On October 26, the Shanghai Composite Index, such as the Shanghai Composite Index and the Science and Innovation Composite Index, began implementing revised preparation plans, and the investment and operation of related index funds also ushered in new management requirements. According to an announcement previously issued by the Shanghai Stock Exchange and China Securities Index Co., Ltd., this revision involves the Shanghai Composite Index, the Shanghai Securities A-share Index, the Shanghai Stock Exchange Circulation Index, the Science and Technology Innovation Composite Index and related derivative indices. It mainly includes increasing the limit of no more than 15% weight for a single sample, and adjusting the exclusion time for risk-warning securities. Industry insiders believe that this revision will help improve the index risk management mechanism and optimize the indexed investment ecosystem. For relevant index funds, the implementation of the new plan does not mean that centralized position adjustments are necessary, but more attention needs to be paid to changes in component equity weights and index adjustment arrangements. “This revision adds a rule that the weight of a single sample does not exceed 15%. The aim is to prevent excessive concentration of individual component shares and further improve the index risk distribution mechanism.” Yang Delong, chief economist and fund manager of the Qianhai Open Source Fund, told reporters. According to the revised preparation plan, the relevant index controls the weight of a single sample by setting a weighting factor so that it does not exceed 15%. The weight factor is adjusted on the next trading day of the second Friday of each month or when the newly included sample weight exceeds 15%.

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