On April 7, the China Securities Regulatory Commission (CSRC) officially implemented the Several Provisions on the Regulation of Short-Term Trading, marking an important institutional reform for the A-share market.

The new rules comprehensively regulate short-term trading while clarifying 13 types of exemptions, focusing on easing restrictions for long-term capital including social security funds, pensions, insurance capital, and public funds, thus removing institutional barriers to entry.

The core highlights are full regulatory coverage and targeted exemptions. Supervision now covers all equity securities, including stocks, convertible bonds, exchangeable bonds, and depositary receipts.

Major shareholders with more than 5% holdings, directors, supervisors, senior executives, and their close relatives are all included to curb insider trading and short-term arbitrage. Exemptions apply to 13 scenarios such as ETF subscriptions and redemptions, convertible bond conversions, equity incentive exercises, and market-making activities.

Crucially, long-term capital calculates holdings separately by product, greatly reducing compliance costs and encouraging long-term holding and value investing.

Market analysts noted the far-reaching significance of the new rules. In the short term, strict supervision on speculation will curb theme-driven hype and accelerate a shift toward value investing.

In the long run, removing barriers for trillions in long-term capital will bring steady incremental funds to the A-share market, improve investor structure, and push the market from a speculative orientation to a value-driven one.

Although the market fell sharply on the day due to multiple factors, the long-term benefits are clear. High-dividend, blue-chip, and core assets will become more attractive to long-term capital, gradually optimizing the market ecosystem.