China Securities Regulatory Commission’s “Three Arrows”: IPO tightening, standard reduction of holdings, and reduction of financing margin ratio
The stamp duty on securities transactions will be halved from today
The active capital market ushered in another major move.
On August 27, according to the website of the Ministry of Finance, in order to activate the capital market and boost investor confidence, starting from August 28, 2023, the stamp duty on securities transactions will be halved.
A reporter from the Beijing News sorted out and found that since the introduction of stamp duty in July 1990, the tax rate of stamp duty on securities transactions in my country has undergone many adjustments, including 7 reductions in the comprehensive tax rate (total of buyers and sellers). Almost every reduction has brought a certain boost to the capital market.
A number of industry insiders pointed out that the reduction in stamp duty has really benefited investors. According to the statistics of the Beijing News reporter, if we look at the income from stamp duty on securities transactions in 2022, the halving of stamp duty this time may benefit investors by more than 100 billion yuan for the whole year.
Interpretation 1
Stamp duty on securities transactions has been adjusted several times
Zhao Xijun, co-director of the China Capital Market Research Institute of Renmin University of China, said in an interview with a reporter from the Beijing News that the reduction in stamp duty on securities transactions was very timely and expected. After the meeting of the Political Bureau of the Central Committee mentioned the requirement of “activating the capital market and enhancing investor confidence”, relevant departments have introduced a series of policy measures, and the reduction of stamp duty is the most direct and heavy impact on the market. a policy.
Specifically, stamp duty was levied in Shenzhen in 1990. At that time, traders who sold stocks paid 6‰ of the transaction amount. In November of the same year, the Shenzhen market also levied a stamp duty of 6‰ for buyers. A reporter from the Beijing News sorted out and found that since the introduction of stamp duty in July 1990, the tax rate of stamp duty on securities transactions in my country has undergone many adjustments, including 7 reductions in the comprehensive tax rate (total of buyers and sellers). Looking back at history, the short-term impact of stamp duty adjustments on the broader market is still obvious. Almost every increase or decrease is accompanied by a sharp decline and rise in the market.
However, some people in the industry pointed out that although the reduction of stamp duty rate in history has boosted short-term market activity, in the long run, the single factor of stamp duty reduction has little impact on the long-term trend of the market, especially the two stamp duty reductions in 2008. The downward adjustment will not change the long-term trend of the overall downward trend of the index.
Interpretation 2
Annual real gold and silver transfers to investors exceeded 100 billion yuan
On August 18, the relevant person in charge of the China Securities Regulatory Commission pointed out in an answer to reporters’ questions that the capital market will be activated from five major directions to boost investor confidence. At the same time, it also clearly stated that IPOs and refinancing should be kept on a normal basis, and the secondary market’s bearing capacity should be fully considered. , reduce the relevant investment-side fee rates, pay close attention to calls for stamp duty reduction, etc. On the same day, the Shanghai and Shenzhen Stock Exchanges reduced transaction handling fees by 30%, and the Beijing Stock Exchange by 50%.
In less than two weeks, A-shares have once again ushered in good news, and the stamp duty on securities transactions has been halved. How to understand the reduction of stamp duty on securities transactions at the current point of time?
Tian Lihui, dean of Nankai University’s Financial Development Research Institute and a professor of finance, said in an interview with a reporter from the Beijing News that the promulgation of the stamp duty reduction policy at this point in time demonstrates the government’s care for the capital market, which can improve expectations and be effective. Reduce transaction costs, activate the capital market, and boost confidence.
When talking about the impact, Zhao Xijun pointed out that from the perspective of historical experience, in fact, there will be a strong rebound in the adjustment of the stamp duty market. At the same time, the reduction of stamp duty will also greatly promote the market turnover.
It is worth noting that the reduction in stamp duty will benefit investors in a “real money” manner. According to data released by the Treasury Department of the Ministry of Finance, in 2022, my country’s securities transaction stamp duty will be 275.9 billion yuan. If calculated at this level, the halving of the stamp duty this time may benefit investors by more than 100 billion yuan for the whole year.
In this regard, Zhao Xijun said that although more than 100 billion yuan of tax revenue in the national fiscal revenue accounted for a small proportion, and in most years from 2002 to the present, the stamp duty on securities transactions only accounted for about 1% of tax revenue, but this is true. As long as this policy is maintained, investors can obtain corresponding profit concessions every year, which reflects the country’s support for activating the capital market and enhancing investor confidence.
Interpretation 3
“Combined boxing” is expected to bring a rebound to the market
It is worth noting that on August 27, the China Securities Regulatory Commission launched a heavy policy of “three arrows together”. The minimum margin margin ratio for securities purchases has been reduced from 100% to 80%. Second, the China Securities Regulatory Commission further regulates the reduction of shareholdings; third, the China Securities Regulatory Commission coordinates the balance of the primary and secondary markets and optimizes the regulatory arrangements for IPOs and refinancing. A dynamic balance between investment and financing.
Xu Chi, head of strategic research at Zhongtai Securities, told the Beijing News reporter that a series of policies such as halving the stamp duty, tightening the pace of IPOs, standardizing the reduction of listed companies, and reducing the minimum ratio of financing margins are all in place. Market, boost investor confidence” at the policy level substantive implementation. Taking history as a mirror, after each stamp duty reduction, investor confidence will be restored to a certain extent, and the market is more likely to rise. Therefore, this “combination punch” is expected to bring a round of rebound to the market.
