China Securities Regulatory Commission consults on revised public fund sales fee rules to cut investor charges and tighten sales practices

The China Securities Regulatory Commission has published for public consultation draft revised rules on sales fees for publicly offered securities investment funds, replacing and renaming the existing framework for open-end fund sales fees. The proposals are positioned as part of the action plan to promote high-quality development of the public fund sector, with a focus on lowering investors’ costs and strengthening market order and investor protection. The draft, comprising six chapters and 28 articles, would reduce subscription fees, purchase fees and sales service fee rate levels, and would require redemption fees to be credited in full to the fund’s assets. To encourage long-term holding, it specifies that stock, hybrid and bond funds would no longer accrue sales service fees for investors with a holding period exceeding one year. It also introduces differentiated caps on trailing commission payment ratios, and includes measures to standardise sales fee practices by addressing issues such as the ownership of interest on fund sales settlement monies and double charging in fund investment advisory services, alongside plans to establish an institutional-investor direct sales service platform for fund managers. The regulator will refine the rules based on feedback and complete the relevant procedures before issuing the final measures for implementation.