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Trading fees to be lowered for investors

By Hu Xiaocen (Shanghai Daily)

11:12, May 01, 2012

The China Securities Regulatory Commission is reducing fees for A-share trading by 25 percent in general to alleviate the burden on investors and to promote sustainable and healthy development of the capital market, the regulator said yesterday.

The handling fee of A-share trading has been reduced to 0.0087 percent of turnover at both the Shanghai and Shenzhen stock exchanges, down from Shanghai's previous 0.011 percent and Shenzhen's 0.0122 percent.

Meanwhile, companies will be charged for initial and annual listing fees in accordance with their equity scale, and companies listed on the Growth Enterprise Market will only be required to pay half the fees.

The new rules will take effect on June 1, and bring down the annual fees for A-share trading by about 30 million yuan (US$4.74 million), which will significantly reduce transaction costs and improve the fee structure, according to the statement on CSRC's website.

"The fee cut is not merely to stimulate the market," Ma Guangyuan, a research fellow at the venture capital research institute of Peking University, said yesterday. "Guo Shuqing, chairman of CSRC, set the keynote for the A-share market since he took the office, that is, to make the market a place for investment, from which the shareholders can get returns, rather than a place for speculation."

Prior to the announcement of the lower trading fees, the two mainland stock exchanges posted improved delisting rules to wipe out "trash stocks" to protect the interests of small investors, following CSRC's recent decision of a trading commission cut for all futures products by 30 percent on average, also effective on June 1.

"The purpose of lower fees, mandatory dividend payouts, improved delisting rules, distribution system reforms, and strengthened supervision is ultimately to protect investors and make returns to investors," Ma said.

An online survey to canvass public opinion was launched by Sina.com yesterday and by 11:28pm 75.2 percent of 50,316 participants thought the lowered fees would have a positive effect on the stock market, while the remainder said the effect would be limited. Some 44.3 percent treated the news as a sign of a bullish market, while 36.2 percent were unsure, and 19.4 percent did not agree.

Also yesterday, the China Securities Depository and Clearing Corp said in an online statement that it will lower the registration fee for A-share transactions in the Shanghai bourse from 0.05 percent to 0.0375 percent of the trading volume.

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