Financial Products To Channel Storm: Direct Investment Opinion Was Read By Crazy A Shares.

A number of banks are issued "supervision and management measures of commercial banks' financial services" (Draft for Soliciting Comments).

Right now.

At the craziest moment, the draft was also misread by the market. Regulators encouraged banks to invest directly in the stock market.

Subsequently, the CBRC had to urgently refute the rumor.

Yang Dongning, deputy director of the office of the CBRC, called this a misreading and said that direct investment is not direct financing and has nothing to do with stock market.

In December 6th, according to the sixty-sixth draft of the press release, the investment of financial capital should not be invested in publicly traded stocks in the two tier market or other related securities investment funds.

However, "there are no restrictions on products with high asset value, private banking and institutional customers with strong investment risk and strong risk tolerance."

Yang Dongning said that financial products encourage direct investment in order to go to the channel, directly serve the financing needs of enterprises, and better serve the real economy directly.

She also said that the draft was only for comments from the industry, followed by public consultation and interpretation.

The document shows that the CBRC sent the letter to 24 banks including CDB, five major state-owned banks, China Merchants Bank, Citibank and so on, and each bank needs to give feedback to the CBRC on the afternoon of December 8th.

Before it allowed direct investment in financial products, it now allows game rules to turn 180 degrees.

A joint-stock bank head office told reporters, "for banks, the past way to be revised, business processes need to be reorganized.

But in the long run, it is a good thing for banks. After a short and complicated business process, banks can no longer trust channels, so they can directly butt up corporate financing projects.

"The stock market is going to go crazy". In December 4th, after the CBRC issued some soliciting comments to some banks, the market was extremely restless.

According to Haitong Securities (600837) estimates, the total size of residents' savings is about 50 trillion yuan. Assuming that about half of them are replaced by financial products, the scale of new financing will be more than 20 trillion yuan in the next few years.

According to the ratio of 35% allocation of non standard, 60% allocation of bonds and 5% of stock allocation, 20 trillion yuan of new financing will bring 12 trillion yuan new bond investment demand and 1 trillion yuan new stock investment demand.

But after careful study of the documents, it can be found that according to the sixty-sixth provision of the above draft, the CBRC has clearly stipulated that financial management funds can not be invested in the stock market.

This is in line with the notice issued by the CBRC in 2009 on further regulating the investment management of commercial banks' personal financial services.

The above eighteenth, nineteenth notices are basically consistent with the draft. Twentieth, the notice twentieth puts forward that "commercial banks can meet their investment needs through private banking services, which are not subject to the eighteenth and nineteenth restrictions of this notice".

In fact, bank financing products can open securities accounts directly in Shanghai and Shenzhen markets, as early as last year.

In December 2013, the China securities registration Clearing Corp issued the notice on matters related to the opening of securities accounts of commercial banks' financial products, and put forward that "every commercial bank's financial products can open a securities account in Shanghai and Shenzhen markets."

Securities accounts are only used to invest in fixed income products such as standardized bonds, credit asset backed securities, preferred shares, etc.

Therefore, the "market entry of financial products" can be described as a misreading of the crazy market to the relevant policies.

De channelization against "layer by layer nesting"

So what is the meaning of regulators' direct investment in financial products?

The head office of the joint-stock bank told reporters that direct investment means that bank financing funds can no longer rely on channels such as trusts, brokerages, fund subsidiaries, etc., but can directly butt joint enterprise financing projects.

The CBRC said that in order to implement the policy spirit of the State Council to take measures to alleviate the high cost of corporate financing and guide financial capital to connect the real economy, the investment and utilization of financial capital should be based on the form of direct investment.

It aims to encourage banks to set up project financing products with no maturity mismatch.

Allow eligible banks to set up financial management plans and direct financing tools to achieve direct docking between financial capital and real financing projects of enterprises, help enterprises to reduce financing costs and better serve the real economy.

In order to achieve direct docking between financial capital and the real economy, the CBRC clarified the legal effect of the independence of financial products and the bankruptcy isolation with reference to the regulation of securities management, fund and insurance management.

It also allows independent accounts of capital accounts and securities accounts and other related accounts in the name of financial products, and encourages financial products to carry out direct investment.

As early as last year, the CBRC had asked banks to manage, establish accounts and accounting separately for each financial product, on the one hand, in order to defuse risks; on the other hand, it could achieve independent capital management when connecting bank financing direct investment to entity projects.

"If you can invest directly, who would like to take the opportunity to make a difference?"

He believes that "the advantage of banks lies in project investment. Banks are really familiar with whether it is risky to examine a credit asset.

After encouraging direct investment in financial management, both banks and financiers have made a choice.

The bank can provide two options to the financing side, one is to provide loans, the other is to provide financial capital, and the financing side can choose the way of financing the lowest cost.

"If we invest directly through financial capital, banks need to do due diligence to disclose information to customers. Customers feel that they can accept it.

The advantage of this is that financial products need not be nested in layers.

It can be said that bank financing products to channel, in fact, is to encourage direct financing.

However, GF Securities (000776) believes that it is necessary to encourage financial products to carry out direct investment, and "go to the channel" to reduce intermediate fees, thereby reducing the financing cost of enterprises.