Recently, the topic of whether the A-share market will implement "T + 0" has once again attracted attention. During the two sessions, He Qiang, a member of the National Committee of the Chinese People's Political Consultative Conference and a professor at the School of Finance of Central University of Finance and Economics, suggested that T + 0 should be achieved first in the Science and Technology Innovation Board. The Shanghai Stock Exchange said in response to the suggestions made by the representatives that it will introduce the market maker system in due course and study the introduction of a single T + 0 transaction. Does the A-share market have the conditions to implement T + 0 at this stage?
Double-edged sword T + 0: Investors can correct errors in time, mainly worried about triggering market fluctuations
In mature markets, T + 0 is a relatively common trading mechanism. From the perspective of the development direction of the Chinese stock market, the implementation of T + 0 is the future trend. The main controversy is whether the A-shares at this stage have the conditions to implement T + 0, and at which stage A-shares can be implemented.
The advantages of T + 0 trading are obvious. For investors, T + 0 allows timely error correction. It can adjust investment behavior in time according to market changes, lock in trading profits or avoid loss expansion; for the market, T + 0 can be active The market and increasing the utilization rate of market funds are also conducive to China's integration with the international capital market.
The most important point about the potential risks of T + 0 is that T + 0 is likely to cause large market fluctuations. On December 24, 1992, the Shanghai Stock Exchange launched T + 0, and the Shanghai index rose by 3.63% on that day. Since then, the Shanghai index has started a continuous upward trend. Until February 16, 1993, the Shanghai index rose from about 730 points to 36 in 36 trading days. 1558 points, more than doubled.
The Central Bank's "China Financial Stability Report (2014)" pointed out the three potential risks of T + 0 transactions, including induced settlement risks, increased market volatility, and increased market manipulation risks. It is proposed that T + 0 may induce investors to participate in the trading of securities more frequently. The same fund is bought and sold multiple times in a day, which increases the market transaction volume and increases the supply of funds. It has the effect of helping rise and fall, and aggravating market volatility.
The CSRC responded on June 28 last year why the Science and Technology Board did not introduce T + 0, saying that the introduction of the T + 0 system at this stage may trigger three major risks, including increased market volatility, which is not conducive to the protection of investors ’interests and is used to manipulate the market. Behavior provides space. At present, my country's A-share market has a high turnover rate, and the phenomenon of "small speculation, poor speculation, and new speculation" is still relatively common. According to statistics, from January 1, 2018 to May 17, this year, my country's A-share turnover rate reached 819%, with an average daily rate of about 2.9%. In the same period, the turnover rate of listed US stocks was about 344%, with an average daily rate of about 1.12%, the turnover rate of Hong Kong stocks was about 62%, and the average daily rate was about 0.25%. The turnover rate of A-shares was much higher than that of overseas markets. The introduction of the T + 0 system may induce small and medium investors to trade stocks more frequently, which artificially increases the supply of funds in the market and has the effect of helping the price of securities increase and decrease. In addition, under the T + 0 trading system, stocks can change hands multiple times within a trading day, and frequent trading provides more convenience for market manipulation.
The "T + 0" transaction was allowed in the Taiwan market of our country before 1985, but it was banned in July 1985 due to excessive risks. It was not gradually released until after 1994 when various conditions and environment were mature. Although the United States allows investors to conduct "T + 0" transactions, it also sets a higher threshold for participation at the institutional level to avoid investors with insufficient risk-taking ability from participating in such credit transactions and to prevent investors from trading too frequently. Leading to large losses and causing risks to securities companies and even the settlement system.
Science and Technology Board takes the lead in piloting T + 0 calls for a higher landing in the future
Pilot T + 0 in some sectors may be more feasible.
As a test field for capital market reform, at the beginning of the establishment of the Science and Technology Board, some scholars and investors put forward proposals to implement T + 0 on the Science and Technology Board, but it was not introduced in the end. The China Securities Regulatory Commission stated that the T + 0 trading system can operate effectively, and requires a common guarantee of a reasonable investor structure, appropriate hedging tools, and comprehensive transaction monitoring methods. At this stage, my country's capital market is still immature, and small and medium-sized retail investors account for a large proportion of the investor structure. The characteristics of the unilateral city have not fundamentally changed, and market monitoring and monitoring methods are still insufficient. From the perspective of maintaining the stable operation of the market and protecting the interests of small and medium investors, the Science and Technology Board has not yet introduced the T + 0 trading system.
Li Xunlei, chief economist of Zhongtai Securities, once wrote that capital market reforms are prioritized. The cancellation of the price limit and T + 1 are all options that can be considered, but any system design is a double-edged sword. Compared with other system reforms, this The two trading systems are not considered the most urgent reform issues.
However, Li Xunlei also raised hopes for the next reform. He stated at the National “Two Sessions Economic Policy” salon held by the Beijing News on May 24 that A-shares need to be further improved in terms of the trading system, market rules, products and tools. He mentioned that the science and technology board registration system The restrictions on the rise and fall have been relaxed, but T + 0 has not yet been implemented.
