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the research business of securities firms is facing the impact of the public offering fee reform.

as the public fund semi-annual report disclosure season comes to an end, the securities firms’ report card on sub-account commission income in the first half of 2024 is released.

data shows that in the first half of 2024, brokerage commission income was 6.774 billion yuan, down about 30% year-on-year. the commission income of most brokerages has declined, and the commission income of the top brokerages has generally declined by more than 20%. only a few brokerages have achieved year-on-year growth.

under the background of the new regulations on public offering commissions, the disturbance of fund sales has been gradually eliminated, the research strength of securities firms has been revealed, and the ranking of sub-account commissions has also changed. the top five securities firms in terms of sub-account commission income in the first half of 2024 are: citic securities, gf securities, citic construction investment, changjiang securities, and guotai junan securities.

among the brokerage firms with commissions exceeding 100 million yuan, minsheng securities is the only brokerage firm to achieve growth against the trend, entering the top ten with commission income of 201 million yuan, and ranking 9th, up 8 places from the 2023 annual report. however, oriental fortune securities, which had strong fund sales capabilities in the past, declined more, down nearly 77%, and its ranking slipped from the top 20 to 35th.

"the first half of the year was the last stage for clearing the historical undersupply before the reform of public fund commissions was implemented, so the brokerage rankings also changed significantly in the first half of the year." a senior researcher told china securities journal, "after the new regulations are implemented in the second half of the year, research will become the only outlet for fund companies to distribute commissions, and they will focus more on the real value of research."

the total market has shrunk by 30%, and the impact of the public offering commission rate reform is obvious

wind data shows that the commission data of the research business of about 98 brokerages has been officially released, with a total commission income of 6.774 billion yuan, a decrease of about 30% compared with the total commission income of 9.735 billion yuan in the first half of last year. a total of 27 brokerages have commission income of more than 100 million yuan, and the industry concentration is relatively high. these 27 brokerages have commission income of 5.415 billion yuan, accounting for 80% of the total commission income.

the commission income of the leading brokerage firms has declined significantly, but they still maintain their leading advantage. the top five brokerage firms in terms of commission income for the first half of 2024 are: citic securities, gf securities, citic construction investment, changjiang securities, and guotai junan securities. compared with the ranking of commission income for the whole year of 2023, guotai junan securities has moved up one place to 5th place, thanks to its efforts in comprehensive customer management, while china merchants securities has fallen out of the top 5.

specifically, the "no. 1 brokerage firm" citic securities ranked first with a commission income of 501 million yuan, but the scale also decreased by about 26% year-on-year; gf securities ranked second with a commission income of 387 million yuan, a year-on-year decrease of nearly 19%; citic construction investment, changjiang securities and guotai junan securities had commission income of 350 million yuan, 330 million yuan and 278 million yuan respectively in the first half of this year, and the decline was also more than 26%.

a few brokerage firms' commission income grew against the market trend

it is worth mentioning that amidst the backdrop of declining commission income for most brokerage firms, there are still some brokerage firms that are growing against the market trend.

among the 27 securities firms with commission scale exceeding 100 million yuan, only minsheng securities achieved positive growth, while the commission income of the other 26 securities firms all declined.

china securities journal reporters learned that minsheng securities research institute has developed rapidly in the past three years, quickly ranking among the top ten from the middle and lower reaches of the industry, surpassing many old brokerage research institutes. judging from the data, the income from sub-warehouses has rapidly increased from 57 million yuan in 2021 to 366 million yuan in 2023, and the market share has increased from 0.26% to 2.18%, and the industry ranking has jumped from 49th to 17th. in the first half of 2024, minsheng securities went against the trend during the turning point of the new commission regulations, with sub-warehouse commission income of 201 million yuan, a counter-trend growth of more than 4%, and the industry ranking jumped to 9th in one fell swoop, with a market share of 2.96%, far ahead of a number of new brokerages in the same period.

from the research team's perspective, the director of the minsheng securities research institute is new fortune platinum analyst hu youwen. in the first half of this year, with the addition of tao chuan, the chief economist of the research institute, and other teams, minsheng securities' 26 research teams have formed a stable structure, covering industry research in an all-round way, and leading in the fields of artificial intelligence, tmt, metals, energy, automobiles, strategy, etc. in addition, minsheng securities also has the industry's first artificial intelligence research institute and has established an artificial intelligence industry advisory committee.

compared with the ranking of commission income for the whole year of 2023, guosen securities also rose rapidly in the ranking, with commission income of 148 million yuan in the first half of the year, and its ranking rose by 7 places to 18th. founder securities rose by 5 places to 19th in the industry. zheshang securities and soochow securities both moved up 3 places, ranking 12th and 13th respectively.

among the securities firms whose sub-account commission scale was less than 100 million yuan in the first half of the year, some achieved positive growth on the basis of a low base.

