ETF Purchase Reappear "Illegal Dispute" Strong Supervision And Dredging Manager "Scale Impulse"

A number of listed companies have issued ETF announcements in succession. The market is worried that there will be a risk of a disguised reduction in the company. Once again, the ETF purchase is pushed onto the cusp.

In November 13th, the Shanghai Stock Exchange and the Shenzhen Stock Exchange indicated that they would strictly supervise the stock subscription of ETF fund in strict accordance with the requirements of the SFC, and indicated that there was no violation of the ETF behavior of the relevant shareholders of the listed company at present.

In response, a number of fund industry reporters interviewed by the economic report reporters in twenty-first Century pointed out that listed shareholders were not immune to the ETF channel reduction according to the rules, and the phenomenon of large shareholders' over purchase of ETF, which had triggered the market controversy, was not illegal in fact. Since its establishment, ETF has had this exercise.

However, the respondents also revealed that, due to the excessive use of shareholders' ETF subscriptions, which also led to some damage to the interests of fund holders, the current regulatory authorities strictly regulate the ETF transfer, mainly to protect the interests of fund holders, and avoid the larger fluctuation of the fund's net value due to ETF switching, thus making the fund investors bear additional losses.

The industry believes that under strict regulation of ETF stock subscription business, large shareholders will be overbought by overstock, ETF will be curbed, at least this channel will no longer be so smooth.

Exchange strictly regulate the purchase of ETF

In November 13th, the Shanghai Stock Exchange and Shenzhen Stock Exchange issued a notice to strictly regulate the ETF stock subscription business.

The notice pointed out that, with reference to the new regulation to reduce the stock subscription behavior of the ETF fund, there is no disguised reduction or illegal reduction in the behavior of the relevant shareholders of the listed company using stock to subscribe to ETF. The operation of the replacement has little effect on the two tier market.

In view of the concerns of the market participants, shareholders of listed companies subscribe for ETF share has a hidden danger of reducing in disguise. The Shanghai and Shenzhen Stock Exchange said that in order to prevent the market participants from reducing their holdings and reducing their illegal holdings, the shareholders of listed companies should subscribe for ETF by shares and strictly enforce the regulation in accordance with the provisions of the reduction rules.

It is worth noting that there is a provision in the above announcement of Shanghai and Shenzhen Stock Exchange: "participants should undertake to not transfer the share of ETF acquired by stock subscription within a certain period."

It is noteworthy that this is a rule that has not been mentioned before. Then, how long is the time limit for the non transferable ETF? In this regard, regulators did not specify in the announcement.

"The original situation is, if the majority shareholder holds the stock to exchange the ETF proportion to account for his entire total stock capital 1%-3%, this part of six months cannot turn. If the stock of major shareholders is directly purchased from the two tier market, there is no restriction on this part of the shares, nor is the proportion higher. " A ETF fund manager told reporters.

"When a listed company buys ETF, the shareholders of the listed companies in Shanghai stock market can be sold for 90 days from the date of the establishment of the fund, and the shareholders of the Shenzhen listed companies are not locked regularly, and the ETF fund can be sold on the market." In November 14th, an industry insider said.

In addition, the Shanghai Stock Exchange and the Shenzhen Stock Exchange announcement pointed out that the shares used by the shareholders of the listed company to subscribe for the ETF share should be included in the reduction amount stipulated in the reduction rules, and the shares should be consolidated with the two class market reduction shares.

In the course of carrying out specific businesses, the exchange takes measures such as fund managers, shareholders' prior commitments, ex post examination, ex post examination and supervision afterwards to ensure that the number of shares subscribed for ETF does not exceed the reduction amount stipulated in the reduction rules.

In fact, there is no objection to the strict regulation of ETF stock subscription business.

"For the industry, strictly regulating the ETF stock subscription business is a good thing in the long run, and there is nothing wrong with unified and clear rules." One ETF fund manager said.

"Listed shareholders in accordance with the rules to borrow ETF channel reduction is understandable, as long as it is in line with the relevant provisions of the current is appropriate." A private company official said: "if securities and public fund business personnel are guided by KPI (key performance indicators), they may overuse ETF reduction, so they need effective and effective supervision. Shanghai and Shenzhen stock exchanges should strengthen supervision and make up for losses if necessary."

Oversubscription violation?

Xia Fengguang, a fund manager of private placement fund, believes that ETF reduction should be applied to the reduction rules, and can not become a channel for reducing and reducing violations in a disguised way. It is the core meaning of the Shanghai and Shenzhen Stock Exchange announcements. This is a constraint on the phenomenon of over subscription in the previous period. The regulation of the purchase behavior can dispel the concerns of the market and block the behavior of reducing the amount of intention in order to guarantee the continuous and orderly operation of the business.

