Trading mechanisms optimized to boost capital market

To further invigorate the capital market and boost investors' confidence, trading mechanisms at the A-share market will be further optimized, including reducing transaction fees, lowering commission rates charged by securities brokerages and studying the possibility of extending the trading hours for stocks and bonds, the China Securities Regulatory Commission said on Friday.

In responding to the CSRC, Shanghai and Shenzhen bourses announced later on Friday that the transaction fees for A-share and B-share securities at the two exchanges will be lowered from 0.00487 percent to 0.00341 percent of the transaction amount, or down by 30 percent. Beijing Stock Exchange, which lowered the transaction fees by 50 percent to 0.025 percent in December 2022, also announced on Friday a further reduction to 0.0125 percent for such fees. The adjustments will take effect on Aug 28.

Meanwhile, to make trading more convenient in the A-share market, the scope of margin trading will be further expanded while the margin lending fees will be reduced. Exchange-traded funds will be included as the refinancing targets, said the CSRC.

Supervision will be optimized and more transparent. Illegal stock selling will be severely punished. Reports for programmed trading will be launched when appropriate, according to the country's top securities watchdog.

More mid to long-term capital should be introduced into the A-share market to increase the ratio of equity investment, according to the CSRC. The national social security fund, basic pension fund and annuity fund will be supported to expand their capital market investment scope. The rules for identifying strategic investors so that mid to long-term capital, such as the national social security fund, can participate in the non-public offering of listed companies.

Regulatory requirements on large-scale shareholding information disclosure, short-term trading and restrictions on reducing holdings should be optimized. The supply of derivatives should be enriched both at the exchanges and over-the-counter markets. There should be more products that personal pension scheme can invest in, such as the index funds, said the CSRC.

Efforts should also be made to promote the pilot program for insurance funds' long-term investment in stocks. Commercial banks' wealth management funds should improve their capabilities in equity investment, according to the CSRC.

shijing@chinadaily.com.cn