The China Securities Regulatory Commission ( CSRC ) has unveiled a new policy to direct more long-term capital into the country’s domestic stock markets.

The policy announced on January 23 outlines several implementational plans designed to attract more patient capital from domestic institutional investors, including mutual, domestic insurance and pension funds, to be invested into the A-share market, thereby stabilizing and boosting its long-term performance.

The move is a follow-up to the guiding policy, announced in September last year, that states that China’s stock markets need more long-term capital.

In the new policy announcement, Wu Qing, the CSRC’s president, outlined the steps it has taken to deliver on its goal.

First, the regulator tells mutual fund companies to increase their shareholdings in the A-share market by at least 10% annually in the next three years. In addition, large cap state-owned insurance companies are told to use 30% of their annual new premiums to invest in A-shares from 2025 onwards, which is expected to bring hundreds of billions of yuan per year to the stock market.

Second, the CSRC plans to revise the performance reviewing method for insurance and annuity funds by encouraging them to lengthen their investment holding time. Previously, the performance of these funds was assessed using key performance indicators, such as return on assets on a yearly or three-year basis, which limits their willingness to hold equities for long-term periods. That myopic mindset, the regulator argues, needs to be adjusted for fund managers to achieve better results in the long-run.

Finally, the regulator adds that more cross-departmental efforts will be carried out on a continuous basis to keep the A-share market afloat.

Following the announcement, the Shanghai-based SSE Composite index on January 23 rose by 0.51% to 3230.16, reflecting a positive market sentiment in general.