Shanghai Stock Exchange Holds Symposium On Institutional-Investors-Oriented Innovative Services

On the afternoon of August 27, the Shanghai Stock Exchange (SSE) held the "Symposium on Institutional-investors-oriented Innovative Services", in a bid to introduce the SSE's thoughts of conducting institutional-investors-oriented innovative services to institutional investors and solicit opinions from them.

SSE President Zhang Yujun delivered a speech at the symposium, which was presided over by SSE Vice President Huang Hongyuan. Also attending the symposium were SSE Vice President Xie Wei, and representatives from 18 institutional investors including securities companies, fund companies, insurance companies, trust companies, finance companies, QFIIs, private funds, and law firms. The representatives made speeches at the symposium as well.

It was pointed out at the symposium that the development of institutional investors is a key mission and a strategic task for the reform and growth of the Chinese capital market. Upon 20 years of efforts, China's institutional investors have made outstanding achievements in absolute quantity, institution type, business size, competitiveness, and standardized operation. However, generally, in addition to imperfect systems and weak institutions, the institutions which had entered the exchange's core markets were insufficient. Institutional investors would face valuable opportunities as the conditions for rigorously developing professional investment institutions for the capital market had matured gradually.

The development of institutional investors is a mission of the capital market.

The SSE will continuously expand the service coverage, enhance the serving ability, and rationalized the services by taking the development of professional investment institutions and wealth management institutions as one of its key targets. Besides, it will issue new rules and establish new systems concerning institutional-investors-oriented innovative services in the near future, apart from providing pertinent innovative services for different institutional investors.

The institutional investors present at the symposium said that the industry was considerably inspired by the symposium. The new rules and systems to be issued by the SSE would show the guidance of optimizing external environment, meeting institutions' needs, encouraging innovation and creation, and keeping the flexibility of systems and arrangements. Institutional investors would have new strategic opportunities.

In light of the characteristics and needs of their operation, the institutions present at the symposium put forward constructive advices and suggestions on market entry, innovation of business modes, enrichment of risk management instruments, development of new products for the exchange-based markets, reform of trading systems, and perfection of regulatory rules to the SSE. Qiu Guogen, Board Chairman of Chongyang Investment suggested that efforts should be made to solve the impeded issuance channels of sunshine private funds as they were only issued by way of trust. Moreover, more endeavors should be made to loosen the proportion limit for institutional investors' hedging through stock index futures and other instruments. Lu Xiaoliang, General Manager of Product Innovation and R&D of Huabao Trust, put forward that pains should be taken to reform the recognition standard for the proportion of a trust product' holding of individual stocks according to the substantial essentials for trust-related asset management products, for the purpose of avoiding the drop of the asset management efficiency of trust products due to triggering an obligation of disclosing more than 5% shareholding proportion in form. Wu Haifeng, Chief Representative of Shanghai Representative Office of Nomura Asset Management, advised that the single-institution-oriented QFII quota should be dramatically increased, with an aim of encouraging international asset management institutions to invest more operational resources for meeting their clients' active demands for China's A-share asset. Ma Jun, Chief Investment Officer of Fixed Income of E Fund Management, put forward that certain trading leverage should be granted to institutional investors in the wholesale market, so as to boost the market liquidity. Finally, Chen Jiwu, General Manager of V.stone Investment Management, said that private funds should be allowed to open accounts as soon as possible and sell their products on the exchange's platforms.

"The exchange promises that it will take positive attitudes towards institutional investors' initiatives, offer them services to satisfy their demands, and strengthen the coordination in their research", said an SSE official at the symposium. According to the official, in the process of their great development, institutional investors should set examples for others in terms of rational and professional investment and differentiate themselves from retail investors. They need to have their independent thinking and judgment as well as hold correct attitudes towards the economic growth and the market development, especially under the irrational circumstances of the market, rather than have herd-like behaviors in the capital market. Besides, institutional investors should not only become models for innovation and risk control, but also improve the transparency of their financial reports and rationalize their operation as the motive power and main force of market innovations. In the current market, institutional investors should earnestly study the market, and actively participate in the market construction from the perspective of clients' long-term interests. The market downturn gives institutional investors the time for developing themselves, so they should cultivate the thought of value investing and contrarian investment, face up to current difficulties, and make more efforts on constructive work.