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On August 10, 2023, under the guidance of the China Securities Regulatory Commission (CSRC), the Shanghai Stock Exchange (SSE) revised and released Guidelines No.1 of the Shanghai Stock Exchange for Application of Fund Self-Regulation Rules — Index Fund Development (hereinafter referred to as the Guidelines for Index Fund Development), which came into effect immediately upon publication. This revision represents an important measure taken by the SSE to implement the decisions and arrangements of the CPC Central Committee, the State Council, and the CSRC regarding the development of an active capital market. The aim is to improve the responsiveness of indices and index products to investor demands and national strategies, enrich the supply of high-quality products, stimulate the vitality of the capital market, and continuously enhance support for the real economy.
In order to standardize the development of index fund products and promote the sustainable and healthy development of index funds, the SSE solicited and incorporated opinions from various parties and released the Guidelines for Index Fund Development to the market in January 2021. In May 2022, it was revised to further align the fund market with national strategies. Since its implementation, the Guidelines for Index Fund Development have exhibited a positive effect and effectively promoted the development of the ETF market. As of August 9, 2023, the total scale of ETFs on the SSE reached RMB 1.49 trillion yuan, with a continuously improved product layout and the emergence of numerous flagship products. The combined scale of the STAR 50 ETF series exceeded RMB 100 billion yuan by the end of May this year, and the single-product scale of the CSI 300 ETF surpassed RMB 100 billion yuan on August 7, 2023, playing a crucial role in residents' wealth management and supporting the real economy.
Based on the existing rules, the revision shortens the index publication time required for the development of non-broad-based stock index products from 6 months to 3 months. On the one hand, it can promote fund products to better serve national strategies and support major decisions and arrangements such as sci-tech self-reliance and self-strengthening and the revaluation of central SOEs, further leveraging the positive role of the fund market in supporting the development of the real economy. On the other hand, an increasingly improved product layout can enhance the convenience and enthusiasm of investor participation, improving the attractiveness of the capital market by constructing an active and orderly market environment. To date, two products that meet the new requirements have been submitted to the CSRC.
Moving forward, under the guidance of the CSRC, the SSE will take multiple measures to enhance the wealth management function of the fund market, continuously improve investors' sense of gain, and further promote reforms on the investment side. It will strive to achieve "overall improvement and structural optimization" of the fund market and steadily build a high-quality capital market.
