August 8, 2026 (InvestinChina.asia) — The Shanghai and Shenzhen stock exchanges on August 7 published for public comment a set of rules that would, for the first time, force listed open-ended funds (LOFs) into a structured delisting path, targeting commodity-futures LOFs, QDII LOFs and small-scale LOFs whose on-exchange net asset value stays below 10 million yuan for 60 straight sessions. Commodity-futures and QDII LOFs must wind down their listings by December 31, 2027, while small-scale LOFs face immediate delisting once the threshold is breached after the rules take effect.
The draft notices, open for feedback until August 22, amend the exchanges’ fund-listing rules under authorization of the Securities Investment Fund Law. They borrow from the logic of mandatory stock delisting: when a fund’s structural design makes its secondary-market price systematically detach from NAV, the listing itself becomes a speculative vehicle rather than a liquidity tool. Industry estimates cited by Caixin and China Fund News suggest roughly 125 LOFs—about 91 of them small-scale—with combined on-exchange assets of around 26 billion yuan could be affected, though the small-fund slice is only about 300 million yuan.
Under the proposal, commodity-futures LOFs and QDII LOFs are deemed to carry inherent supply constraints: futures position limits, exchange opening caps and scarce QDII foreign-exchange quotas can force managers to suspend or cap subscriptions, starving the on-exchange market of new units and letting prices trade at persistent premiums to NAV. To avoid a disorderly exit during a high-premium window, the exchanges grant these two categories a transition period of more than one year. Managers must file delisting documents no later than November 12, 2027, and trading ends by December 31, 2027. From the effective date, their on-screen short names will carry an asterisk prefix “*” as a standing warning.
Small-scale LOFs get no grace period. If a fund’s daily on-exchange NAV prints below 10 million yuan for 40 consecutive sessions, the manager must start publishing daily risk warnings from the next trading day until the condition clears or delisting triggers. If the sub-10-million print persists for 60 sessions, the fund halts trading the next day, the manager files delisting papers within two sessions, and the exchange decides within 10 trading days. Small-scale funds exit the board within five trading days of the decision; commodity and QDII LOFs must instead run 20 consecutive days of delisting disclosures before their final session.
Brokerages are told to put flagged LOFs on a watch list and push reminders through websites, trading terminals and quote feeds. Managers must remind holders they can redeem, sell on-exchange or move units off-board via cross-system transfer before and after delisting. Crucially, termination of listing is not liquidation: the underlying portfolio keeps running, off-exchange holders redeem normally, and no forced selling of stocks or bonds is triggered. The exchanges frame the reform as curbing premium-chasing retail flows and freeing board capacity for higher-quality ETF and LOF issuance.
Analysts note the rules land as a cleanup of a product structure dating to 2004. LOFs were meant to blend off-exchange subscription/redemption with on-exchange trading, but in thin QDII and futures sleeves the arbitrage that should kill premiums has been mechanically blocked. By setting a hard 10-million-yuan on-exchange NAV floor over 60 days, the bourses effectively tell managers to either scale up, merge, or go private. For investors still holding QDII LOFs at double-digit premiums, the message is blunt: a 2027 delisting means the only exit left is NAV-based redemption, and the premium evaporates regardless of fundamentals.