5 securities firms collectively announce commission reductions!, Responding to the requirements of the China Securities Regulatory Commission

As of the evening of August 24th, CITIC Securities, CITIC Construction Investment, Guotai Junan, Caida Securities, and Haitong Securities have officially announced commission cuts, all of which will be implemented from August 28th.

In fact, prior to this, securities firms had been actively taking action, including responding to regulatory authorities' package policies on active capital markets through self purchases, repurchases, and other means.

Industry insiders say that based on the effects of similar policy releases in the past, the second trading day saw a majority of index gains, with a significant effect on the active market. For securities firms, brokerage business is expected to benefit from the expansion of trading volume after the increase in market activity. In addition, this policy combination has exceeded expectations and is fully optimistic about the securities market.

5 securities firms collectively announce commission reductions

On the afternoon of the 24th, CITIC Securities issued a notice on reducing investor trading commissions, stating that in accordance with the "Further Reduction of Securities Trading Fees by the Shanghai, Shenzhen, and North Stock Exchanges" issued by the China Securities Regulatory Commission and the "Notice on Lowering the Fee Standards for Stock Trading Fees" issued by the Shanghai, Shenzhen, and North Stock Exchanges, CITIC Securities actively responded to the spirit of the documents issued by the China Securities Regulatory Commission and the Shanghai, Shenzhen, and North Stock Exchanges, and effectively transmitted the policy effect of reducing securities trading fees to investors.

According to the "Notice Letter" in the picture, starting from August 28, 2023, CITIC Securities will uniformly reduce the trading commission of existing investors. Among them, the trading commission of A-shares, B-shares, and depositary receipt varieties on the Shanghai and Shenzhen Stock Exchanges will be uniformly reduced by 0.00146% on the basis of the original commission of investors; The commission for bulk trading of Shanghai and Shenzhen A-shares and Shanghai B-shares will be uniformly reduced by 0.001022% on the basis of the investor's original commission, while the commission for bulk trading of Shenzhen B-shares will be uniformly reduced by 0.00073% on the basis of the investor's original commission; The commission for trading ordinary and preferred shares on the Beijing Stock Exchange will be uniformly reduced by 0.0125% on the basis of the investor's original commission.

On the same day, CITIC Securities also issued a notice on lowering the standard for stock trading fees. The Notice states that the China Securities Regulatory Commission issued an announcement on August 18, 2023, regarding the further reduction of securities trading fees by the Shanghai, Shenzhen, and North China Stock Exchanges. Starting from August 28, 2023, the trading fees for A-share and B-share securities will be reduced from a two-way fee of 0.00487% of the transaction amount to a two-way fee of 0.00341% of the transaction amount, and the Beijing Stock Exchange will be reduced from a two-way fee of 0.025% of the transaction amount to a two-way fee of 0.0125% of the transaction amount.

According to the notice, as of August 28, 2023, existing investors who have opened fund accounts with CITIC Construction Investment will have their commission rates reduced proportionally based on the original A-share, B-share, and Beijing Stock Exchange securities trading commission rates, according to the corresponding trading varieties in the notice.

Guotai Junan has also issued a notice letter regarding the reduction of trading fees for certain types of securities. The notification letter states that in order to fully implement the issue of "further reducing securities handling fees on the Shanghai, Shenzhen, and North Stock Exchanges" as stated by the relevant person in charge of the China Securities Regulatory Commission on revitalizing the capital market and boosting investor confidence, Guotai Junan Securities plans to effectively transmit the policy effects of the China Securities Regulatory Commission to investors by lowering the commission rate of customer accounts and adjusting the handling fee parameters.

The picture notification letter states that the scope of this commission adjustment is for all ordinary and credit fund accounts of Guotai Junan Securities. The commission rates for securities trading of A-shares, B-shares, and depositary receipts on the Shanghai and Shenzhen Stock Exchanges will be uniformly reduced by 0.00146% on the original basis, and the securities trading fees on the Beijing Stock Exchange will be reduced from "bilateral collection of 0.025% of the transaction amount" to "bilateral collection of 0.0125% of the transaction amount". The commission adjustment standard will be officially implemented from August 28, 2023.

