Home » The market maker business on the Science and Technology Innovation Board will be launched soon, and some approved securities companies will start to build positions one after another

The market maker business on the Science and Technology Innovation Board will be launched soon, and some approved securities companies will start to build positions one after another

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The market maker business on the Science and Technology Innovation Board will be launched soon, and some approved securities companies will start to build positions one after another

The market maker business of the Science and Technology Innovation Board will be launched soon. After the exchange is ready, the preparation work of the approved securities companies has also been completed or is in the final stage. The reporter from the “Economic Information Daily” learned that some approved securities companies have already selected the first batch of initial batches. Make market targets and start building positions one after another.

Recently, the Shanghai Stock Exchange (hereinafter referred to as the “SSE”) announced that the Shanghai Stock Exchange has completed all the preparatory work, and the market-making and trading business of stocks on the Science and Technology Innovation Board is ready to go online. As of October 14, 2022, 14 securities companies have obtained market-making and trading business qualifications for listed securities. At present, the approved securities firms are intensively preparing for the launch of the market-making business, and many securities firms are ready.

“On the whole, the preparations for the market-making business of our company’s science and technology innovation board are in the final stage, and all the work is ready and waiting for the official start of the business.” Wang David, the head of Guotai Junan’s market-making business, told the “Economic Information Daily” reporter. To meet the market-making business on the STAR Market, the company has done a lot of work on market-making personnel, market-making systems and risk management, and is fully prepared. “The company has preliminarily selected the first batch of market-making targets, and has prepared relevant filing materials, which can be submitted at any time in accordance with the requirements of the Shanghai Stock Exchange. Because, like ordinary investors, the stocks purchased by market makers on the Sci-Tech Innovation Board on the same day will not be processed until the next day. To sell, market makers need to build a market-making bottom position before they can start to provide buy and sell bilateral quotes for the underlying stock to provide liquidity for the market. The company’s market-making bottom position is also in the process of opening a position.”

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A relevant person from Caitong Securities told reporters that the company has made active preparations in terms of business organization structure, team building, system construction, and related systems. “The company has determined the scale of business authorization, and will adhere to a stable and positive business development attitude, attach importance to capacity building, and strive to build a competitive and large-scale market-making business team on the Sci-Tech Innovation Board in the industry within three years. The business scale will be based on The actual situation is gradually adjusted.”

“With the strong support of information technology, compliance risk control, finance and settlement, etc., the company’s market-making business headquarters has completed the preparations for the official launch of the market-making business on the Science and Technology Innovation Board, and the business process is ready. According to the requirements of the firm and the regulatory agency, the company will formally fulfill its obligations as a market maker.” Yang Xiaoyan, head of the market-making business headquarters of Galaxy Securities, told reporters that in order to ensure the smooth development of the business, the company has carried out organizational structure, personnel, system, risk control, authorization and system. comprehensive preparations, including the establishment of a sound institutional system, an independent first-level market-making business department, a decision-making authorization system with clear powers and responsibilities, a comprehensive risk management system throughout the entire process, a complete information isolation and compliance management system, independent and controllable market-making system and market-making strategy.

The market maker business brings both opportunities and challenges to securities companies. David Wang said that the market-making business poses new challenges to the personnel and system capabilities of securities companies. “We believe that the competition of securities firms in the market-making business will be conducive to the improvement of market liquidity, and investors will become the ultimate winners. By participating in the market-making business of the Science and Technology Innovation Board, the market-making and pricing capabilities of securities companies will also continue to improve. , and further align with the world‘s first-class investment banks.”

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Yang Xiaoyan said that in order to ensure the smooth and stable progress of market-making transactions, after the market-making transactions are launched, securities companies need to pay attention to comprehensive risk management and control to prevent market risks, liquidity risks and operational risks. and improve exposure hedging methods. On the basis of strictly adhering to the bottom line of risk control and compliance, prevent possible conflicts of interest and risks of interest transfer. In terms of technical systems, it is necessary to continuously optimize, improve quotation efficiency, optimize market-making strategies, and give full play to the professional role of securities firms as institutional investors in market stability and liquidity.

Caitong Securities stated that in terms of specific business development, the company will comprehensively consider its own investment and trading capabilities, trading system arrangements, and characteristics of companies listed on the Science and Technology Innovation Board in the selection of market-making targets, emphasizing the fundamentals of large industry space and outstanding company competitiveness. In terms of market-making trading strategies, the company will continue to evaluate optimization and new development with market conditions, and gradually explore sustainable business models that are in line with the domestic market environment and the company’s endowments.

The brokerage people interviewed said that the introduction of the market-making system for stocks on the STAR Market is of great significance, not only to improve market liquidity, but also to enhance market stability and stimulate the vitality of the STAR Market.

“The introduction of the market maker mechanism on the Science and Technology Innovation Board is one of the necessary links for the steady advancement of the registration system reform. It can achieve a ‘win-win’ for investors, listed companies and securities companies, which is of great significance to promoting the reform strategy of the domestic capital market.” China Merchants Securities Tang Shengqiao, managing director of the Derivative Investment Department, said.

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Yang Xiaoyan said that piloting the STAR Market and launching the market maker mechanism is a major optimization of the basic system of the STAR Market and an important supplement to the registration-based issuance system. On the one hand, it will improve the structure of market participants on the STAR Market, stimulate market vitality, and provide a strong guarantee for market liquidity while improving transaction efficiency; on the other hand, it will increase the width and depth of market orders, stabilize stock price fluctuations, and promote market prices. Return to the intrinsic value of enterprises, enhance market stability, enable long-term funds to better allocate stocks on the STAR Market, stimulate the market vitality of the STAR Market, and accumulate experience for the promotion of relevant systems after the comprehensive registration system is launched. By enhancing market liquidity to enhance the market’s ability to allocate resources, and to better leverage the market’s financing and price discovery functions, the company will promote the healthy development of the Sci-Tech Innovation Board.

Statement: Securities Times strives for true and accurate information. The content mentioned in the article is for reference only and does not constitute substantive investment advice. Operational risks are based on this.

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