On January 22, an implementation plan on promoting the entry of medium and long-term funds into the market was highly concerned by all parties in the capital market. Recently, with the approval of the Central Financial Committee, the Central Financial Office, the China Securities Regulatory Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, the People's Bank of China and the State Administration of Financial Supervision jointly issued the Implementation Plan on Promoting the Entry of Medium and Long term Funds into the Market, which defined many practical measures for the subsequent entry of medium and long-term funds into the market. What is medium and long-term funding? Simply put, it refers to funds with a relatively long investment period and a pursuit of long-term stable returns. For example, commercial insurance funds, national social security funds, basic pension insurance funds, enterprise (occupational) annuity funds, public funds, etc. are all typical medium - and long-term funds. If there is more short-term capital and less medium - to long-term capital in the stock market, there is a lack of stable force to hold stocks in the long term, and the market trend is prone to ups and downs. Industry insiders point out that there is still significant room for improvement in the proportion of institutional investors and medium - to long-term funds in the Chinese capital market. Due to their higher level of expertise and stronger stability, promoting the entry of medium and long-term funds into the market is beneficial for optimizing investor structure and promoting stable market development. For a long time, there has been a continuous call from all parties in the market to promote the sustained entry of medium - and long-term funds into the market. Looking at the timeline, prior to the release of this implementation plan, the financial sector had already provided significant policy support and guidance to address issues such as insufficient long-term funding, suboptimal structure, and insufficient leadership role. The new "National Nine Measures" released in April 2024 put forward many measures to promote the entry of medium and long-term funds into the market, including improving the basic system that adapts to long-term investment, and building a policy system that supports "long-term investment". In September 2024, the Central Financial Office and the China Securities Regulatory Commission jointly issued the "Guiding Opinions on Promoting the Entry of Medium - and Long Term Funds into the Market", proposing to build and cultivate a capital market ecosystem that encourages long-term investment; Vigorously develop equity public funds and support the steady development of private securities investment funds; Efforts will be made to improve the supporting policies and systems for the entry of various medium and long-term funds into the market. The focus of this implementation plan is to guide medium and long-term funds to further increase their entry into the market through mechanisms, and to upgrade the investment policies and long-term assessment mechanisms for the entry of medium and long-term funds into the market, further breaking through bottlenecks. Including increasing the proportion and stability of A-share investment of commercial insurance funds; Optimize the investment management mechanism of the national social security fund and basic pension insurance fund; Improve the market-oriented investment and operation level of enterprise (vocational) pension funds; Improve the scale and proportion of equity funds. For example, regarding the entry of insurance funds into the market that are of concern to all parties, the plan clearly aims to increase the proportion and stability of commercial insurance fund A-share investment. Large state-owned insurance companies will increase their A-share investment scale and actual proportion, which means that more funds from the insurance industry will enter the A-share market. The assessment cycle is also a key factor in promoting the entry of medium and long-term funds into the market. This plan emphasizes the comprehensive implementation of long-term performance evaluations of state-owned insurance companies for more than three years. This makes it easier for insurance companies to invest in the capital market. Shaping and forming a market ecology where medium and long-term funds are willing to come, able to stay, and develop well is the foundation and prerequisite for promoting the entry of medium and long-term funds into the market. For optimizing the investment ecology of the capital market, the plan also makes arrangements from guiding listed companies to increase their stock repurchase efforts and promoting the use of refinancing tools to increase their stock repurchase and holdings. Funds and expectations are crucial for the operation of the capital market. The release of the heavyweight plan for the entry of medium and long-term funds into the market will not only bring long-term stable incremental funds to the market, but also stabilize market expectations and help the capital market develop steadily. (New Society)