In addition, Caida Securities also issued a notice letter today regarding the reduction of trading commissions for investors. Starting from August 28, 2023, the company will uniformly lower the trading commissions for existing investors. Among them, the trading commissions for A-shares, B-shares, and depositary receipt varieties on the Shanghai and Shenzhen Stock Exchanges will be uniformly reduced on the basis of the original commission of investors, with a reduction of 0.00146%; The commission for bulk trading of Shanghai and Shenzhen A-shares, depositary receipts, and Shanghai B-shares will be uniformly reduced on the basis of the investor's original commission, with a reduction of 0.001022%; The bulk trading of B-shares in the Shenzhen Stock Exchange will be uniformly reduced based on the original commission of investors, with a reduction of 0.00073%; For all investors, the trading fees for ordinary and preferred shares on the Beijing Stock Exchange will be uniformly reduced on the basis of the original trading fees for investors, with a reduction of 0.0125%; The handling fee for convertible corporate bond trading on the Beijing Stock Exchange will be uniformly reduced on the basis of the investor's original handling fee, with a reduction of 0.00625%.

Haitong Securities has issued a notice letter regarding the reduction of trading commissions for certain varieties. Starting from August 28, 2023, the trading commissions for existing investors will be uniformly reduced. Among them, the trading commission for A-shares, B-shares, and depositary receipt varieties on the Shanghai and Shenzhen Stock Exchanges will be uniformly reduced by 0.00146% on the basis of the investor's original commission; The commission for bulk trading of Shanghai and Shenzhen A-shares and Shanghai B-shares will be uniformly reduced by 0.001022% on the basis of the investor's original commission, and the commission for bulk trading of Shenzhen B-shares will be uniformly reduced by 0.00073% on the basis of the investor's original commission; The commission for trading ordinary and preferred shares on the Beijing Stock Exchange will be uniformly reduced by 0.0125% on the basis of the investor's original commission.

Responding to the China Securities Regulatory Commission's requirement to reduce handling fees

In fact, the official announcement of commission reduction by securities firms this time is in response to the previous mention by relevant officials of the China Securities Regulatory Commission of "further reducing securities handling fees".

On August 18th, the relevant person in charge of the China Securities Regulatory Commission answered questions from reporters on revitalizing the capital market and boosting investor confidence. The China Securities Regulatory Commission stated that it will optimize and improve the trading mechanism to enhance trading convenience. At present, it has been announced to reduce the payment ratio of settlement provisions, lower the requirements for the number of stock fund declarations, study the introduction of ETFs into the post market fixed price trading mechanism, and introduce the ChiNext inquiry transfer and allocation reduction system. The next step will be to introduce the following measures: firstly, to reduce securities trading fees and simultaneously lower commission rates of securities companies. The second is to further expand the scope of margin trading and securities lending targets, reduce margin trading and securities lending rates, and include ETFs in the scope of refinancing and securities lending targets. The third is to improve the system of share reduction, strengthen the supervision of illegal reduction and "detour" reduction, and strictly punish illegal reduction behaviors. The fourth is to optimize transaction supervision, enhance transaction convenience and smoothness, and enhance the transparency of transaction supervision. Timely launch a programmatic transaction reporting system. The fifth is to study the appropriate extension of trading hours in the A-share market and exchange bond market to better meet investment trading needs.

According to relevant requirements, starting from August 28th, the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange will reduce securities trading fees.

Open source securities analysis suggests that due to the handling fees being collected and paid by securities firms, they are often packaged and priced in commission rates. Therefore, regulatory emphasis is placed on synchronously reducing the commission rates of securities firms, transmitting the effect of fee reduction to investors. It is expected that the net commission rate of securities firms after deducting the handling fees will not be affected.

