Recently, Shanghai Stock Exchange formulated the Three-year Action Plan for Index Business (2024-2026) (hereinafter referred to as the "Action Plan").

Index is an important resource of the financial market, acting as a "baton" for capital flow and a "stabilizer" for the market. Under the leadership of CSRC, Shanghai Stock Exchange has continuously optimized its index system, promoted the issuance of index products in recent years, and achieved certain results in serving national strategies, guiding medium- to long-term capital and promoting high-quality development. At present, the total number of main and derivative indexes in various series has exceeded 7,000, covering multiple asset categories including stocks, bonds, commodities, and funds. The index system covers more than 20 major countries and regions globally, centered around Shanghai, Shenzhen, and Hong Kong, with a tracking product scale of approximately 2.4 trillion yuan. Further enhancing the influence and competitiveness of local indexes, promoting the recognition and acceptance of index-based investment concepts by more investors, and guiding incremental funds to continuously flow into the market through index products are important measures for promoting high-quality development of capital markets and fostering the balance between investment and financing.

The Action Plan closely follows the deployment requirement of "accelerating investment-side reform" at the Central Financial Work Conference and the relevant requirements to promote index-based investment in the State Council's guideline on strengthening regulation, forestalling risks and promoting the high-quality development of the capital market. Streamlined by strengthening regulation, forestalling risks, and promoting high-quality development of the capital market, it aims to build an index-based investment market with a virtuous cycle of "listed companies — indexes — index products — investors" and serve the construction of a world-class exchange. The specific content can be summarized into the following three aspects.

i) Continuously enriching the index system that serves national strategies and the real economy: To Provide investors with more observing dimensions and investing targets, we will further enrich the broad-based indexes, indexes of technology finance, green finance, inclusive finance, pension finance and digital finance, "Shanghai Indexes" and cross-border indexes, which mainly includes continuously enriching the varieties of STAR Market indexes, compiling more industry balanced broad-based indexes, new quality productive forces themed indexes, ESG and green indexes, dividend indexes, bond indexes, etc., forming a multi-level index system that covers all aspects and highlights the core, and improving the characterization and investability of indexes.

ii) Improving the index-based investing ecosystem: Adhere to the concept of "people-oriented financial services", actively explore and include high-quality companies in the index, strengthen research and publicity, and promote the establishment of concepts of rational investment, value investment, and long-term investment. Enrich the categories of index funds and index derivatives, expand channels for participating in the index-based investment, improve the index-based investment ecosystem that is suitable for various investors including medium- to long-term investing institutions, and bring more fountainheads of imputing capital to the capital market.

iii) Gradually building an index risk management system: Adhere to the eternal theme of risk prevention and control in financial work, coordinate development and security, improve index management systems, mechanisms and procedures, enhance risk monitoring, analysis and disposal capabilities, effectively enhance the internal stability of the capital market, and boost the smooth and healthy development of the index business.

Before the announcement of the Action Plan, opinions have been solicited from the Shanghai Stock Exchange Index Expert Committee. In the next step, Shanghai Stock Exchange will work with relevant parties to implement it with greater forces and more practical measures, continue to explore the path to broader index business development, and jointly promote the index-based investment to reach new heights.