China Securities Regulatory Commission’s “Three Arrows”: IPO tightening, standard reduction of holdings, and reduction of financing margin ratio have been implemented to activate the capital market and boost investor confidence. In addition to these measures, the stamp duty on securities transactions will be halved starting from today.
The reduction in stamp duty is seen as a timely move to improve investor confidence and reduce transaction costs in the capital market. Since the introduction of stamp duty in 1990, there have been seven reductions in the tax rate, with each adjustment having a significant impact on the market. While some argue that the reduction of stamp duty has little long-term impact on the market trend, the current reduction is expected to benefit investors by more than 100 billion yuan for the whole year.
The reduction in stamp duty is part of a larger effort by the Chinese government to boost the capital market. The China Securities Regulatory Commission has also implemented policies to tighten IPOs, standardize reductions in company holdings, and reduce the minimum margin ratio for securities purchases. These policies, when combined, are expected to bring about a rebound in the market and boost investor confidence.
Experts believe that the reduction in stamp duty, along with other policy measures, will improve market turnover and benefit investors in a tangible way. In 2022, the stamp duty on securities transactions accounted for 275.9 billion yuan in tax revenue. The halving of stamp duty this time is expected to benefit investors by more than 100 billion yuan for the whole year.
Overall, the reduction in stamp duty, along with other policy measures, is seen as a positive step towards activating the capital market and enhancing investor confidence. It is expected to bring about a rebound in the market and benefit investors in the long run.