Recently, the focus of the listed company's shareholders to buy ETF is to oversubscribe. Has it been stopped?

The Shanghai and Shenzhen Stock Exchange pointed out that there is no violation of the stock market subscription of ETF by the relevant shareholders of the listed companies, and the impact of the purchase and purchase on the market is relatively small.

For the specific oversubscribed ETF problem, the announcement did not explicitly mention.

However, in recent days, it was reported that regulators had conducted window guidance on the large scale reduction of ETF holdings of listed companies, which required that the proportion of shareholders' purchase should not exceed the weight of the listed company's tracking index in the ETF.

"According to the existing laws and regulations, the oversubscription of ETF shares is not illegal and illegal. ETF oversubscribed from 2004 China's first ETF - Shanghai 50ETF has more than ten years, is nothing new." In response, in November 14th, a large fund company ETF fund manager told reporters.

The ETF fund manager of another large fund company also pointed out that, for the recent news, "the proportion of the shareholders' replacement can not exceed the weight of the listed company's tracking index in the establishment of ETF". "This is not limited to the original, and now there is no limit to it. I have not got the explicit information of supervision. No text notice has been given that the transfer of large shareholders can not exceed the weight of the tracking index of the ETF", "ETF said.

It is not uncommon for large shareholders to oversubscribe ETF. According to public information, according to incomplete statistics, the number of listed companies that have taken large shareholder to purchase ETF plan has reached nearly 50 this year, and the corresponding amount of purchase is more than 20 billion yuan.

The reason why the oversubscribed ETF of large shareholders has attracted much attention is due to the recent establishment of less than half a month of ETF products. A certain stock company of Shanghai and Shenzhen has bought a large number of shares of a listed company through the stock exchange, which accounts for 5% of the net asset value of the fund and is far more than 0.5% of the natural right. Since the stock market has continued to decline, the net value of a Shanghai and Shenzhen 300ETF has been significantly deviated from the stock index after the huge purchase, which has made the ETF investors suffer unnecessary losses.

"At present, regulators are strictly monitoring the ETF transfer, mainly to protect the interests of fund holders and avoid larger fluctuations in the fund's net value due to ETF switching, thus making the fund investors bear additional losses." Zhang Ting, a fortune researcher, said.

Recently, when the window of "buy ETF" came out, many listed companies soon announced that major shareholders and executives gave up the subscription of ETF.

For example, in the evening of November 4th, four NavInfo and November 8th network technology released the announcement that shareholders should give up holding shares of the company to participate in the subscription of ETF fund shares and to reduce shares.

Aftermarket impact tracking

So what is the impact of regulators strictly regulating the ETF stock subscription business?

"After strict supervision, excessive replacement of ETF has compliance risks and should be curbed." A fund industry source said.

Recently, when a large shareholder overbought ETF resulted in poor fund performance, a ETF fund manager said, "in fact, what type of stock is suitable for ETF? Generally speaking, stocks with special circumstances and poor fundamentals are not very suitable for replacement. Every fund company will have its own investment judgment and some risk indicators will be eliminated."

"After the regulatory authorities strictly regulate the ETF subscription, the large shareholder over the ETF channel is not as smooth as it used to be." The ETF fund manager said.

"After strict supervision, the phenomenon of over repurchase of listed companies has been effectively curbed, ensuring the smooth operation of the ETF fund, and the interests of other holders will be better protected." Xia Fengguang said.

For shareholders of listed companies, a private company official pointed out that "buying and selling is in line with the latest compliance requirements, and lowering tax burden requires that a portion of ETF purchase be more cost-effective."

Zhang Ting suggested that the ETF purchase is mainly the participation of shareholders of listed companies. For shareholders, it is possible to choose ETF of large fund companies to subscribe, which can meet their reduction requirements more likely, and not because the scale is too small, so that the initial proposal will not be realized.

In this regard, Xia view that the ETF replacement for listed companies, eliminating the discount of bulk transactions, so that liquidity greatly improved, as long as it meets regulatory requirements, through ETF purchase is a good thing. The ETF fund can also expand the scale and reduce the allocation cost by absorbing and exchanging stocks.

It is pointed out that "all parties should pay attention to the need to strictly abide by the provisions of the purchase business, reduce the new rules, and so on, and make reasonable purchases and long-term holdings so as to achieve a win-win or even win-win goal."