The China Securities Regulatory Commission will be prudent in introducing same-day settlement (also known as T+0 settlement), to the A-share market, to protect small investors’ interests

Regulator ‘cautious’ on T+0 settlement

Updated: 2013-10-26 08:04

By Cai Xiao ( China Daily)The China Securities Regulatory Commission will be prudent in introducing same-daysettlement (also known as T+0 settlement), to the A-share market, to protect small investors’interests, an agency spokesman said on Friday.

T+0 settlement means that securities can be traded the same day.

With the approval of the CSRC, the Shanghai Stock Exchange has already amended some ofits regulations.

The new rules, released last week, state that same-day settlement is permitted for bondexchange-traded funds and gold ETFs.

Now, investors are waiting to see what happens on the A-share market.

“There is no legal barrier to permitting T+0 settlement on the A-share market, but we need tostudy it carefully,” said the spokesman.

He said that same-day settlement will support the equity market by facilitating trading,enhancing pricing efficiency and expanding the trading patterns of investors.

“But share turnover has been very high in China, so the new method may not improve liquidity,”said the spokesman.

“We’re concerned that introducing it to the A-share market will increase volatility. The interestsof small and medium-sized investors should be protected.”

The spokesman also said that the CSRC is undertaking preparatory work on the introduction ofpreferred shares, and it will seek public comment when the time is ripe.

The CSI300, which covers the leading Shanghai and Shenzhen A-share listings, ended Fridaydown 1.3 percent at 2,368.6 points, its lowest close since Sept 6. It fell 2.4 percent for theweek.

The Shanghai Composite Index slid 1.5 percent on Friday and 2.8 percent this week. That wasits biggest weekly loss since late June, when there was a cash crunch.

The People’s Bank of China didn’t schedule any money-market operations on Thursday, for athird consecutive session.

The PBOC has drained more than 157 billion yuan ($25.81 billion) since the week ended Oct 4.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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