On January 14, the China Securities Regulatory Commission stated that the China Securities Regulatory Commission officially launched the reform of the payment of goods and banks (hereinafter referred to as DVP), and the proposed revision of the “DVP”.securitiesRegistration and Settlement Management Measures” to solicit public comments from the market, ChinasecuritiesRegistration and Clearing Co., Ltd. simultaneously solicited opinions on the “Settlement Rules” and “Management Measures for Settlement Reserve Funds”.
The China Securities Regulatory Commission said the reform will keep investors existingtransaction settlementThe system and habits remain basically unchanged and have no impact on the vast number of individual investors. The reform is conducive to enhancing the security of the settlement system from the system and further attracting overseas funds to enter the Chinese market. The reform will simultaneously reduce the minimum payment ratio of settlement reserves for settlement participants, which will help reduce the occupation of funds in the whole market and improve the efficiency of fund use.
Clarify default disposal arrangements
It is understood that DVP is a basic system generally adopted in the international market to ensuresecuritiesAfter the transaction is concluded, the vouchers will be fully settled.At present, my country’s securities market guarantees brokerage and securities transactions involving individual investors through systems such as third-party depository and pre-trade capital verification and securities verification.margin financingThe business has complied with the DVP system, and the settlement system is not perfect for the self-operated and custody business that only involves institutional investors.
One of the highlights of this reform is the establishment of the connection between securities settlement and fund settlement for the self-operated and custodial business, and to clarify the default disposal arrangements.
For many years, my country’s capital market has implemented the settlement model of “T-day securities transfer and T+1-day fund settlement”. T-day securities transfer is an unconditional transfer, and securities transfer and fund settlement are not linked. Under the premise of keeping the aforementioned settlement model basically unchanged, this reform establishes the connection between securities settlement and fund settlement by setting up logos for institutional self-operated and custody business.
Specifically, if the settlement participant has insufficient funds at the end of day T, ChinaClear will set the corresponding securities with the “sellable delivery lock” mark when handling the securities transfer, which means that the relevant securities are still in the process of settlement. During batch settlement, if the settlement participant has sufficient funds, the corresponding securities identification will be cancelled to complete the settlement; if the funds are still insufficient at the end of the day T+1, the corresponding securities will be dealt with by default.
“This move to link securities settlement and fund settlement by setting up signs has further improved the basic system of the capital market.” An industry insider commented.
No impact on individual investors
Industry insiders said that after the reform, the brokerage and margin financing and securities lending businesses will not be marked and will have no impact on individual investors.
At present, individual investors in my country’s capital market mainly participate in the brokerage business and the margin financing and securities lending business. These two types of businesses ensure that the securities are fully paid at the time of delivery through systems such as third-party custody, full margin, and pre-trade capital verification. achieve DVP effect. Therefore, the DVP reform does not set signs for brokerage business and margin financing and securities lending business, and has no impact on brokerage business customers including 190 million individual investors.
In addition, this reform maintains the existing transaction settlement habits and basically has no impact on institutional investors. The DVP reform has kept the settlement model of “T-day securities transfer, T+1-day fund settlement” basically unchanged, and established the relationship between securities settlement and fund settlement by setting up signs. Marked securities can still be sold on T+1 or used to declare various non-trading businesses. As long as settlement participants complete fund settlement on T+1 in a timely manner, all their businesses will not be affected.Therefore, this reform will include public offeringsfund, private equity funds and variousfinancial managementproduct manager,QFIIIt will not affect the existing trading habits and trading strategies of institutional investors, including RQFII managers and proprietary business of securities companies.
Lower settlement reserve
A reporter from China Securities News learned that as a supporting measure for the DVP reform, China Clearing has simultaneously reduced the settlement reserve fund, and set the minimum settlement reserve fund collection ratio in a differentiated manner according to the specific receipt and payment time of each settlement participant’s funds. The minimum charge rate for stock business was lowered from 18% to an average of about 15%.
According to industry insiders, this measure will help to encourage settlement participants and customers to complete the settlement of funds as soon as possible, and to a certain extent, it will also improve the capital utilization efficiency of market institutions such as securities companies and fund managers.
(Article source: China Securities Journal · China Securities Network)
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