SSE Launches Work Related to Listing of New Products of STAR 50 ETF Options
On May 12, 2023, the China Securities Regulatory Commission (CSRC) announced the launch of work related to the listing of STAR 50 ETF options on the Shanghai Stock Exchange (SSE). The SSE will earnestly prepare for the listing of the STAR 50 ETF options under the guidance of the CSRC. Promoting the listing of STAR 50 ETF options is an important measure for the SSE to implement the spirit of the 20th CPC National Congress and the task to "improve the financial support system for innovation" proposed in the Outline of the "14th Five-Year Plan", support the high-standard reform and opening up of Pudong New Area, and boost the innovation-driven development strategy, which is expected to enhance the capacity of STAR Market companies in sci-tech innovation and facilitate the construction of the STAR Market.
Since its establishment in 2019, the STAR Market has been making steady progress in its development, with stable and orderly market operations. In terms of supporting and encouraging the listing of companies with "key and core technologies", it has produced an increasingly prominent aggregation and demonstration effect. As of the end of April 2023, there have been 519 listed companies on the STAR Market, with a total market value of RMB 6.65 trillion yuan, further reinforcing its sci-tech innovation attribute. In response to the lack of corresponding risk management tools for the STAR Market, the SSE has been actively supporting the R&D of new products of STAR 50 ETF options according to market needs, treating it as a crucial measure for improving the supporting product system of the STAR Market, enhancing its attractiveness and liquidity, leveraging the function of the market-maker system, and continuing to play the demonstration and leading role of the STAR Market in piloting reforms. The listing of STAR 50 ETF options can effectively meet the risk management needs of STAR Market investors. It will help the STAR Market better function as a testing field for reforms in the capital market, bearing profound significance for promoting the long-term, sustainable, and sound development of both the STAR Market and the stock options market.
Since the pilot of the stock options launched in 2015, the SSE has consecutively released the SSE 50 ETF options, the CSI 300 ETF options, and the CSI 500 ETF options. During the past eight years, the SSE's stock options market has seen steady and sound development, displaying reasonable market pricing, steady growth in scale, and gradual fulfillment of economic functions. As a result, investors have been provided with a variety of risk management tools. The SSE places significant importance on risk prevention and control in the ETF options market. In light of the development characteristics of China's ETF options market, the SSE has implemented a series of risk control arrangements, including the investor suitability management system, margin system, and position limit system, to guarantee the smooth operation of the options market. As a broad-based ETF options product, the STAR 50 ETF options will generally apply the previous risk control measures, with its price limit parameter set to 20% in line with the price limit of stocks on the STAR Market. Relevant measures have been put in practice in the ChiNext ETF options market. Based on the effective risk prevention and control and market supervision measures currently in place, the SSE will further improve risk assessment, comprehensively strengthen market supervision, and ensure the smooth launch of new products.
Going forward, under the guidance of the CSRC, the SSE will collaborate with all relevant market entities to undertake proper business and technical preparations to guarantee the smooth listing of the STAR 50 ETF options.