“From a mid- to long-term perspective, in terms of the direction of the rebound, since the financial and real estate stimulus policies expected by the market are more difficult to emerge, more policies are introduced that favor capital market reform. Therefore, in terms of style, low-level domestic substitution is related Technology stocks may be more dominant. At the same time, in terms of the overall allocation thinking in the third quarter, the thinking of “focusing on defense and taking into account themes” remains unchanged.” Xu Chi said.
Tian Lihui also believes that the stock market is expected to rebound on August 28, but the reversal still needs the consensus of investors or the improvement of corporate profit expectations. He emphasized that in terms of policy, more powerful multi-party measures are needed to promote market development.
Tang Jiqiang, chief economist of Xicai Think Tank of Southwestern University of Finance and Economics, also told the Beijing News that the capital market should be activated to boost investor confidence. It has promoted economic recovery and halved the collection of stamp duty on securities transactions, giving confidence to the entire market and encouraging everyone to participate and share capital market dividends.
■ Policy Summary
The China Securities Regulatory Commission coordinates the primary and secondary market balance and optimizes IPO and refinancing regulatory arrangements
●According to the recent market situation, gradually tighten the pace of IPO to promote the dynamic balance between investment and financing.
●For large-amount refinancing of listed companies in the financial industry or listed companies with large market capitalization in other industries, implement a pre-communication mechanism, paying attention to the necessity of financing and the timing of issuance.
●Prominently support the good and limit the bad, and appropriately limit the financing interval and financing scale for listed companies with bankruptcy, net bankruptcy, continuous loss of operating performance, and high proportion of financial investment for refinancing.
● Guide listed companies to reasonably determine the scale of refinancing, and strictly implement the requirements for financing intervals. During the review, we will focus on whether the funds raised in the previous round have been basically used up, and whether the projects with the funds raised in the previous round have achieved the expected benefits.
●Strictly require that the funds raised by listed companies should be invested in the main business, and strictly limit diversified investment.
●The refinancing of real estate listed companies is not subject to the restrictions of breaking the bank, breaking the net and losing money.
The China Securities Regulatory Commission further regulates the shareholding reduction behavior
●Where a listed company breaks the company’s stock or net income, or has not distributed cash dividends in the past three years, and the accumulated cash dividends are less than 30% of the average annual net profit in the past three years, the controlling shareholders and actual controllers shall not reduce their capital holdings through the secondary market. company shares. Persons acting in concert with controlling shareholders and actual controllers shall follow the above requirements; if a listed company discloses that it has no controlling shareholder or actual controller, the largest shareholder and its actual controller shall follow the above requirements.
●At the same time, strictly control the total amount of shareholding reduction by shareholders of other listed companies, and guide them to reasonably arrange the pace of shareholding reduction according to market conditions; encourage controlling shareholders, actual controllers and other shareholders to promise not to reduce shareholdings or extend the lock-up period of shares.
●The China Securities Regulatory Commission is rushing to revise the “Several Regulations on the Shareholding Reduction of Shareholders, Directors, Supervisors and Senior Executives of Listed Companies” to enhance the effectiveness of the rules, refine the relevant liability clauses, and intensify the crackdown on illegal shareholding reduction.
The stock exchange lowered the ratio of financing margin to support moderate financing needs
●Approved by the China Securities Regulatory Commission, the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange issued a notice to revise the “Implementation Rules for Margin Trading and Securities Lending Transactions”, reducing the minimum margin ratio for investors to purchase securities from 100% to 80%. This adjustment will be implemented after the market close on September 8, 2023.
●This adjustment applies to both newly opened contracts and stock contracts, and investors can apply the new margin ratio without closing stock contracts.
●Securities companies can comprehensively evaluate the credit investigation and contract performance of different customers, and reasonably determine the margin ratio of customers.According to the official website of the China Securities Regulatory Commission
Review Stamp Duty Adjustment History
1990
Stamp duty was levied in Shenzhen. At that time, traders who sold stocks paid 6‰ of the transaction amount. In November of the same year, the Shenzhen market also levied a stamp duty of 6‰ for buyers.
October 10, 1991
The stamp duty was lowered from 6‰ to 3‰, which was the first adjustment of stamp duty in the history of my country’s securities market. After the adjustment, the big bull market started.
May 12, 1997
Stamp duty was raised from 3‰ to 5‰.
June 12, 1998
The stamp duty was lowered from 5‰ to 4‰. On the first trading day after the adjustment, the stock index rose slightly by 2.65%.
June 1999
The stamp duty rate for B-share transactions is reduced to 3‰. The Shanghai Composite B Index soared from 38 points to 62.5 points within a month, an increase of more than 50%.
November 16, 2001
The stamp duty was lowered from 4‰ to 2‰. After the adjustment, the stock market had a market price of more than 100 points.
January 23, 2005
The stamp duty was lowered again, from 2‰ to 1‰. After adjustment, on January 24, the stock index closed up 1.73%.
May 30, 2007
The stamp duty was raised from 1‰ to 3‰, which was the only increase in 10 years since 1997. The day after the increase, the two cities closed down more than 6%.
April 24, 2008
The stamp duty was adjusted from 3‰ to 1‰. After the adjustment, the Shanghai stock index closed up 9.29%, and the market almost rose by the limit.
September 19, 2008
The stamp duty on securities transactions has been changed from bilateral collection to unilateral collection, and the tax rate remains at 1‰. On that day, the Shanghai stock index hit the third largest increase in history, and more than 1,000 A-share stocks rose by more than 9%.
Beijing News reporter Hu Meng and Pan Yichun
2023-08-27 16:25:30
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