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2.4 Optimization of capital market structure2.4 Optimization of capital market structure2.1 Increased market liquidity

Increase investment options: Incorporating index funds provides more investment options for individual pension investors, enriches the product line and meets the needs of investors with different risk preferences.Market scale growth: The inclusion of index funds is expected to attract more individual pensions to participate, thus increasing market scale and improving market liquidity.The expansion of individual pension system is an important step in the development of multi-level pension insurance system in China, aiming at meeting the challenges brought by the aging population. According to the latest policy, the personal pension system will be extended to the whole country on December 15th, 2024, and the first batch of 85 equity index funds will be included in the catalogue of personal pension investment products. The implementation background of this policy is mainly based on the following points:

The aging of the population is increasing: the proportion of people over 60 years old in China continues to increase, and it is expected to reach 29.9% by 2040, which poses great pressure on the existing old-age security system.Improve market efficiency: the transparency and low rate of index funds help to improve market efficiency, reduce transaction costs and increase investor participation.1.2 Impact of market expansion