Amid the "May·15 National Investor Protection Awareness Day" in 2024, the Shanghai Stock Exchange (SSE) updated the 2022 Initiative on Value Investment and Long-term Investment in Capital Market. The revised document, now titled the Proposal for Rational Investment, Value Investment, and Long-term Investment in the Capital Market (hereinafter referred to as the "Proposal"), invites institutions to co-sign it and calls on more market institutions to jointly implement the concepts of rational investment, value investment, and long-term investment. Up to now, the Proposal has received positive responses from all market participants and sectors of society, with a total of 315 institutions co-signing it.

The Proposal was issued to practice the important spirit of "promoting the entry of medium- and long-term funds into the market, and establishing the concepts of rational investment, value investment, and long-term investment" proposed at the Central Financial Work Conference, and to implement the work arrangements of "vigorously promoting the entry of medium- and long-term capital into the market and continuously expanding the long-term investment force" outlined in the Several Opinions of the State Council on Strengthening Regulation, Preventing Risks and Promoting the High-Quality Development of the Capital Market (known as the new State Council Nine-Point Guideline). The main body of the Proposal consists of ten articles. It outlines for investors and asset management institutions the "four adheres", "three should-dos" and "three actively-dos" from three dimensions: investment philosophy, institutions' conduct, and market environment.

During the co-signing invitation of the Proposal, the number of institution applicants far exceeded expectations, encompassing more than 300 institutions involved in investment and research. These include bank wealth management subsidiaries, elderly care institutions, insurance companies, securities firms, asset management companies of securities firms, public fund management companies, private fund management companies, fund sales companies, data service providers, universities, and research institutes.

The SSE has completed the relevant review procedures and officially released the list of co-signing institutions (see Appendix for details). The list of institutions comprises 104 securities firms, 11 asset management companies of securities firms, 88 public fund management companies, 11 bank wealth management subsidiaries, nine elderly care institutions and insurance companies, 59 private fund management companies (including privately offered securities investment fund and private equity investment fund management companies), 24 universities and research institutes, seven other compliance agencies, and the National Council for Social Security Fund. In general, the co-signing institutions are highly representative, spanning a wide range and exerting significant market influence. This enhances the Proposal's potential to play a demonstration and leading role.

In the future, the SSE will continuously track and evaluate co-signing institutions' implementation of the Proposal, establish a dynamic adjustment mechanism for participating institutions, and regularly update the list of co-signing institutions each year based on their implementation effects of the spirit of the Proposal, achieving institutions' orderly participation in or withdrawal from the initiative.

Following the guidance and practices proposed in the Proposal, the SSE will collaborate with the above-mentioned institutions to lead all market participants and sectors of society to jointly adhere to and continuously practice the concepts of rational investment, value investment, and long-term investment, thus contributing to the high-quality development of China's capital market.

Proposal for Rational Investment, Value Investment, and Long-term Investment in the Capital Market

(Issued on May 15, 2022 and revised on May 15, 2024)

To investors and asset management institutions:

To further guide the establishment of the concepts of rational investment, value investment, and long-term investment in the whole market, to give full play to the active role of institutional investors in maintaining market stability, serving national strategies, and promoting common prosperity, and to enhance the sense of security, fulfillment, and happiness among small and medium-sized investors in securities investment, we hereby jointly present the following ten-point proposal.

I. Adhere to the concept of value investment, attach importance to fundamental analysis, conduct rational and compliant transactions, and avoid blindly following trends or speculating.

II. Adhere to the concept of long-term investment, view market fluctuations rationally, and avoid excessive trading due to short-term ups and downs.

III. Adhere to the concept of green investment and responsible investment, actively fulfill social responsibilities, and proactively serve major national development strategies.

IV. Adhere to the correct concept of investment and performance, establish a long-term assessment mechanism, and avoid one-sided pursuit of short-term ranking of performance or scale.

V. Asset management institutions should consciously abide by investment contracts, align with performance benchmarks, and maintain a stable style.

VI. Asset management institutions should actively improve their capabilities of investment research, and develop more products suitable for value investment and long-term investment to meet the needs of investors.

VII. Asset management institutions should focus on the interests of clients, properly guide investors' subscription and redemption operations, and strengthen their acceptance of value investment and long-term investment.

VIII. Actively bring the role of professional investors into full play, promote the improvement of the listed companies' governance, and guide listed companies in rewarding shareholders in various forms such as dividends and share repurchases.

IX. Actively give play to the leading and demonstration effect of evaluation and its guiding role for public opinions, and boost the transformation of the investment style of the whole market to value investment and long-term investment.

X. Actively carry out investor education, and guide the whole market in establishing the concept of rational investment and the reasonable expectation for investment returns.

Let us jointly continue to uphold the concepts of rational investment, value investment, and long-term investment, and contribute to the promotion of high-quality development of China's capital market!