- The new A-share trading regulations, revised simultaneously by the three major exchanges in Shanghai, Shenzhen, and Beijing, officially come into effect today. This comprehensive adjustment involves key changes such as expanding the scope of post-market fixed-price trading, modifying the fund closing auction mechanism, and relaxing the price fluctuation limits for risk warning stocks.
- The Shanghai and Shenzhen Stock Exchanges have expanded the scope of securities applicable to post-market fixed-price trading from a single board to all A-shares and exchange-traded funds. Additionally, they have uniformly raised the price fluctuation limit for main board risk warning stocks from 5% to 10%.
- The Shenzhen Stock Exchange has introduced a market maker system on the ChiNext board and extended the confirmation time for block trades, while the Beijing Stock Exchange has officially launched a post-market fixed-price trading mechanism in this new regulation and strengthened the regulatory arrangements for severe abnormal fluctuations.
Comprehensive Upgrade of Trading System
This revision represents a further improvement in the infrastructure of the multi-tiered capital market of A-shares. The Shanghai Stock Exchange has extended post-market fixed-price trading from the STAR Market to all A-shares and ETFs, with corresponding follow-up arrangements made by the Shenzhen and Beijing Stock Exchanges. This move aims to provide market participants, especially large institutional investors, with a more liquid and stable price-matching channel after the market closes, effectively alleviating irrational impacts on price fluctuations during the closing phase.
Adjustment of Auction Mechanism and Price Fluctuation Limits
The Shanghai Stock Exchange has changed the fund closing phase from continuous auction to closing call auction, aligning the price discovery mechanism of public and exchange-traded funds with international standards. Meanwhile, the Shanghai and Shenzhen markets have relaxed the price fluctuation limit for main board risk warning stocks from 5% to 10%. This change enhances the liquidity of high-risk stocks, allowing market pricing to more quickly reflect fundamental changes, thereby improving the market's self-clearing efficiency to some extent.
Differentiated Measures for ChiNext and Beijing Stock Exchange
The Shenzhen Stock Exchange has introduced a market maker system on the ChiNext board for the first time and extended the confirmation time for block trades to the intraday trading session. The inclusion of market makers is expected to significantly improve the liquidity premium of light-asset, high-growth enterprises on the ChiNext board. Meanwhile, the Beijing Stock Exchange has also addressed the shortcomings of the post-market fixed-price trading mechanism and clarified the regulatory red lines for risk warnings and delisting arrangements, further preventing systemic tail risks through tiered regulation.
Expectations for Market Efficiency and Liquidity
After the implementation of the new regulations, if all market participants can quickly adapt to post-market trading and the new auction model, the intraday volatility of the overall A-share market is expected to be marginally optimized. Institutional investors' asset allocation strategies and rebalancing actions at the close will become more stable, enhancing the market's capital allocation efficiency. However, if specific risk warning stocks experience severe fluctuations, it may also trigger a reassessment of intraday risk pricing in the market.
