Open source securities: Full closure operation of Hainan Island, with vast cross-border asset management space.

Open Source Securities' research report stated that Hainan Free Trade Port is a new highland of institutional opening in China, with tax benefits, investment convenience, and trade facilitation expected to continue to attract domestic and foreign funds, global enterprises, and talents to gather. With the continuous development of the free trade port, the demand for company and resident financial management will continue to rise. The start of the US dollar interest rate reduction cycle opens up the possibility of enhanced attractiveness of RMB assets, and the pilot program for cross-border asset management is expected to bring about a good opportunity for development, with a vast market space. According to the "Implementation Rules", financial institutions registered in Hainan Free Trade Port with the qualifications to issue asset management products can apply for pilot issuance. In this context, the demand for brokerage cross-border derivatives and financial management services is expected to gradually release, and the bank is optimistic about top brokerage firms with outstanding international business capabilities. The main points of Open Source Securities are as follows: Building a high-level free trade port to create a new highland of institutional opening. (1) Benchmarking high-standard economic and trade rules, "taking three steps" to promote the construction of the free trade port. Against the background of economic structural transformation and increased uncertainty in the global economic environment, China has proposed to accelerate the construction of a high-level China-specific free trade port. The free trade port benchmarks international high-standard economic and trade rules, focusing on trade and investment liberalization and facilitation, and promotes the construction of the free trade port in three stages to fully establish a high-level free trade port with international influence by the middle of this century. (2) Gradually building a system centered on "five freedoms and one orderly flow". With the goals of free flow of factors, free trade and investment, optimized tax system, and improved legal protection, Hainan Free Trade Port continues to advance institutional innovation in personnel exchanges, goods circulation, and cross-border fund flows, supplemented by market access relaxation, "double 15%" tax incentives, and special legislative protection. On December 18, 2025, the island-wide closure operation was officially launched, and institutional advantages entered the concentrated landing stage. (3) Perfecting financial infrastructure to serve the real economy. The EF account provides efficient and convenient fund transfers, exchanges, and other services to enterprises. In addition, the financial field also includes several innovative institutional arrangements such as QDLP, QFLP, and the cross-border asset management pilot program. Account simplification, convenient fund transfer, and differentiated advantages highlight advantages, and the pilot is expected to be bidirectional. (1) The cross-border asset management pilot program refers to overseas investors investing in financial institutions in the Hainan Free Trade Port to issue financial products such as wealth management products, securities, fund futures operating agency private equity asset management products, publicly offered securities investment funds, and insurance asset management products. (2) Advantages comparison: The cross-border asset management pilot program has advantages in terms of investor scope, investment product types, and fund exchange convenience. The bank believes that the pilot program is similar to QFII, but the pilot program simplifies the account opening process compared to QFII, making it more suitable for overseas funds to invest in and manage their finances in the Hainan Free Trade Port on a daily basis; the pilot program has significant advantages for non-financial enterprises and individual investors in the free trade port. (3) Significance: The cross-border asset management pilot program meets the needs of overseas and free trade port investors for convenient investment and financial management, fills the traditional channels gap for the return of offshore Renminbi, and helps to enhance the internationalization of the Renminbi and build an internationally first-class financial center. (4) Outlook: The cap on the quota is expected to be lifted, and the pilot program is on par with international standards. At the initial stage of the pilot, a total quota of 10 billion yuan was implemented. Currently, four pilot issuing institutions have completed 5 billion yuan in record filing and implemented the first batch of funds, with cash and fixed income products expected to be the main products. Referring to the development processes of QFII and the cross-border wealth management connect, as the system matures and the product lineup improves, the quota for the pilot program is expected to be lifted, and the participants are expected to be bidirectional, attracting global asset management institutions to gather in the Hainan Free Trade Port and promote the construction of an international financial center. (5) Development institutions: Quickly improve the product lineup, innovate products from the perspectives of meeting the needs of overseas investors and having the characteristics of Hainan Free Trade Port; actively layout local bank channels in Hainan, build direct sales channels, cooperate extensively with local banks and intermediaries, attract overseas institutions and individual clients, and make good use of the first-mover advantage; leverage shareholder resources to explore the funds and financial management or return needs of overseas entities with qualifications in mainland China and Hong Kong; attract talents with international business experience, reserve business expansion capabilities; build an international asset management product investment chart and research system, and be familiar with international regulatory compliance requirements. Risk warning: Policy uncertainty risk; Market volatility risk; Market demand not meeting expectations.