Pass (commonly known as a one -way card). Mainland identity certification documents include domestic residents' household registration books, resident ID cards, passports of the People's Republic of China, and Hong Kong and Macau Pass. Overseas permanent residence identity certification documents include but are not limited to permanent resident cards and permanent resident visas issued by overseas countries and regions.

The branches or subsidiaries established by the Mainland registered legal person and illegal organization can use the identity document (such as a commercial registration certificate, etc.) obtained from overseas (such as a commercial registration certificate, etc.). For example, one of the investors in the joint account belongs to the mainland investors, and the joint account is specified in accordance with the account of the mainland investor account.

It is understood that in order to protect the legitimate rights and interests of existing investors, the Securities Regulatory Commission has made a transitional arrangement. From the date of the implementation of the rules, Hong Kong brokers may no longer open a new Shanghai -Shenzhen stock transaction permissions for mainland investors. The date of implementation of the policy is the transition period. During the transition period, the existing mainland investors can continue to buy and sell A shares through the CSI Stock Connect. After the transition period is over, the existing investors will no longer actively buy A shares through the Shanghai -Shenzhen Stock Connect, and the A shares hold can continue to be sold; the transaction authority of non -holding mainland investors will be canceled in time by Hong Kong brokers.

Clarify the ETF Fund into the interconnection arrangement

Another major reform point of interconnection is that ETF is included in Shanghai -Hong Kong Stock Connect, Shenzhen -Hong Kong Stock Connect.

The "Implementation Measures for the Shanghai -Hong Kong Stock Connect of Shanghai Stock Exchange" and "Shenzhen Stock Exchange's Shenzhen -Hong Kong Stock Connect Business Implementation Measures" issued by Shanghai Stock Exchange on June 24, respectively, clearly clarified the Shanghai Stock Connect, Shenzhen Stock Connect, and Hong Kong Stock Connect. Securities include stock and stock ETF.

At the same time, it is also clear that the stock ETF income and adjustment mechanisms are also clarified. From the perspective of regular adjustment and inclusion in ETF, the requirements of the two exchanges are the same:

(1) Mall at RMB, and the average asset scale in the past six months is not less than RMB 1.5 billion;

(3) The release time of the tracking index of tracking is 1 year;

(4) Among the tracked target index ingredients securities, the stock weights of the stock exchanges (hereinafter referred to as the Shenzhen Stock Exchange) of the Institute and Shenzhen Stock Exchange (hereinafter referred to as the Shenzhen Stock Exchange) accounted for not less than 90%, and the proportion of Shanghai Stock Connect and Shenzhen Stock Connect shares and Shenzhen Stock Connect. At 80%;

(5) The tracking index of the tracking or its preparation scheme meets the following conditions: If it is a wide -based stock index, the single -component equity weight does not exceed 30%. For non -broad -base stock indexes, all conditions should be met: 1. The number of ingredients shares is not less than 30, 2. 2. Single component securities weights do not exceed 15%, and the proportion of the weight coexistence of the first 5 major ingredients shall not exceed 60%, and the total proportion of the weights of securities shall not exceed 60%. 3. The total weight ratio of more than 90%of ingredients stocks are 80%of the top 80%of the stocks listed on the stock exchange in the past year;

(6) Other conditions identified by the Shanghai Stock Exchange or the Shenzhen Stock Exchange.

It is understood that the first income deadline of the Shanghai Stock Connect ETF, Shenzhen Stock Connect ETF and Hong Kong Stock Connect ETF was April 29, 2022.

Analysts of CICC have pointed out that incorporating the qualification ETF is another iconic expansion incident in the interconnection mechanism. Enrich investment products, especially for international long -term investors to allocate A shares, influence A shares may be greater than Hong Kong stocks.

The team explained that after the vigorous development of the ETF fund in China, not only has the ETF products that have covered the CSI 300 such as the CSI 300, but also the ETF products with strong market representatives and covering core assets. The theme of long -term development (such as photovoltaic, chips, new energy, medicine, state -owned enterprises, and dividends, etc.), which also has certain scarcity globally. Therefore, interconnection into the industry ETF is conducive to overseas investors more convenient and refined to deploy the A -share subdivisions and popular tracks.

In the influence of the Integration of ETFs in the interconnection, the China Merchants Securities Strategy Team said that for A shares, because the ETF of the interconnection is clearly limited to the secondary market transaction, it will not directly bring incremental funds to the A -share market. By arbitrage transactions through ETFs' first and secondary market arbitrage transactions have an impact on the price of ingredients stocks. The direct impact on A shares is limited.

The team pointed out that the addition of funds in the north will promote the development of the ETF market in the domestic ETF: on the one hand, ETF is included in interconnection to enrich foreign investment varieties and improve its investment convenience. ETF's liquidity and transaction activity, thereby promoting the enthusiasm of the first -level market to purchase and accelerating the expansion of the ETF scale; on the other hand, as the A -share investor institutionalization accelerates since the opening of the Land Stock Connect in 2014. In the future The proportion of institutions in ETF's investor structure is expected to rise, which will volatilize a positive role in the healthy and stable development of the ETF market.

In the middle and long term, foreign investment in RMB financial assets is one of the strengths of advancing the internationalization process of the RMB. ETFs are incorporated into interconnection and are expected to further enhance the attractiveness of RMB assets and help the internationalization of RMB.

Responsible editor: Gui Yanmin

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