SSE Solicits Public Comments on Revision of the Trading Rules of Shanghai Stock Exchange

The Shanghai Stock Exchange (SSE) has released draft revisions to its trading rules for public consultation, focusing on adjustments to closing mechanisms and after-hours trading to improve execution efficiency and market consistency.

After-Hours Trading Scope Expanded

The proposed rules extend after-hours fixed-price trading beyond the STAR Market to include all A-shares and exchange-traded funds (ETFs). By allowing transactions at closing prices across a broader set of instruments, the change introduces additional execution flexibility and extends the functional trading window for institutional and long-term investors.

Unified Closing Auction for Funds

A key structural adjustment involves the closing auction mechanism for funds. Under the draft, fund products will shift from continuous trading during the closing period to a call auction-based price formation, aligning them with equities listed on the exchange.

This harmonisation is intended to:

• Strengthen price discovery at the close

• Reduce fragmentation between asset classes

• Improve execution consistency across portfolios involving both equities and ETFs

Adjustment to Risk-Warning Stock Limits

The draft also incorporates previously proposed changes to daily price limits for risk-warning stocks on the main board, increasing the limit from 5% to 10%. The adjustment reflects a recalibration of trading constraints, allowing greater price flexibility while maintaining regulatory oversight.

System-Level Refinements

Additional revisions focus on technical alignment and rule clarity, including updates to disciplinary provisions and terminology to ensure consistency with evolving market practices.

Toward More Coherent Closing Liquidity

Taken together, the proposals point to a targeted refinement of closing-period liquidity and price formation mechanisms. By standardising auction processes and expanding after-hours participation, the exchange is effectively tightening the linkage between execution timing and final pricing—an area increasingly relevant for passive funds and institutional allocation strategies.