China: Shenzhen Stock Exchange lowers fees to shore up market confidence

Rick Steves

Stepping up the fee reduction and expanding the scope of beneficiaries through the roll-out of combined fee reduction measures follow China’s policy package aimed to stabilize the economy.

china

The Shenzhen Stock Exchange, SZSE, has announced it will roll out a combination of fee reduction measures for 2023, exempting the listing fees for the SZSE-listed companies and funds and exempting the trade unit traffic fees for funds, bonds (excluding convertible bonds) and asset-backed securities.

In addition, Shenzhen Securities Communication Co., Ltd. and Shenzhen Securities Information Co., Ltd., both affiliated to SZSE, will respectively cut or exempt the communication gateway software service fees for trading in the SZSE market, the WAN access service fees and the service fees for the online voting of shareholders’ meetings. The combined reductions of fees are expected to exceed RMB300 million, up 161% from 2022.

The move comes on the heels of the China Securities Regulatory Commission and Hong Kong’s Securities and Futures Commission (SFC) announcing the (in principle) further expansion of the scope of underlying stocks eligible for trading under Chinese mainland-Hong Kong Stock Connect mechanisms.

The pragmatic cooperation between Chinese mainland and Hong Kong capital markets and the expansion of the programme will gain further visibility in international markets with the global expansion of HKEX, which has just opened an office in New York.

Fee reduction follows China’s policy package aimed to stabilize the economy

Over the last years, SZSE launched fee reduction measures several times to benefit enterprises and individuals in the real sense in accordance to the policies of the authorities.

This time, SZSE will exempt the listing fees for listed companies in an all-round way for two years in a row, to actually ease the burden on corporate entities.

No fees will be charged for the listing or trading of bonds (excluding convertible bonds) on SZSE, so that all fees that could be removed are exempted.

Funds will be exempted from the listing fees for two years in a row, while the trading fee rate will be cut to a lower level, and the traffic fees for fund trading will be exempted as well.

Moreover, the companies under SZSE will introduce the measures to significantly cut or exempt fees for the SZSE-listed companies and market participants (particularly the small and medium-sized institutions).

Stepping up the fee reduction and expanding the scope of beneficiaries through the roll-out of combined fee reduction measures follow China’s policy package aimed to stabilize the economy. The goal is to boost the sense of gain among listed companies, investors, and market participants and shore up market confidence.

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