BEIJING, March 18 (Xinhua) -- China Securities Depository and Clearing Co., Ltd. (CSDC), a central securities depository in the country, announced Thursday to reduce the minimum ratio of settlement reserve funds for stock-related business to 16 percent from 18 percent, effective as of April 1 this year, reported Xinhua Finance on Friday.
CSDC said the company was facilitating the ongoing delivery versus payment (DVP) reform and took the move in a bid to help lower the funding costs on financial market and better serve the real economy.
If calculating on basis of the average daily securities purchasing value in February, the report expected the cut to unlock around 20 billion yuan of funds on financial market, but the figure is up to changes in market turnover.
Industry insiders held that cutting the minimum ratio of settlement reserve funds for stock-related business will improve to some extent the capital use efficiency of market participants such as securities brokers and fund management firms, positive to the high quality development of capital market.
To support economic recovery of regions hammered more severely by the recent epidemic, CSDC said it would also reduce or exempt certain service fees.
For instance, equities and securities registration fees for STAQ, NET and delisting companies will be exempted. Securities registration fees for B shares, available to foreign investors, will be charged in accordance with the comparable standards for A shares. B shares are securities of companies incorporated in the Chinese mainland and traded either on Shanghai Stock Exchange (SSE) in U.S. dollars or on Shenzhen Stock Exchange (SZSE) in Hong Kong dollars.
Moreover, non-transaction transfer fees for B shares, B shares of STAQ, NET and delisting companies, H shares converted from B shares, bonds including asset-backed securities and ETFs will be temporarily exempted together with the commission for dividend distribution of closed-end fund and money market fund.
Furthermore, existing and newly listed companies, companies listed on the National Equities Exchange and Quotations (NEEQ), better known as the "new third board", and bond issuers registered in Tianjin Municipality, Inner Mongolia Autonomous Region, Jilin Province, Shanghai Municipality, Shandong Province, Henan Province, Shaanxi Province, and Shenzhen City will be exempted from registration fees in 2022 including securities registration fees, commission for dividend distribution, commission for redemption and sellback, online voting service fee and information inquiry service fees.
CSDC is owned by SSE and SZSE with each holding 50 percent equities and provides registration, clearing and settlement services for all the securities trading on SSE, SZSE, Beijing Stock Exchange and NEEQ. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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