The Shenzhen and Shanghai stock exchanges have opened a consultation to tighten
LOF arrangements, proposing classified triggers and procedures for terminating
LOF listings. Under authorization of the Fund Law, the exchanges would
supplement the Fund Listing Rules to specify delisting cases, procedures,
risk‑disclosure requirements and institutional responsibilities, aimed at
addressing high‑premium on‑exchange speculation in LOFs. Market estimates
indicate roughly 125 LOFs could be affected, with combined on‑exchange AUM
around 26 bln yuan; about 91 are small‑scale LOFs with combined on‑exchange size
near 300 mln yuan, so the overall number and scale appear limited. Exchanges
note delisting does not equate to fund liquidation, will not alter normal
investment operations, and does not affect off-exchange holders’
subscription/redemption rights. On‑exchange holders can transfer to off‑exchange
custody during a transition or redeem/sell on‑exchange; after delisting holders
can still redeem via on‑ or off‑exchange distribution channels. The exchanges
say delisting will not involve funds net‑selling underlying equities and should
have limited direct impact on underlying markets.
