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After the meeting of the Finance Committee on March 16, the three banks immediately held a meeting to implement it. The CSRC stated that it would continue to strengthen communication with US regulators, strive to reach an agreement on China US audit and supervision cooperation as soon as possible, and speed up the implementation of new regulations on the supervision of overseas listing of enterprises. At the same time, encourage listed companies to increase their holdings and repurchase, guide fund companies to purchase their own shares, increase the cultivation of public funds and other institutional investors, and encourage long-term investment and value investment.
On March 17, according to the news from China Securities Depository and Clearing Co., Ltd. on the 17th, in order to implement the spirit of the special meeting of the financial commission of the State Council, reduce the cost of market funds and serve the healthy development of the real economy, China Clearing, in cooperation with the ongoing DVP reform, has reduced the payment proportion of the minimum settlement reserve for stock business from 18% to 16% from April 2022.
In fact, on January 14, 2022, China Securities Regulatory Commission (CSRC) launched the reform of cash against delivery and simultaneously solicited opinions on the settlement rules and the measures for the administration of settlement provisions. The DVP reform is conducive to enhancing the security of the settlement system from the system and further attracting foreign funds to enter the Chinese market.
Over the years, China’s capital market has implemented the settlement mode of “T-day securities transfer and T + 1-day capital settlement”. T-day securities transfer is unconditional transfer, and securities transfer is not linked to capital settlement. On the premise of keeping the above settlement mode basically unchanged, the reform has established the relationship between securities settlement and capital settlement by setting marks for institutional proprietary and custody businesses.
In the 2019 version of the administrative measures for settlement provisions, China Clearing requires 10% of bond settlement provisions and 18% of other securities.
As of Q3 of the 21st year, the provision of listed securities companies was 501.9 billion and that of customers was 356 billion. According to the calculation of Shenwan Hongyuan Group Co.Ltd(000166) non bank team at the beginning of 2022, the stock provision accounted for about 52%. This reform reduced the payment proportion of the minimum settlement provision of stock business from 18% to 16%. We calculated that the working capital that should be released exceeded 30 billion. If optimistic, assume that the customer reserves are stock businesses, releasing liquidity of more than 39.5 billion.
At the meeting of the Finance Committee on March 16, it was clearly stressed that relevant departments should earnestly assume their responsibilities and actively introduce policies conducive to the market. Financial institutions must proceed from the overall situation and firmly support the development of the real economy. We welcome long-term institutional investors to increase their shareholding ratio, which also reflects the care of Jinwen Society for the market.
