The CSRC's emergency research fund investment warrant may be approved 19 days ago

Our reporter Shen Xing Intern reporter Du Zhixin reports from Shenzhen

The pace of warrant listing is getting faster and faster.

On August 7, the Fund Department of the CSRC convened some investment directors and legal affairs personnel of fund companies to Beijing to discuss warrant investment. After the meeting, it was reported that the CSRC might specifically approve the fund investment warrants 19 days ago.

Previously, on August 5, the share reform plan of Changjiang Power (600900) was passed. One of the plans was to launch warrants.

　　 Investment Challenges

It is reported that at the meeting held on the 7th, representatives of various fund companies mainly expressed their opinions. After listening to the opinions, the regulatory authorities did not make a clear statement.

"As a mainstream investor, the fund is still under discussion on matters related to investment warrants, regulations and the CSRC", said Wang Qiqiong, a financial engineering researcher of E Fund, "once the fund has the qualification of investment warrants, the amount will not be large in a short time."

The most urgent issue for fund investment warrants is the qualification. "In fact, as far as the qualification of fund investment warrants is concerned, the regulatory authorities have neither explicitly prohibited nor allowed it," Wang Qiqiong said.

Article 58 of the Law of the People's Republic of China on Securities Investment Funds stipulates that "the fund assets shall be used for the following investments: stocks and bonds listed for trading, and other types of securities prescribed by the securities regulatory authority under the State Council." The investment scope of the fund stipulated in the contract is almost the same.

Zhu Ping, the deputy general manager of Guangfa Fund, believes that warrants are innovative financial instruments launched in the reform of non tradable shares and are naturally recognized by the CSRC. Since the fund can invest in other securities specified by the securities regulatory authority, the fund investment warrant must be agreed.

"It is expected that the relevant departments will soon make some policy provisions to this end, so as to open the door for funds to trade warrants," said Hu Lifeng, chief fund analyst of Galaxy Securities, "After the relevant departments launch the unified guidelines, the fund companies shall apply to the relevant regulatory authorities, and then modify the fund contracts according to the risk types of the funds under their management so that they can engage in warrant trading."

Whether we can buy is a question, and how much we can buy is another question. In fact, the proportion of investment warrants is also particularly noticeable.

Cen Weichang, deputy general manager of Kingsoft Great Wall Fund, said, "As an investment tool, it depends on how it is used. It is estimated that the regulatory authorities will limit the investment proportion of warrants. As there are similar regulations in Hong Kong, the investment quota of the issued stock investment funds in Hong Kong to invest in warrants generally accounts for 3% - 5% of the net asset value of the fund."

"Once the regulations are relaxed, in addition to the investment proportion stipulated by the laws and regulations, funds will not hold warrants on a large scale, which is generally believed to be around 3% - 5% in the industry, and this proportion is mainly based on risk considerations," said Zhang Songlin, product design director of Huatai Securities Research Institute.

For this high-risk product, can all types of funds conduct warrant trading, or is it limited to high-risk stock funds? Zhong Jianhui, manager of First Venture Securities Consulting Department, said: "The investment proportion of the fund in warrants should be determined according to the characteristics of the fund itself."

According to a person who participated in the investment warrant forum, no consensus was reached on the above issues at the meeting.

The deputy director of investment of a fund company in Shenzhen told the reporter that he hoped that the measures on warrants could be introduced as soon as possible to learn from the lessons of the last short-term financing bonds. "Since money market funds have not been allowed to invest in short-term financing bills, people dare not buy them because they are afraid of violating the rules. Later, on the last day of the meeting when subscription for short-term financing bills ended, they were informed orally that they could invest, which resulted in some money market fund managers not having time to buy them. In fact, the formal method was not introduced until the beginning of this month."

　　 Operational risk

According to the participants, in addition to legal barriers, many fund companies have mentioned improving risk control. "Investors need to pay attention to the risk of violent price fluctuations, timeliness risk and performance risk. Warrant trading is somewhat speculative. If the operating rules are not standardized and transparent, it is easy to be used as a tool to manipulate market share prices."

For such high-risk financial securities products with leverage effect, how fund companies formulate participation strategies and control risks is the top priority. After being allocated warrants, should the fund follow the principle of passive holding, that is, holding the exercise at maturity, or can it adopt the active operation strategy? It was reported that there was no consensus on these issues at the meeting.

According to insiders, even in mature overseas markets such as the United States, regulators have strict restrictions on the types and quotas of mutual fund warrants. Overseas mutual funds can only hold put warrants to hedge risks when they hold stocks in cash. Moreover, the types of warrants purchased by the fund must be corresponding to the stocks held to ensure that they are not used for profit seeking purposes.

"For the risk of fund investment in warrants, the key is to see the investment proportion and the liquidity of the warrants themselves. For example, the liquidity of indexed warrants is much greater than that of individual equity certificates, and the risk of warrants is also smaller. When the fund buys a certain stock, if it buys the hedging warrants of the relevant stock, it can be used to balance the risk of buying and selling stocks, but if it wants to use the warrants to make money, there is a relatively big risk. " Said the deputy director of investment of a fund company in Shenzhen.

According to a person from CICC, "there was a short history of warrant trading in China's securities market. The first warrant in China's securities market was the Dafeile Rights Issue Warrant launched in Shanghai Stock Exchange in June 1992. Later, in 1994, Shenzhen Bao'an Company also sent the rights issue to circulation shareholders in the form of warrants." However, due to wild speculation, the exercise price of Bao'an warrants was far higher than the stock price, Theoretically, it is worthless, and the warrant has ended up with nothing in China.

"At present, among the participants in China's securities market, institutional investors have occupied an absolute share, and investors are more rational. It is difficult to repeat the history of crazy speculation of warrants." A person from CICC said, "However, in recent years, the downturn of the stock market has led to light trading in the market, and investors' enthusiasm for trading has decreased. The market is looking forward to new investment varieties and expanding investment channels."

"Warrants are mainly a hedging tool and a product innovation, which is absolutely a good thing," said Lu Zonghui, a special researcher at Guosen Securities Research Institute.

Cen Weichang, deputy general manager of Kingsoft Great Wall Fund, also believes that there are not many companies that can issue warrants in China, and the short-term impact on the market should be small. Once the warrants are introduced, we should first do a good job of investor education, which will not increase the risk, as long as the fund company effectively controls the proportion of warrants and does a good job of internal risk control.

"With the increasing abundance of warrant products, the development of funds with warrants as the main investment target will also enter the vision of fund companies." According to a fund manager, there have been special warrant funds in the Hong Kong market.

"Once the fund participates in the warrant investment, the future competition in the fund market will become more intense. Fund managers need to consider more about the portfolio and investment varieties, which depends on the strength of fund managers." Lu Zonghui said.