The reform of the GEM and the pilot registration system are another major change in the capital market in recent years after the Science and Technology Innovation Board. Many investors who have not previously opened the GEM authority are gearing up. With the change in the GEM opening authority, which means that it can be opened online, brokerages have already started the "GEM account opening war." Judging from what reporters from China Securities Journal learned, securities firms pay special attention to attracting customers through online channels.
Investors flock to GEM
After the announcement of the launch of the GEM reform, securities firms responded immediately. Guosen Securities stated that it formulated the business process and revised the risk disclosure document as soon as possible, and made business and technical preparations. On April 29, it launched the online self-service GEM function.
"After receiving the communication from the exchange on the evening of April 28, all departments spent the night interpreting and studying the new regulatory regulations, launched the 'Online Launch of GEM' project, and completed business plan formulation, system development and function launch within 24 hours." said a person from China Merchants Securities.
Previously, investors were required to go to the brokerage business department to sign the "GEM Market Investment Risk Disclosure Statement" to open the GEM authority. Although the single condition of "on-site signing" is not difficult, it still caused trouble for some investors. In order to cooperate with the reform of the GEM and pilot the registration system, the newly revised "Implementation Measures for the Management of Investor Suitability of the GEM of the Shenzhen Stock Exchange (Revised in 2020)" no longer requires on-site processing.
Against this background, coupled with good expectations for the reform of the GEM, investors are increasingly enthusiastic about opening the GEM. Liu Ming (pseudonym), head of the sales department of a small securities firm in Shenzhen, told a China Securities Journal reporter that after the announcement of the GEM reform, the number of investors requesting access to the GEM began to surge, and many investors called to inquire about related opening matters.
A relevant person from Ping An Securities said that Ping An Securities has launched the online GEM access function. So far, the number of new GEM customers has exceeded 10,000, and 15,000 existing customers have signed risk disclosure forms.
It should be noted that the threshold for opening GEM permissions has increased. Investors who open new accounts need to meet the entry threshold of average daily assets of 100,000 yuan in the first 20 trading days and 24 months of trading experience.
"Although the opening of GEM permissions this time is not as popular as the opening of the Science and Technology Innovation Board last year, and the threshold for opening GEM permissions has also been raised to a certain extent, it is still far lower than the 500,000 threshold of the Science and Technology Innovation Board, so GEM account opening is still quite popular." Liu Ming said.
Online becomes the main battlefield
The latest data from China Securities Depository and Clearing Co., Ltd. show that as of March 2020, there were more than 160 million A-share account investors (natural persons), and the number of investors with GEM authority was 46.7587 million. GEM account openings accounted for less than 30%. This means that securities firms still have a lot to do in attracting investors who open new accounts on the GEM.
Brokerages are actively attracting investors to open GEM access online. China Securities News reporters can see advertising pages on multiple brokerage apps to attract investors to open GEM online, and some even use them as opening ads for their own apps.
"This GEM reform requires a short response time, which poses a great challenge to securities companies. Although the control standards of all parties in the industry are different and there is no reference plan, Ping An Securities uses technological empowerment and relies on the suitability management center previously built based on self-research. Through relevant mature models, it can automatically identify customer signature types and control them in accordance with the strictest rules. At the same time, it has unified online entrances for various scenarios such as re-signing, new signing, and transfer of signatures, achieving full online and around-the-clock business processing, which greatly improves the customer experience." said a person from Ping An Securities.
China Merchants Securities said: “In terms of opening GEM accounts and acquiring customers, the sales department has always used a combination of offline and online methods. Currently, it is more focused on online methods to open GEM accounts and attract customers. Specifically, through the China Merchants Zhiyuan One-Account APP, it guides customers who meet the suitability requirements to open GEM by themselves.”
Strengthen investor education
The reform of the GEM is a major benefit to the capital market, but changes in related trading systems, such as no price limit on the price of new shares in the first five trading days after listing on the GEM, and then the price limit raised from the current 10% to 20%, have also increased investors' trading risks, and securities firms are currently stepping up their efforts to educate investors.
The aforementioned Ping An Securities relevant person pointed out that after the GEM reform was clarified, Ping An Securities stepped up preparations for the promotion of GEM account opening and investment education work, and timely updated content including GEM dynamic topics, GEM online account opening promotion pages, interpretation of the GEM registration system reform, investment education Q&A on risk disclosure, etc. "The rich investment education and promotion content allows investors to easily and conveniently understand the new regulations of the GEM, and open an account online with less worry and effort. At the same time, Ping An Securities continues to promote scientific investment concepts to customers, and provides customers with high-quality and professional investment consulting services with the help of scientific investment advisory products to enhance customer recognition."
China Merchants Securities stated that it will further strengthen investor education and guide existing GEM customers to open registration-based GEM rights. We will do a good job in investor publicity and education through the official account of the China Merchants Securities Investment Education Base; we will do a good job in promoting reform and investment education through the online investment education activities of the sales department; in the future, we will also do a good job in promoting and opening the GEM through online precision marketing.
Guosen Securities stated that it actively carried out GEM investor education work and immediately published GEM investment education articles on its official WeChat account to popularize the GEM registration system and introduce the permission opening process to investors, with nearly 90,000 reads.
