Research On The Trading Mechanism Of Shanghai Stock Exchange 50ETF

Since the birth of the first ETF products in Toronto Stock Exchange (TSE) in 1990, ETF has developed rapidly as a totally new financial product. The United States, for example, the United States ETF assets of Fund has increased from 464 million US dollars to 422.484 billion US dollars since the end of 1993 to the end of 2006, representing a 910 fold up, while the number of unprecedented growth for the Fund 357. Our country has launched the first ETF product—Shanghai 50 ETF in the February 23, 2005. The share of Shanghai ETF amount to 3.11 billion copies Until March 23 in 2007, and also its share is the largest in the five largest domestic ETF.However, there still exist many problems in the transaction mechanisms of the Shanghai 50 ETF. Such as the negative effect to the arbitrage transaction of the Shanghai 50 ETF because of the suspension of the Shanghai 50 constituent stocks; the uncertainty brought in by the substitute of cash for the premium; the cash balance of Shanghai 50 ETF may bring the uncertainty to the arbitrage transaction to the extent that bring loss to the profiting transaction; the limitation of the transaction system in the registered company to the trade quantity makes the trade complicated; and so on.. The existence of these problems reduce arbitrage opportunities, limits the mobility of Shanghai 50 ETF, and also this affects their trading efficiency. In addition, the ETF lacks of the relevant market coordinated mechanism, futures market and short mechanism, and all these limit the active trading of ETF. Also the laws and regulations of China's securities market is not good enough and the lack of specific legal provisions, restraint and guidance related ETF. These are not conducive to this new financial products' healthy development in the future.This passage tries to analyze the problems of the Shanghai ETF such as the imperfect relevant laws, the lack of the supporting market measures, the irrational trading system and so on, trough these analyses we can address these issues and put forward some suggestions viable solution Methods.The full text is divided into four parts. Foreword topics introduced the base of the choosing subject, the status quo at home and abroad and this research ideas and research significance; The first part of the passage introduces the formation and development of the ETF; The second part introduces the formation and operation of ETF; The third part make evaluations to the Shanghai 50 ETF trading mechanism; Part IV presents measures to perfect The Shanghai 50 ETF trading mechanisms.