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medium and long-term capital investment operations are highly specialized and stable, which is of great significance for overcoming short-term market fluctuations and playing the role of "stabilizer" and "ballast stone" in the capital market. on the 9th and 24th, wu qing, chairman of the china securities regulatory commission, stated at a press conference of the state council information office that the "guiding opinions on promoting medium- and long-term capital entry into the market" (hereinafter referred to as the "opinions") that will be released in the near future will include a series of support measures. the arrangements for the entry of medium and long-term funds into the market focus on the goal of "making more money, making money for a longer period of time, and providing better returns" to further promote the entry of medium- and long-term funds into the market.

the interviewed experts believe that it is particularly important to build a relatively complete, systematic and standardized investment system for long-term funds entering the market. the "opinions" will have a positive and far-reaching impact on the capital market, attract medium and long-term funds to invest in the value of the capital market, and improve the value of china's capital market. the scale and proportion of long-term capital investment will be optimized to optimize the investor structure of the capital market and lay a solid foundation for the smooth operation and healthy development of the capital market.

improving the institutional environment for “long-term money and long-term investment”

medium- and long-term funds play the role of "ballast" in the market, helping to reduce severe short-term market fluctuations, send positive signals, and enhance investor confidence.

in recent years, the china securities regulatory commission has vigorously promoted the development of equity public funds, worked with relevant parties to continue to promote the entry of medium and long-term funds into the market, and achieved some phased results. wu qing introduced that as of the end of august this year, the total circulating market value of a-shares held by equity public funds, insurance funds, various pension funds and other professional institutional investors was close to 15 trillion yuan, more than doubling from the beginning of 2019, accounting for the proportion of circulating market capitalization increased from 17% to 22.2%. since the establishment of the national social security fund, the average annualized return on investment in the domestic stock market has reached more than 10%, becoming a model of long-term investment and value investment in the a-share market.

however, it needs to be noted that the current problems of insufficient medium and long-term funds in the capital market, poor structure, and insufficient leadership are still prominent, and the institutional environment for "long-term money and long-term investment" has not yet been fully formed.

data disclosed by the state administration of financial supervision shows that as of the end of the first half of 2024, the balance of insurance company funds used was 30.87 trillion yuan, a year-on-year increase of 10.98%. in the past two years, insurance funds have accounted for approximately 12% of the allocation of stocks and funds, while the previous high was 13.76% in 2020. especially on december 9, 2020, in order to improve the long-term investment capability of insurance funds, the regulatory authorities set differentiated supervision ratios for the investment of insurance funds in equity assets, which can be up to 45% of the company's total assets. from this point of view, the stock investment ratio of most insurance companies still has a lot of room to fall short of the policy upper limit.

cao xiao, deputy dean and professor of the school of finance at shanghai university of finance and economics, pointed out to reporters that taking insurance funds as an example, the factors that affect its medium- and long-term financial value include but are not limited to strict investment scope restrictions, complex administrative approval processes, and restrictions on investment. proportional upper limit control, overly cautious attitude towards investment returns and risks, measurement standards and methods of investment performance, etc.

talking about how to further promote the entry of medium and long-term funds into the market in the future, wu qing said that the institutional environment for "long-term money and long-term investment" should be improved. the focus is to improve the inclusiveness of supervision on medium- and long-term capital equity investments and fully implement long-term assessments of more than three years. break through the institutional obstacles that affect the long-term investment of insurance funds, promote insurance institutions to become firm value investors, and provide stable long-term investment for the capital market.

zhao xijun, co-dean of the capital market research institute of renmin university of china, pointed out in an interview with a securities times reporter that it is particularly important to build a relatively complete, systematic and standardized long-term capital investment system. the "opinions" will have a positive and far-reaching impact on the capital market. , can attract medium and long-term funds to invest in value in the capital market, increase the scale and proportion of medium- and long-term capital investment, optimize the structure of capital market investors, and lay a solid foundation for the smooth operation and healthy development of the capital market.

as for promoting the entry of insurance funds into the market, cao xiao believes that this can be achieved by further relaxing the scope of investment, increasing the upper limit of investment proportions of major categories of assets, simplifying the approval process for insurance investment, introducing market-oriented mechanisms, and improving regulatory transparency and expectation management; at the same time, modify the current short-sighted performance measurement standards into longer-term comparative assessment standards to encourage long-term funds to pursue long-term returns.

overcoming institutional obstacles that affect long-term investment of insurance funds

guiding the positive interaction between the multi-level and multi-pillar pension security system and the capital market is also an important way to promote the entry of medium and long-term funds into the market. wu qing said that the national social security fund and basic pension insurance fund investment policy system will be improved, and corporate annuity funds will be encouraged to explore and carry out different types of differentiated investments based on the different ages and risk preferences of holders.

at present, due to factors such as capital security, the allocation scale of my country's pension funds in the capital market is still small. data from the ministry of human resources and social security show that as of the end of 2023, the scale of pension products was 2.29 trillion yuan, and the number of pension products in operation was 586, including 172 stock products, accounting for nearly 30%.

according to zhang ming, deputy director of the institute of finance of the chinese academy of social sciences, the entry of medium- and long-term funds represented by pension funds into the capital market is not only conducive to the long-term stable development of the capital market, but can also obtain investment income from it, which is conducive to its own value preservation. value added.

to promote the entry of pension funds into the market, preferential tax policies can play an important role. zhao xijun pointed out that my country can refer to the "401k plan" of the united states, attract individual investors through preferential tax policies such as tax deferral or tax exemption, and increase the entry of medium and long-term funds into the market.

when talking about how to encourage enterprise annuity funds to explore and carry out different types of differentiated investments based on the different ages and risk preferences of holders, cao xiao pointed out that overall, more detailed stratification of enterprise annuity holders is needed. different investment products are designed based on the holder's age, income level, risk preference and other factors. design differentiated investment products that meet these needs. for example, products with higher risk and higher return potential may be launched for the younger generation, while providing more robust investment options for employees approaching retirement age and dynamically adjusting investment strategies as age increases. .

cao xiao suggested providing personalized investment options, allowing participants to choose different investment portfolios based on their own risk preferences and investment goals. it also provides risk assessment tools to help holders understand their risk tolerance and provide investment advice accordingly. at the same time, policy support will be improved to encourage corporate annuity funds to make long-term and differentiated investments, while providing tax incentives and other incentives.

luo zhiheng, chief economist and director of the research institute of guangdong securities, also told reporters that long-term funds represented by annuities can be allowed to participate in non-public offerings in the market, and insurance institutions with strong risk control capabilities can be allowed to directly invest in private securities investment funds, etc. gradually increase the allocation proportion of long-term capital equity assets.