On January 8, SZSE held the Symposium on ETF Market Development in 2020, focusing on the full implementation of the guiding principles of the Central Economic Work Conference and the overall plans on sweeping reforms of the capital market by CSRC. At the Symposium, SZSE reviewed and summarized the development of the SZSE ETF market in 2019 and planned for advancing key tasks for 2020 to further promote the sound development of the ETF market and better serve the high-quality development of the economy. The Symposium was attended by representatives from institutions like CSDC, fund companies, securities institutions and commercial banks.

SZSE briefed on the development and building of the SZSE ETF market in 2019. In 2019, SZSE implemented fully the guiding principles of the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. It maintained the basic tune of “seeking progress while maintaining stability” for its work according to the retirements of “the four awes (stand in awe of the market, rule of law, professionalism and risks) and one joint force (The capital market’s development needs all the efforts made by all sides)”. SZSE boosted positive results for the SZSE ETF market on areas like enriching product categories, optimizing institutional mechanisms, deepening market reform, serving the building of the Guangdong-Hong Kong-Macao Greater Bay Area and the Pilot Demonstration Area of Socialism with Chinese Characteristics as well as the real economy. First, SZSE continued to push forward the product innovation. SZSE successfully launched new products such as the first batch of domestic commodity futures ETFs, Guangdong-Hong Kong-Macao Greater Bay Area Innovation 100 ETF and municipal bond ETFs. This has further improved the ETF market’s ability to serve the real economy and regional development. As at the end of 2019, the total scale of SZSE ETF assets reached CNY115.7 billion, an increase of 58% over the end of last year and the annual turnover amounted to CNY1.9 trillion. Second, SZSE improved market mechanism. SZSE optimized the ETF settlement model and the cross-market ETF stock creation and redemption model and effectively improved the efficiency of investors’ funds and shares, resulting in a rise of 74% of ETF liquidity across SZSE. The ETF initial listing fees and monthly fees were temporarily waived to ease the burden on product development cost of fund companies and the capital cost of liquidity service providers. Third, SZSE smoothly launched its first derivative, CSI 300 ETF Option, to provide investors with more risk management tools, further making ETF market bigger and stronger and attracting more long-term capital in it. Fourth, SZSE strengthened market cultivation and investor education. In 2019, SZSE organized 37 “ETF lecture” training activities in the major cities of the country and shared the investment philosophy of value investment and long-term investment with nearly 10,000 investors.

At the Symposium, SZSE had in-depth exchanges around the topics such as optimization of ETF operation mechanism, innovative product development and introduction of long-term funds. For ETF operation mechanism improvement, we exchanged views on improving systems like ETF market making, creation and redemption, and trading and settlement to reduce the operating cost and operational risk of the market players and enhance the liquidity of the ETF market. To enrich ETF market innovative products, we supplied more innovative products to meet diversified needs of investment and financing. We also explored issues on building the ETF product development ecosystem through rich risk management tools that attract institutions like insurance companies and wealth subsidiaries of banks into ETF investment. SZSE will fully accept all comments and suggestions, further play the function of ETF products, and ensure the stable operation of the SZSE ETF market.

SZSE emphasized at the Symposium that SZSE will, in accordance with the unified arrangements of the CSRC, advance and deepen the sweeping reform of the capital market and promote product innovation. We will also improve the basic policies, optimize the market mechanism, and improve the vitality and resilience of the market. We will further continue to improve the ability of the capital market to serve the real economy. First, SZSE will continue to improve the product system. We will strive to develop ETF core products and expand the size of industry-themed ETF products. What’s more, we will promote the research and development of innovative products such as active management ETFs, crude oil ETFs, and cross-bank market bond ETFs. Second, SZSE will further lay a sound foundation on basic policy development and provide more policies for the market needs. We will study and launch the ETF collective subscription mechanism, foster interconnection with overseas markets and strengthen the supervision of the standardized operation of ETFs to ensure the stable development of the ETF market. Third, SZSE will carry out in-depth marketing and investment education services. Building consensus on development and giving full play to the joint force of all market players, we will endeavor to build an industry culture of “compliance, integrity, professionalism and soundness” and make every effort to build a capital market product system compatible with the Pilot Demonstration Area of Socialism with Chinese Characteristics.