The Shanghai and Shenzhen Stock Exchanges have lowered the handling fees for A-share and B-share securities trading from a two-way fee of 0.00487% of the transaction amount to a two-way fee of 0.00341% of the transaction amount. According to calculations by Anxin Securities, based on a trading volume of 224 trillion yuan in 2022, it is expected to yield approximately 6.5 billion yuan to the market.

In the view of Open Source Securities, this policy combination has exceeded expectations and is fully optimistic about the securities market. The China Securities Regulatory Commission has implemented measures on the investment side, asset side, and trading side of the capital market this time. Some policy statements exceeded expectations, and the market has insufficient expectations for securities firms to expand their balance sheets. Taking a long-term approach and strengthening cross departmental communication and collaboration, more measures may be implemented in the future to introduce medium - and long-term funds, benefiting the securities business comprehensively.

Zhejiang Securities believes that the trading costs of investors include stamp duty, stock transfer fees, securities management fees, trading handling fees, brokerage commissions, etc., which have been lowered in history. From the perspective of the effect after the policy was released, on the second trading day, the index showed a significant increase, indicating a significant effect on the active market. For securities firms, brokerage business is expected to benefit from the expansion of trading volume after the increase in market activity.

Some securities firms are actively self purchasing and repurchasing

In addition to the official announcement of a commission reduction, several securities firms have also been actively responding to the regulatory authorities' package of policies on active capital markets through self purchases, repurchases, and other means recently.

In terms of self purchase, multiple securities firms have announced the purchase of their asset management products. On August 21st, Guotai Junan Securities Asset Management Co., Ltd. announced that based on its confidence in the long-term healthy and stable development of China's capital market, as well as the principle of sharing risks and returns with investors, Shanghai Guotai Junan Securities Asset Management Co., Ltd. will invest a total of 200 million yuan in its equity public fund using its inherent funds in the near future.

On the same day, CITIC Securities also announced that based on its confidence in the long-term healthy and stable development of the Chinese capital market, CITIC Securities Co., Ltd. will use its own funds to invest a total of 100 million yuan in its equity and mixed asset management plans in the near future.

On August 21st, China Merchants Asset Management also announced that based on its confidence in the long-term healthy and stable development of the Chinese capital market and the company's proactive investment management ability, China Merchants Securities Asset Management will use its own funds to subscribe to its public participation operation collective plan in the near future, with a total planned subscription amount of 20 million yuan and a holding period of no less than 6 months. As of the same day, the company's own funds have invested over 50 million yuan in its public participation operation collective plan. After the completion of this follow-up investment, the company's own funds will invest over 70 million yuan in its public participation operation collective plan.

On August 24th, CITIC Securities announced that based on its confidence in the long-term healthy and stable development of China's capital market, it will use its own funds to subscribe to its collective asset management plan, which operates in accordance with public fund management, in the near future. It plans to continue to subscribe for a total amount of 30 million yuan. After the completion of this subscription, Guoxin Securities will invest its own funds in equity and mixed asset management plans, which will exceed 100 million yuan.

In terms of repurchase, on the evening of August 23, Guojin Securities announced that it had received a letter from controlling shareholder Changsha Yongjin proposing Guojin Securities Co., Ltd. to repurchase the company's shares. Guojin Securities stated that its controlling shareholder, based on their confidence in the sustainable development of the company and high recognition of the company's value, proposes to repurchase the company's shares through the Shanghai Stock Exchange system through centralized bidding, in order to safeguard the interests of investors, enhance their investment confidence in the company, and promote stable and healthy development.

According to the announcement, the price for repurchasing shares will not exceed 12 yuan per share. The total amount of funds for repurchasing shares will not be less than 150 million yuan and not exceed 300 million yuan. The repurchase period is within 12 months from the date of approval of this repurchase plan by the shareholders meeting.

On August 24th, the leading stock of securities firm Dongfang Wealth, with a market value exceeding 240 billion yuan, also released a repurchase news, with a planned repurchase amount of up to 1 billion yuan.