He Qiang ’s proposal this time is also a pilot T + 0 trading system in the Science and Technology Board. He also suggested limiting the number of daily reversal transactions at launch, for example, the same stock can only be bought and sold once a day, and then gradually released.
On April 7 this year, the Financial Stability Development Committee of the State Council convened the 25th meeting, which proposed that the capital market should play a pivotal role, relax and eliminate regulations that do not meet development needs, and increase market activity.
On April 9, the "Opinions of the Central Committee of the Communist Party of China on Constructing a More Perfect Market-Oriented Allocation System for Factors" ("Opinions") was published, and the "Opinions" proposed to formulate opinions on improving the basic system of the stock market. Adhere to the direction of marketization and rule of law reform, reform and improve the stock market issuance, trading, delisting and other systems.
A series of policy-level signals once again ignited the market's enthusiasm for the further marketization of the trading system. Yang Delong, chief economist of Qianhai Open Source Fund, believes that deregulation may include T + 0. Now the maturity of the A-share market is getting higher and higher. It is worth noting whether it will be changed to T + 0 in the future.
Everbright Securities analyst Wang Yifeng said that the structure of A-share investors is still one of the main factors affecting the implementation of "T + 0". A-share individual investors account for a large proportion, and individual investors lack medium- and long-term research on corporate fundamentals. Judging that it is more sensitive to policy stimulus measures, there are often investment characteristics such as emotional and frequent transactions. It is expected that the A-share T + 0 system will "jog in small steps" and will gradually land in the future. The new "Securities Law" has laid a system foundation for increasing the penalties for counterfeiting and protecting the interests of small and medium investors, and has created good conditions for the further implementation of the T + 0 system. With the further optimization and improvement of the market structure and the entry of long-term funds into the market, the implementation of the A + T + 0 system can be expected.
T + 0 Past Events: Once canceled after A-shares were briefly implemented because they were believed to fuel speculation
Whether to implement T + 0 in A shares is a long-standing topic. He Qiang suggested that my country ’s stock market pilot T + 0 at the two sessions for eight consecutive years. But so far, the T + 0 system has not been launched in A shares.
T + 0 trading, also known as intraday trading or intraday trading, refers to the securities purchased by investors. After the transaction is confirmed, all or part of the securities are sold before settlement, which is simply the same day as the stocks bought on the day. Can be sold. At present, the A-share trading system adopts the "T + 1" trading system, that is, the stocks bought on the same day cannot be sold until the next trading day.
In the early 1990s, my country's stock market had briefly implemented T + 0 trading, but due to excessive speculation in the stock market at that time, T + 0 trading was considered to have contributed to market speculation. From January 1, 1995, in order to maintain market order and curb speculation, the A + T + 0 trading system was cancelled. The "Securities Law" implemented in 1999 stipulates that "stocks bought on the same day shall not be sold on the same day", which prohibits T + 0 trading of stocks.
However, in 2005, the Securities Law was amended to remove the regulations on "shares bought on the same day and not allowed to be sold on the same day". There is no legal obstacle to the implementation of the T + 0 trading system for A shares. But whether to actually implement T + 0 has experienced a long debate.
In 2013, the CSRC responded that the implementation of intraday trading was a systematic project involving exchanges, securities companies, investors and other market participants. Mature overseas markets also generally implement special management methods and regulatory measures for intraday trading. The reversal trading implemented in my country's stock market requires in-depth and meticulous research and evaluation, and comprehensive and detailed preparations. At present, there is no timetable for launching the A-share intraday reversal trading.
In March 2014, Xiao Gang, the former chairman of the China Securities Regulatory Commission, said in an interview with the media during the two sessions that the China Securities Regulatory Commission is studying the possibility of implementing the "T + 0" system, and has not yet decided whether to launch it. Not all will be released.
In May 2014, the "Shanghai Stock Exchange 2013 Annual Report Overall Analysis Report" released by the Shanghai Stock Exchange stated that the blue chip market is not active enough, and it can give more trading freedom in the setting of the trading mechanism. For example, it can continue to study and promote the large-scale blue chip "T +" 0 "trading and other differentiated trading mechanisms. This is considered to be a signal that "T + 0" is about to be launched quickly. At that time, the market guessed that T + 0 will initially choose the 50 constituent stocks of SSE as a pilot.
The central bank also expressed its position on the "T + 0" trading system. In 2014, the Central Bank stated in the "China Financial Stability Report (2014)" that my country's stock market is still generally in the "emerging plus transition" stage. Whether the current A-share market implements "T + 0" transactions requires a comprehensive study and prudent treatment.
Two years later, in the "China Financial Stability Report (2016)", the central bank reiterated that it will treat the A-share market "T + 0" cautiously, saying that China's capital market system is still incomplete, and the risk control system of various institutional investors is still weak. The irrational behavior of small and medium-sized investors is still outstanding. Without the fundamental changes in the relevant environment, the hasty recovery of stock “T + 0” trading not only does not help to improve market efficiency, it may also encourage high-frequency trading and exacerbate the financial speculation atmosphere. To induce systemic financial risks.
Beijing News reporter Gu Zhijuan