Listed open-ended funds (LOFs) are facing their first comprehensive regulatory overhaul in 22 years. On August 7, the Shanghai and Shenzhen stock exchanges jointly issued a public consultation on delisting rules for LOFs, clearly defining three categories of products that must terminate their listings. Based on the latest data, over 100 products are affected, accounting for more than a quarter of all LOFs on the market, with a combined on-exchange scale exceeding 250 billion yuan.
According to Wind data, as of August 7, there were 404 LOFs (counting only initial funds) across the entire market, with a total on-exchange scale of about 54.9 billion yuan. By product type, passive index funds and equity-oriented hybrid funds lead in numbers, with 122 and 87 respectively; flexible allocation funds total 73, and one-tier hybrid bond funds reach 35. Under the new delisting rules, three categories of LOF products will face termination of listing.
The first category includes commodity futures LOFs and QDII LOFs, which must complete their delisting by the end of 2027. Currently, the only commodity futures LOF is the 白银基金 (161226.SZ), managed by Zhao Jian of UBS SDIC Fund, with a second-quarter-end scale of 10.06 billion yuan and an on-exchange scale of 6.282 billion yuan as of August 7. There are 33 QDII LOFs, involving 18 fund companies such as E Fund, Hwabao, Harvest, China Southern, Fullgoal, and Dacheng, with E Fund leading at 9, and Hwabao, Harvest, and China Southern each having 3. The top three products by scale are the Bank of Communications Schroders China Internet LOF (5.585 billion yuan), the E Fund S&P Information Technology LOF (4.268 billion yuan), and the Hwabao Overseas Technology LOF (2.421 billion yuan), all of which will exit on-exchange trading.
It is worth noting that due to portfolio structure constraints and insufficient liquidity, these LOF products are prone to becoming targets for arbitrage capital, leading to abnormally high prices, and investors who blindly chase them may find themselves trapped at high levels. This year, high-premium phenomena such as those seen in the 白银基金 have been frequent, drawing close attention from regulators and the market. Data show that as of August 9, since the beginning of August alone, products like the Global Chip LOF and the China Southern Crude Oil LOF have issued multiple premium risk warnings, with some funds having issued such warnings up to 10 times and having been temporarily suspended from trading multiple times during the day.
The second category consists of LOFs whose net asset value on the exchange falls below 10 million yuan for 60 consecutive trading days, which should be delisted. Based on rough calculations using August 7 data, approximately 111 products hit this threshold (excluding duplicate QDII LOFs), of which 15 have less than 1 million yuan, 38 have less than 2 million yuan, and 71 have less than 5 million yuan. The smallest product, the 信诚深度 (165508.SZ), has an on-exchange scale of only 396,400 yuan, far below the delisting red line.
It is important to emphasize that delisting does not equal fund liquidation; most products will continue to exist in off-exchange shares. Industry insiders point out that the on-exchange scale of the proposed delisting products is generally limited and is not expected to cause a significant market impact. However, this move will thoroughly clean out small-scale, illiquid, and easily manipulated micro-LOF products, helping to improve the overall pricing efficiency of remaining LOFs. For fund companies, this means accelerating the cleanup of existing problematic products while actively adjusting operational strategies to allocate more resources toward improving product performance and liquidity. The past practice of relying on issuing small-scale LOFs to capture short-term hot spots will be difficult to replicate.