On November 28, the first batch of seven CSI Science and Technology Innovation Board AI ETFs (referred to as Dual-Innovation AI ETFs) will begin issuance. Reports indicate significant differences in fundraising caps among the seven products, ranging from 1 billion to 8 billion units, forming three distinct tiers.

All seven Dual-Innovation AI ETFs have adopted the brokerage settlement (券结) model. Notably, alongside major brokers with strong distribution capabilities, mid-sized and smaller brokers such as Huaxin Securities have also appeared as settlement partners. This shift reflects both pragmatic choices by fund houses under new fee regulations and the intensifying competition in ETF issuance.

**All Seven Funds Adopt Brokerage Settlement Model** The first batch of Dual-Innovation AI ETFs was swiftly approved and will officially launch this Friday. Fundraising caps reveal a three-tier structure, highlighting varying strategic assessments of market reception. Yongying Fund’s product has the shortest issuance period at just three days, with a cap of 1 billion units. Huatai-PineBridge’s ETF has a 5 billion unit cap and a one-week issuance window, while Penghua Fund’s offering is capped at 2 billion units. E Fund, Invesco Great Wall, and JPMorgan have set higher caps of 8 billion units each.

The issuance pace is closely tied to sales strategies and market conditions. All seven ETFs have opted for the brokerage settlement model.

Seven different brokers are handling settlement for these ETFs: Changjiang Securities, Industrial Securities, and China Galaxy Securities are serving Penghua Fund, JPMorgan, and ICBC Credit Suisse, respectively. Guosen Securities, Shenwan Hongyuan, Financial Street Securities, and Huaxin Securities are partnering with E Fund, Invesco Great Wall, Yongying, and Huatai-PineBridge.

For custody services, three AI ETFs—from Penghua Fund, ICBC Credit Suisse, and Invesco Great Wall—have selected brokers (Great Wall Securities, GF Securities, and CITIC Securities). The remaining four are custodied by banks, with Industrial Bank handling two ETFs from JPMorgan and Yongying.

“As mutual fund fee reforms progress, the cost-effectiveness of brokerage settlement increasingly depends on actual sales resources committed by brokers. Meanwhile, custody fees, being fixed and transparent, are more competitive,” noted a wealth management professional in Shenzhen.

**Emergence of Mid-Small Brokers** A notable development is Huatai-PineBridge and Yongying’s selection of Huaxin Securities and Financial Street Securities—both relatively smaller brokers—as settlement partners, diverging from the dominance of large or regional leaders.

“In hotly contested ETF segments, major players dominate, but niche or emerging areas present different dynamics. Partner choices reflect fund houses’ strategic positioning,” commented a Shanghai-based wealth management expert.

The expert added that some mid-small brokers and their allies demonstrate unique flexibility, offering core resources like issuance guarantees in exchange for market access. “For fund houses, if smaller alliances provide certainty at lower barriers, it’s a cost-effective move.”

A fund industry insider in Shanghai noted: “Working with mid-small brokers often ensures higher sales focus and resource allocation. In the crowded ETF market, large brokers may not prioritize promotional support, whereas smaller partners can spotlight specific products, enhancing fund houses’ bargaining power.”

Additionally, the brokerage settlement model bypasses commission distribution limits. Under new rules effective July 1, 2024, funds using this model are exempt from the 15% commission cap. With overall commission ceilings declining, this regulatory advantage strengthens collaboration incentives.

Wind data shows that as of November 26, 2025, 249 of 328 newly launched ETFs this year adopted the brokerage settlement model—a penetration rate exceeding 75%, signaling broad market acceptance.