Shanghai And Shenzhen Stock Exchange Will Promote New Front-End Risk Control Of Securities Trading Funds

Shanghai and Shenzhen Stock Exchange and China balance sheet announced that it will introduce

The front-end risk control system of funds should strengthen the daily paction management of securities institutions, fund companies, insurance companies, etc.

At present, China's settlement has already drawn up relevant rules and rules on the basis of research and demonstration with the Shanghai and Shenzhen Stock Exchange, and formed a "capital rule and two rules" fund front-end control system, and has begun to seek advice from relevant institutions.

The Shanghai Stock Exchange said that the purpose of drawing up relevant rules is to prevent paction risks and settlement risks caused by technical failures and operational errors of trading participants, maintain paction settlement order, and ensure the safe and stable operation of the securities market.

Specifically, the front-end control of funds is mainly to prevent the risk of extreme, abnormal and similar pactions involving the whole market.

Securities Dealers believe that the establishment of the front-end control system of funds aims at preventing the risk of market abnormal fluctuations caused by the huge abnormal buying of trading participants and the risk of capital pfer caused by the failure of capital controls of trading participants.

Only by using or "borrowing" the funds of brokers' channels or fund passages will be affected by the new policy of "front-end control of funds".

The use of brokerage business channel of the brokerage business department will not be affected at all.

In August 16, 2013, when China Everbright Securities made a ETF redemption arbitrage paction, due to its procedural errors, its strategic trading system used 23 billion 400 million yuan to purchase the Shanghai 180ETF stock market with a huge volume. The actual turnover reached 7 billion 270 million yuan, causing the Shanghai and Shenzhen 300, Shanghai Composite Index and other large index and multiple weighted stocks to fluctuate for a short time, resulting in significant paction anomalies.

To prevent similar risks, according to the CSRC deployment, China settlement and Shanghai and Shenzhen exchanges have studied and drafted relevant rules and rules, forming a "front rule" and "two rules".

System.

A rule, that is, "

The stock exchange, the Shenzhen stock exchange, and the China Securities Depository and Clearing Co., Ltd., the securities trading fund front-end risk control business rules (Draft), aim to clarify and unify the basic principles and requirements of the front end control of Shanghai and Shenzhen stock markets, which are jointly issued by the two departments.

The two detailed rules, as the subordinate system of the rules, are jointly issued by the Shanghai and Shenzhen stock exchanges with China's settlement. The purpose is to make detailed rules for the rules so as to facilitate the understanding and implementation of market participants.

According to the rules, the front-end control of funds refers to the total amount control of the Shanghai and Shenzhen Stock Exchange and China settlement for the amount of the purchase declaration amount of the relevant paction unit of the trading participant.

The front-end control of funds is divided into the whole day net purchase fund front end control and the time-sharing pure buying fund front-end control.

The former refers to the implementation of the management of the whole day net purchase amount declared by the Chinese settlement unit to the participants involved in the settlement, and the front-end control of the trading participants according to the China settlement agreement.

The latter refers to the total amount control of the pure purchase declaration amount in the single reporting period of the trading participant's single paction unit.

The front-end control of time sharing pure buying funds is implemented by the exchange according to its own market conditions.

Trading participants should declare the maximum amount of net purchase funds front end control information.

When the buying amount of the relevant paction unit of the trading participant reaches or exceeds the quota set by the front end of the net purchase fund, the exchange will impose restrictions on its purchase declaration, but still accept the cancellation and sale declaration.

According to the rules, the types and methods of trading front-end control are implemented, including A shares, preferred shares, funds, bonds, warrants, bonds pledged repo pactions, and other pactions and pactions identified by exchanges and China's settlement.

The Shanghai Stock Exchange said that in order to implement the fund's front-end control system in a prudent manner, and avoid the restriction of individual investors' excess order trigger and affect the normal paction of other investors, the front-end control of funds will first cover the paction units which are not included in the three party's custody, including the self employment of securities dealers, and the trading units of institutions or products that adopt trustee settlement models such as funds.

After accumulating experience, we will further study whether it will extend to the trading units of securities companies, such as securities companies, which have been put into the custody of three party funds.

It should be noted that there are obvious differences in institutional arrangement between Shanghai and Shenzhen Stock Exchange when implementing capital front control.

First, the control range of funds is different.

Two, there are different objects of net buying control throughout the day.

Three, the whole day net purchase control quota adjustment time effect is different.

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