Initial public offering of ETF customized interest chain ban. Excessive redemption or hinder ETF development

Initial public offering of ETF customized interest chain ban. Excessive redemption or hinder ETF development
Original title: From the bottom of the public offering ETF “customization” benefit chain Li Wei “customization-reduction of holdings” This logical chain brings the problem that the value of some ETF products from the time of establishment to the time of establishment.”The public believes,” Basically, this type of custom ETF will shrink in size.”The supervisory layer divided the shareholders of listed companies by holding excessive shares of exchange-traded fund shares, and required that the size of their conversions not exceed the weight of ETF shares in the index; after this step guidance appeared, some listed companies such as Siwei TuxinShareholders began to give up their respective ETF shares.  What the regulatory authorities have interrupted is that over the past three years, public offering institutions have provided a customized product chain of interests for the needs of shareholders of listed companies to reduce their holdings in order to increase management scale.  21st Century Business Herald reporters understand that starting from 2016, the provision of “customized services” for ETF products to specific objects has gradually become a development model for public offering institutions to develop ETF products. The main way is for public offering institutions to actively and partially reduceShareholders who hold stock or market value management needs conduct marketing and customize products based on their needs, and facilitate over-reductions by means of over-subscription.  With the advancement of ETF customization, equity ETF products have also developed rapidly.A few days ago, however, this model stepped on the brakes due to the guidance of the regulators.  The revised relevant person believes that public offering institutions have facilitated the reduction of holdings of customized ETF products for shareholders of listed companies, thereby violating the essential attributes of public offerings as investment vehicles, leading to tracking errors caused by excessive redemption, and also giving some small and medium-sized companiesInvestors bring injustice.  The first product to return to history is Huitianfu’s accompanying the Shanghai State-owned Enterprise ETF.  In the summer of 2016, Huitianfu Shanghai State-owned Enterprise ETF was officially issued. As a narrow-based ETF, the total size of Shanghai State-owned Enterprise ETFs reached 152.At 20 ppm, this scale was the third largest of all ETFs after the two 300ETFs behind Huatai Perry and Harvest, and it was also the largest issuer of narrow-base ETFs.  The 21st Century Business Herald reporter learned that at that time was the key period for the reform of state-owned enterprises, and on this basis, Hui Tianfu had marketing communications with relevant state-owned assets departments in Shanghai and finally determined this product form.  ”One of the main directions for the reform of state-owned enterprises is from ‘managed enterprises’ to ‘managed capital’. At the same time, the state-owned assets reform in Shanghai was vigorously promoted at the same time, and ETFs could have the ability to bring integration effects to state-owned shares to a certain extent.”A person familiar with the situation of Shanghai State-owned Assets Management disclosed that,” The state-owned asset holding platform naturally became the focus of service.”” In fact, this is also the way to deepen the mixed reform of state-owned assets, because state-owned enterprises can use shares to issue ETFs and also raise funds from the society at the same time. It is equivalent to the state-owned enterprises’ over-subscription and reduction of shares through the operation of products.Accepted by social capital.”The above-mentioned disclosures are close to those of Shanghai state-owned assets.” For the state-owned assets, the ETF can both solve the problem of reducing holdings and realize share management.”At that time, the emergence of the Shanghai state-owned enterprise ETF and even the ETF customization model was a product of financial products serving the reform of state-owned enterprises.Prior to this, there were also sporadic public offering institutions that issued ETF products to provide redemption for relevant shareholders, but their scales were mostly limited.  In fact, on the eve of the listing of the Shanghai State-owned Enterprise ETF, the Shanghai state-owned partnership held the main holders. The four largest holders of China Sheng Group, Shenneng Group, Shanghai Urban Investment, and Shanghai Huayi held the total share of the fund.The ratio reached 56.67%.  The scale effect and management fee income brought by the Shanghai State-owned Enterprise ETF’s customized thinking are all jealous of the fund industry.  