wind data shows that brokerage firms with commission income of more than 10 million yuan that increased include: guorong securities (commission income of 15.31 million yuan), zhongyou securities (18.05 million yuan), guolian securities (75.77 million yuan), huaxin securities (16.12 million yuan), and shanxi securities (35.84 million yuan). among them, guorong securities increased by 181% year-on-year.

among them, it is worth mentioning guolian securities. xu chun, the former director of the changjiang securities research institute, announced in september 2023 that he would join guolian securities as the director of the research institute. later, xu chun was promoted to vice president of guolian securities. in 2022, china post securities also welcomed the joining of huang fusheng, the former dean of the pacific securities research institute.

among the changes in commission income in the first half of this year, the commission income of small and medium-sized securities companies has changed significantly. among securities companies with commission income of more than 10 million yuan, the commission income of dongfang fortune securities and dongxing securities fell by more than 60% in the first half of the year. hualong securities, guoyuan securities, and yuekai securities fell from more than 10 million yuan in the first half of 2023 to less than 10 million yuan.

among them, east fortune securities is a brokerage firm with strong sales channels and relatively weak research capabilities, and it faces a direct impact under the commission reform. in the first half of the year, east fortune securities received commissions of 50.54 million yuan, a year-on-year decline of 76.67%, ranking 35th in the industry, down 16 places compared with the whole year of 2023. in the same period last year, east fortune securities still had commissions of 217 million yuan, ranking 16th in the industry.

the reform of reducing transaction commissions has gained momentum, and the research strength has been demonstrated

"the first half of the year was the last hurdle in clearing up historical shortfalls before the implementation of the public fund commission reform, and therefore there were significant changes in the brokerage firm rankings in the first half of the year." a senior researcher told securities china reporters.

looking back at the first half of the year, the reform of reducing transaction commissions for public funds is the main theme running through the entire industry, and the business model of securities firms of "fund sales in exchange for transaction commissions" for many years is undergoing fundamental changes.

in december 2023, the csrc formulated the "regulations on strengthening the administration of securities trading of publicly offered securities investment funds (draft for comments)", marking the official launch of the second phase of fee rate reform in the public fund industry. on april 19 this year, the csrc formulated and issued the "regulations on the administration of securities trading fees for publicly offered securities investment funds" (hereinafter referred to as the "regulations"), which will be officially implemented from july 1, 2024.

according to the regulations and the notice issued by the china securities investment fund association on april 30 this year, after the reduction, the transaction commission rate of passive equity fund products shall not exceed 2.62 per thousand; other types shall not exceed 5.24 per thousand.

at the same time, the "regulations" strictly prohibit fund managers from linking the selection of securities companies, leasing of trading units, distribution of trading commissions, etc. with the scale of fund sales and holdings, and strictly prohibit making any form of promises to securities companies about fund securities trading volume and commissions or using trading commissions to exchange interests with securities companies.

for a long time, the trading commissions paid by public funds to brokerage firms, in addition to research commissions (commonly known as "points"), also include a portion of "market commissions" for fund agency sales. with the entry into force of the new regulations, trading commissions can only be used to allocate research services, and brokerage research institutes have become the only legal entry point for trading commissions. securities china reporters previously learned that just before the implementation of the new commission regulations on july 1 this year, brokerage research institutes were busy re-signing stock trading commission rate agreements with fund companies and other clients to implement new commission rate standards and standardize the use of commissions.

the aforementioned senior researcher said, "after the new regulations are implemented in the second half of the year, research will become the only outlet for fund companies to distribute commissions, and they will focus more on the true value of research. securities companies will also pay more attention to the improvement of research capabilities, increase research investment, further improve investment research capabilities and sales service capabilities, and maintain market share."

china securities journal reporters noticed that many securities research institutes are undergoing transformation recently, actively recruiting talents and consolidating their research capabilities.

for example, in the first half of this year, shenwan hongyuan went against the trend and vigorously introduced the team of chief economist zhao wei to make early preparations.

in mid-august this year, meng jie, former deputy director of industrial securities research institute, joined eastmoney as director of eastmoney securities research institute. it is understood that meng jie will promote the "2.0 launch" of the institute. the development goal of the institute he proposed is that eastmoney will rely on technology empowerment to research and explore listed companies that embody new quality productivity and build a sell-side research institute with eastmoney characteristics.

changjiang securities stated in its semi-annual report that the "regulations on the administration of securities trading fees for publicly offered securities investment funds" was officially implemented on july 1, which is expected to have a certain impact on the scale and structure of commission income in the short term, but will promote the return of research business to its roots in the medium and long term. in the second half of 2024, with the reform of public offering commissions and other capital market reform measures, the securities research business is gradually moving from scale expansion to high-quality development.