SFC Started The Stock Market Plus "Starting Gun"? The Proportion Of Medium And Long Capital Needs To Be Relaxed.

The theme of the recent news of the SFC is "Symposium". After announcing the 12 contents of comprehensively deepening the reform of the capital market, the chairman of the SFC will easily start direct communication with the participants in the capital market. In October 17th and 21st, the chairman of the SFC held a symposium on private equity and venture capital, and a comprehensive Symposium on deepening the reform of the social security fund and insurance institutions in the capital market.

Compared with the Forum on private placement and venture capital, the market obviously pays more attention to the communication between the SFC and social security funds and insurance institutions, and the SFC has not disappointed the market. The SFC has released a very clear signal to the market through this symposium, that is, we must vigorously promote the medium and long-term funds represented by social security funds and insurance funds to enter the market.

However, judging from the feedback from the market, the market is pressing that the SFC can actually take measures to promote the entry of medium and long term funds into the market. The first thing to do is to increase the proportion of all kinds of medium and long term funds entering the market and break through this rigid threshold.

Combined boxing to attract medium and long term funds

There is no doubt that the promotion of more medium and long-term capital market is also an important part of the 12 key tasks of the SFC comprehensively deepening the reform of the capital market.

The specific expression is: to promote more medium and long-term funds into the market. We will strengthen the long-term performance orientation of securities fund management institutions and promote classified supervision of public fund managers. We will promote the liberalization of the proportion and scope of all types of medium - and long-term funds entering the market. We will promote public funds to be included in the investment scope of individual tax deferred commercial pensions.

"The medium and long-term fund is a problem that all the leaders of CSRC attach great importance to, but in recent years, this problem has not been solved well, which is basically a stagnant stage." People in charge of a large brokerage firm in Beijing pointed out.

In this symposium, the SFC also emphasized once again the necessity and importance of introducing medium and long term funds. The SFC believes that guiding more medium and long-term funds into the market is an important part of promoting the sustained, stable and healthy development of the capital market, and is also an important task of comprehensively deepening the reform of the capital market.

Reporters learned that this time to take the opportunity of comprehensive reform, the SFC wants to play a combined punching from three aspects to promote the medium and long term capital market. The core words in three aspects are "transforming stock", "introducing increments" and "optimizing the environment".

First of all, the transformation of stock and the transformation of stock requires institutions to start from the end of products, and promote the transformation of short-term trading funds to long-term allocation power, and enhance the attractiveness and weight of equity products.

"Recently, the SFC has encouraged public funds to attach importance to window guidance and stock conversion of equity products. The SFC now attaches great importance to the development of equity products. The core is the trading habits and product types of trading funds inside the trading floor to be changed. When external capital is not so fast, stock funds must be transformed." A large public fund manager in Beijing told reporters.

Reporters learned that, at the forum, the SFC also pointed out that we should further increase the proportion of equity asset investment and expand the strength of professional institutional investors. At the same time, we hope that the organization can adhere to the long term performance guidance, perfect the internal incentive and restraint mechanism, optimize the performance appraisal and evaluation system for external managers and financial products, and strive to improve the long-term income level.

Second is to enhance transaction convenience and efficiency, reduce transaction costs and other measures. In short, it is to create more basic institutional environment for more medium and long-term capital market entry.

The last and the most important one is to ease policy barriers, promote the relaxation of the proportion and scope of medium and long term capital market, and study and improve relevant policies to guide long-term investment in capital, and attract all kinds of medium and long-term funds to actively invest in capital markets.

"At present, there is still a big gap between the proportion of all kinds of medium and long-term funds and the mature market, and the absence of medium and long-term funds directly leads to the poor anti volatility ability of the capital market in the past few years. From a global perspective, the development of institutional investors in a country usually directly affects the maturity of the capital market, and the growth of institutional investors cannot be separated from a stable holder structure and a stable long-term capital source. When "short money" becomes the main source of funds, frequent redemption will lead to frequent fluctuations of fund flow. " Ze Hao investment partner Cao Gang said.

Expanding the proportion of various funds to enter the market

In fact, compared with stock conversion, the market also pays more attention to the incremental capital market. From the example of the social security fund, it is imperative for the SFC to guide the medium and long term capital market to break the policy restrictions and expand the proportion of all kinds of capital entering the market.

Qiu Xiang, a strategist at CITIC Securities, said: 'we expect that unlike the US, the "long money" that China's pension system has brought to the equity market for a long time is mainly from the public pension system. It is estimated that the number of basic pensions entrusted to social security management and operation in the first pillar will contribute about 150 billion; the national social security fund can increase the annual stock investment to about 20 billion yuan; the enterprise / occupational annuity can bring about 125~170 billion yuan /135~270 billion yuan; and the third pillar pilot will be able to bring 24 billion yuan increments in the next 5 years after the formal implementation of the pilot scheme.

Qiu Xiang pointed out immediately: "although the scale of the three pillars is very large, the incremental capital available to domestic stocks is relatively limited."

To a great extent, the limited incremental capital is related to the limit of the proportion of entering the market. The Interim Measures for investment management of the National Social Security Fund (hereinafter referred to as "Interim Measures") stipulate that the proportion of investment in social security funds: the proportion of bank deposits and treasury bonds investment shall not be less than 50%, of which the proportion of bank deposits should not be less than 10%; the ratio of investment in corporate bonds and financial bonds should not exceed 10%; the proportion of investment in securities investment funds and stocks shall not exceed 40%.

However, the interim measures have been announced in 2001, that is, the rule has not been adjusted in the past 20 years. In the past 20 years, the capital market has undergone tremendous changes, and the investment environment and supporting policies have been improved a lot.

During the two sessions this year, Jiang Yang, former chairman of the CPPCC National Committee and former vice chairman of the securities and Futures Commission, also called for the long-term stability of the stock market to introduce long-term funds and encourage long-term capital to enter the capital market. It is suggested that more investment flexibility be provided to the social security fund, and the current equity asset investment ceiling will be increased from 40% to 60%, allowing it to invest in risk management tools such as stock index futures and options.

It can be seen that the amount of medium and long-term funds that can enter the market under the public pension system is not large. Therefore, it is urgent to solve the policy barriers and enhance the original proportion.

In addition, according to the disclosure of the 2019 quarterly report (currently the third quarterly report is still in the process of disclosure), there are 49 investment funds in the social security fund. The total market value of A shares is 152 billion 800 million. Compared with the 157 billion 500 million quarter of the first quarter, the market value of the social security fund dropped by about 3%, but the Shanghai Composite Index fell 3.62% during the same period, so the social security fund held a stable position in the second quarter of 2019. But the scale of the social security fund's 152 billion 800 million market capitalization is still very small compared with the actual volume of the A share market.

"It does not mean that the current social security fund is already full. 40% of the position limit means that the fund manager will take account of this proportion in the operation. If the position limit is raised to 60%, then the overall scale of the social security fund can exceed 40%, and the breakthrough of the hard proportion is very important." The aforementioned public fund manager said.