At the same time as the Shanghai state-owned enterprise ETF was issued, Boshi Fund invested in the demonstration of the central enterprise ETF project, and in March 2017, the central enterprise division was established to discuss cooperation possibilities with the central enterprise.  ”With the experience of the Shanghai state-owned enterprise ETF, Bossie’s several funds relayed, and eventually the shareholders of the listed company of the state-owned enterprise became the holders of the ETF.”A shareholder close to Chengtong disclosed,” As a result, central enterprises have achieved the goals of share adjustments, reductions in shareholding, and the management scale of fund companies has also increased.”After nearly two years of preparations, in June 2018, the central enterprise structure index started to be established by the central enterprise Chengtong Holdings led the way.  On August 27, Boshi Fund based on this index, by absorbing a large number of central SOE listed companies’ shareholders to buy and issue central exchange ETFs, the total scale reached 252.2.2 billion, surpassing the Shanghai state-owned enterprise ETF in one fell swoop, becoming the second largest ETF in history.  At the same time, Huaxia and Yinhua participated in the reform of the central SOEs issued by multiple companies, and the ETFs of the central SOEs reached 138 respectively.1.2 billion, 54.8.9 billion yuan, the total size of this type of ETF of the three public offering institutions is as high as 483.US $ 3.8 billion, while Beijing Chengtong Financial Control and CNPC each hold the largest holders of this type of product.  ”In order to meet the needs of the exchange benchmark index, this index is also tailored. Of course, there are some central SOE shareholders that do indeed have over-subscription performance, so the connected funds issued at the same time also have the effect of attracting social capital.”” The above-mentioned person close to Chengtong Holdings said, “Of course, it is not excluded that some central enterprises have achieved the goal of reducing their holdings in disguise in this way.”In fact, since August 27, 2018, the above-mentioned three central SOE ETFs have undergone changes such as listing and large-scale purchases, and their total allocation scale has started from 483.3.8 billion parts shrank to 303.8.7 billion copies, the scale of evaporation in more than a year reached 179.5.1 billion parts, a shrinkage ratio of 37.14%.  ”The probability of these shared shrinkages is also a reduction in the holdings of state-owned shareholders who were redeemed at that time.”” A public product analyst in Shanghai said.  Barbarism grew up in local state-owned assets, and played a service role in the reform process of central enterprises. ETF customization was further promoted by the public offering industry.Public offering institutions are also more willing to contact some institutions and private capital to reduce their holdings and customize ETF products accordingly.  ”Many public offerings have seen this business opportunity. If they can’t do business with state-owned enterprises, then they can do some financial institutions and private enterprises.”Beijing public offering agency product person frankly said,” So this model was quickly rolled out, and tailoring ETF products for shareholders has become the choice of more and more fund companies.”21st Century Business Herald’s statistics show that there are 49 ETFs newly listed in 2019, with a total size of 1,192 at the time of issuance.4 billion U.S. dollars, but there are more than 28 debt-based ETFs with customized features, accounting for more than half. The features mainly cover topics such as industry, region, and private enterprise concepts.  For example, the leader of the military industry ETF issued by Wells Fargo Fund in May this year is the main owner of the aviation service. The seven listed companies of the aviation industry also issued announcements shortly that shareholders intend to use the ETF to buy shares.  ”This ETF was customized by the cooperation between Wells Fargo Fund and AVIC.”” A person close to the Wells Fargo Fund also said, “Some of the listed companies of the central SOEs have more companies. When index customization is made, these companies can also be included to meet the shareholders’ reduction and share management needs.”After the issuance and listing of Wells Fargo’s military industry, its scale has also dropped sharply, and its issuance scale reached 72.2 billion copies, but within six months its size has dropped sharply to 58.5 billion copies, a reduction of more than 13.52 billion copies.  In fact, in such products, reductions are often accompanied by product launches and operations.According to statistics from reporters, out of the 50 ETFs listed this year alone, more than 8 ETFs have seen their latest expansions decrease compared with the time of issuance, with a total reduction of 382.With 1.6 billion copies, in contrast, only China Mobile’s 5G ETF has grown in size, and the growth has only been 6.45 billion copies.  ”The problem with the logic chain of customization-reduction is the replacement of some ETF products when they were established.”” The product person said, “This type of custom ETF will basically shrink in size after its establishment.”And in some ETF products, a large proportion of excess redemptions have occurred for some shareholders.For example, on September 19, in the Ping An Fund’s Ping An CSI Guangdong-Hong Kong-Macao Greater Bay Area Development Theme ETF (hereinafter referred to as the Bay Area ETF), everyone’s life (formerly Anbang Life) held 1.9.6 billion shares of Vanke A were redeemed, and the redemption amount at the time was 52.5.3 billion, while the total issue size of the Bay Area ETF is only 60.One billion US dollars, which also means that the proportion of China Life Insurance’s contribution to Vanke A alone accounts for 87% of all products.40%.  ”In terms of market value, Vanke A is definitely an important heavy stock in this index, but it looks very different from the 80% or more ratio, so it must be caused by the oversubscription of everyone’s life.”An insurer close to everyone disclosed,” but in the case of over-subscription, the ETF manager needs to follow and adjust the index, so it is also necessary to sell these excess stocks.北京夜生活网“In the eyes of some people, ETFs with regional, industrial, and private enterprise characteristics can basically be identified as customized products.  ”Because the development of the domestic distribution market is still immature, if this ETF is not a customized product and the major shareholders do not exchange stocks, it will be difficult to raise funds.”The above is close to everyone who finds insurance,” so in order to manage the scale, the fund company began to actively market this solution to many large shareholders who need to reduce their holdings.”The dispute over violations. Now, this ETF race around the need to reduce the holdings of major shareholders of listed companies is going to end, accompanied by the guidance of the regulators.  According to the requirements of the regulatory window, major shareholders who 淡水桑拿网 redeem ETFs must not violate the new rules for reducing their holdings.  However, according to 21st Century Business Herald reporters from multiple public fundraisers, as early as the implementation of the new rules to reduce holdings in 2017, the exchange has paid attention to this phenomenon and required public fund managers to turn in ETFs.Provide a letter of commitment to meet the requirements of the new regulations.  ”At that time, a letter of commitment must be submitted, and the new regulations on reducing holdings cannot be violated in this way, which is equivalent to whoever violates the regulations, and then the exchange can then make relevant determinations on the basis.”” The above product person admitted frankly, “But for the major shareholders, there is still an additional path to reduce holdings with a smaller scope, so fund companies are also actively involved in this business.”” However, according to the current restrictions on redemption by weight, excess redemption will not be allowed, and the significance of such customization is not significant.”The person admitted frankly.  However, there are many compliance disputes behind ETF’s customized business.  From the perspective of the product level, some large-scale over-purchases will easily lead to distorted tracking errors for ETF products, which will inevitably have an impact on the interests of small and medium investors.There is a natural opposition between human motivation and interest.  ”If the ETF adopts a custom model, the managers will certainly know that these listed company shareholders have certain reduction requirements, but external investors may not necessarily know that they are buying or investing in ETFs from the secondary market to earn growth.Income.”The product person said frankly.“同样作为持有人,被服务方具有天然的优势,而这些外部中小投资者却通过ETF的设计成为天然的‘接盘侠’,这不仅仅是对商业伦理的挑战,更有可能涉及利益输送problem.”It is worth mentioning that there have also been public-sector organizations that were damaged by the CSRC due to over-subscription.In 2013, the Southern Fund was reported by too many small and medium investors for accepting excessive redemption by its shareholders during the suspension of Yongtai Energy, and was eventually sued by the Securities and Futures Commission for ordering to rectify the regulatory measures for 3 months.The holder makes compensation.  ”Actually, because of investor protests, Nanfang was later punished, but during the restructuring of the ETF customization process, this kind of product issued to help shareholders reduce their holdings is not a benefit transmission.”The above-mentioned product person admitted frankly,” A one-size-fits-all prohibition of excess redemption will offset the development of ETFs by a certain length. On the contrary, it is more effective to investigate and punish suspected violations.”