China Securities Regulatory Commission launches consultation on guidance to standardise public mutual fund performance benchmarks

The China Securities Regulatory Commission (CSRC) published an exposure draft guidance and opened a public consultation to regulate how publicly offered securities investment funds select and use performance benchmarks, with the aim of ensuring benchmarks properly represent fund style, constrain investment activities and support performance assessment. The draft guidance, comprising six chapters and 21 articles, would require a benchmark to reflect the core elements and investment style set out in the fund contract and limit arbitrary changes once selected. Fund managers would be required to establish end-to-end internal control mechanisms, elevate internal decision-making levels and maintain investment style stability, while also standardising the use of benchmarks in remuneration assessment, fund distribution and fund evaluation practices. Beyond managers’ self-discipline, the proposals strengthen information disclosure and enhance the oversight role of fund custodians. In parallel, the Asset Management Association of China issued an exposure draft set of operational rules specifying practical requirements for benchmark selection and presentation, disclosure, risk controls and compliance management. CSRC will revise the guidance based on consultation feedback and complete the relevant procedures before issuing it for implementation.