A-share securities shorting puts on the "tightening curse", how to go about policy guidance in the future?
The securities lending system of listed companies has been tightened!
On October 14, the China Securities Regulatory Commission issued an announcement entitled "Adjust and optimize the relevant systems of securities lending to better play the role of counter-cyclical adjustment". According to the announcement, the CSRC optimized the securities lending business from two aspects: the securities lending end and the lending end. At the same time, the Shanghai and Shenzhen exchanges have also issued announcements to cooperate with the reform of the securities lending system and make specific work arrangements.
Xu Chi, head of strategy at Zhongtai Securities Research Institute, said in an interview with Shell Financial Reporter that under the current market conditions, optimizing the relevant systems of securities lending is conducive to giving play to the counter-cyclical adjustment function of margin and securities lending business, standardizing market short-selling behavior while regulating and maintaining market capital expectations, thereby improving the overall investment and financing confidence of the capital market.
Securities lending puts on the "tight curse", and the lending end of securities lending is deeply optimized
According to the announcement, in order to further strengthen the counter-cyclical adjustment of securities lending business, the CSRC has fully demonstrated and evaluated the system of securities lending and strategic investors lending and placing shares according to the current market conditions, and tightened the lending of securities lending and strategic investors placing shares in stages under the premise of maintaining the relative stability of the system.
Specifically, the CSRC has optimized it from two main aspects. First, at the end of securities lending, the margin ratio of securities lending will be increased from not less than 50% to 80%, and the margin ratio of private securities investment funds participating in securities lending will be raised to 100%, giving play to the counter-cyclical adjustment role of the system. At the same time, securities companies are urged to establish and improve the allocation mechanism, penetration verification mechanism and access mechanism of securities lending, and strengthen the management of securities lending transactions.
Yang Delong, chief economist of Qianhai Open Source Fund, believes that the margin ratio of securities lending has been significantly increased this time, which can effectively reduce the amount of funds for securities lending.
Second, at the lending end, according to relevant laws and regulations, the lending of shares placed by strategic investors can be adjusted, and in order to highlight the focus of senior executives of listed companies on their main business, the lending of special asset management plans established by executives and core employees of listed companies through participation in strategic placement is abolished, and the lending methods and proportions of other strategic investors in the early stage of listing are appropriately restricted.
Yang Delong said that the adjustment on the lending end reflects the CSRC's strengthened supervision of securities lending business, reducing the amount of securities lending in the market, which is of great significance to the active capital market to boost investor confidence, and also reduces investors' concerns about some private equity funds and other investors shorting through securities lending. It is beneficial to boost market confidence and promote the stabilization and recovery of the capital market.
"Under the current market conditions, optimizing the relevant systems of securities lending is conducive to giving play to the counter-cyclical adjustment function of margin and securities lending business, standardizing market short-selling behavior while regulating and maintaining market capital expectations, so as to improve the overall investment and financing confidence of the capital market." Xu Chi pointed out.
The Shanghai and Shenzhen Stock Exchanges simultaneously issued announcements to optimize the securities lending and lending mechanisms
On the same day, the Shanghai and Shenzhen Stock Exchange issued the Notice on Optimizing Securities Lending Trading and Securities Lending Arrangements (hereinafter referred to as the "Circular"), optimizing the relevant arrangements for securities lending trading and securities lending under the premise of relatively stable systems, strengthening the counter-cyclical adjustment function of securities lending, and maintaining the order of securities market transactions.
According to the arrangement, when investors sell securities trading, the margin ratio shall not be less than 80%. Among them, if the investor is a private securities investment fund, the margin ratio of securities lending shall not be less than 100% when selling securities trading. For securities lending contracts that have not been settled before, the margin ratio requirement for securities lending is still implemented in accordance with the original regulations.
In addition to adjusting the margin ratio for securities lending, the Circular also restricts and regulates the lending of allotted shares by strategic investors.
If an investor holds restricted shares or strategic placement shares of a listed company, or holds shares subject to transfer restrictions, such as a major shareholder who is transferred by way of a block transaction or a specific shareholder who reduces its shareholding, the investor and its affiliates shall not sell the shares of the listed company through securities during the restriction period.
In addition, the Circular also indicates that the issuer's senior management and core employees participating in the special asset management plan established by the strategic placement are not allowed to lend their allotted shares within the promised holding period. At the same time, if other strategic investors lend allotted shares, they shall lend them through non-agreed declaration methods, and set the number of loans in the previous five trading days.
The Exchange emphasizes that if a strategic investor lends allotted shares, it shall not collude with securities lending investors or other entities to lock in the proceeds of the placing stocks, implement profit transmission or seek other improper benefits.
The Exchange pointed out that members should follow the principles of fairness and controllable risks, establish and improve the distribution mechanism of securities sources, and prevent the transmission of benefits. Members shall verify the situation of investors in accordance with the principle of penetration, and strengthen the management of investors' securities lending. According to the type of investor and the characteristics of trading behavior, a corresponding access mechanism is established, and the senior management personnel responsible for compliance and risk control of members bear management responsibility for the implementation of the access mechanism.
"Members shall conduct front-end verification of investors' relevant trading behaviors, strictly prohibit participation in violations or facilitate violations, and shall not handle securities lending or securities lending business for investors if they are found to have their trading behaviors do not comply with relevant regulations." The exchange said.
The supervision clearly punishes violations strictly, how to guide the future policy?
In this arrangement to optimize the securities lending system, the CSRC made it clear that it will increase the supervision of all kinds of improper arbitrage, tighten the institutional fence, further strengthen supervision and law enforcement, and punish all kinds of violations together, investigate and deal with them together, and punish them severely and severely.
The CSRC also stated that it will continue to strengthen the supervision of securities lending business, timely summarize and evaluate the operation effect of the securities lending mechanism, and adjust it in a timely manner according to market conditions to better play the positive role of the securities lending mechanism.
When talking about how to follow the follow-up policy orientation, Xu Chi pointed out that the future policy orientation may focus on two aspects: First, on the market financing side, the policy level will continue to strengthen the supervision of the financing behavior of enterprises, improve the information disclosure system of related businesses of listed companies, and optimize relevant systems such as shareholding reduction and buyback at the shareholder level. Second, on the market investment side, considering that some quantitative funds help rise and fall or increase short-term market fluctuations, the subsequent standardization of quantitative funds may be further strengthened. In addition, for market funds, the policy may continue to encourage medium- and long-term funds, such as insurance funds and social security funds, to continue to increase their holdings in the A-share market to enhance market confidence.
Yang Delong also pointed out that this adjustment is in line with the four arrows issued by the CSRC before, implementing the strategic deployment of activating the capital market and boosting investor confidence proposed by the Politburo meeting of the Central Committee. In the fourth quarter, under the gradual landing of the package of policies to stabilize the economy and the strengthening of economic recovery expectations, the performance of the capital market is worth looking forward to, and this series of measures to boost investor confidence will gradually form policy synergy.
Beijing News shell financial reporter Hu Meng
Edited by Qin Che
Proofreader Fu Chunshu