China Securities Regulatory Commission (CSRC) is proposing to reduce the salary of fund managers, whose portfolio post is damaged or lags their benchmark by 10% or more, said Bloomberg reports that the familiar sources in this regard.
These measures are part of a widespread improvement efforts to reshape the mutual fund industry and promote better performance in the country’s TR 33 trillion yuan ($ 6 4.6 trillion).
The initiative follows the CSRC’s directive for mutual funds in January to increase at least 10% of the year in the next three years. At that time, Chairman Wu King also announced that the state-owned large insurance companies should invest 30% of the new policy premiums in stocks that started in 2025-a move that surprised market participants and soon increased the CSI 300 index by 1.8%.
Despite these efforts, the China’s stock market in the U.S. There has been a conflict amid economic growth and rising trade tensions, the MSCI China index has fallen into the bear market earlier this year, and active equity funds continued the underperform with an average of 4% return last year against CSI 300.
While the specifications are still under discussion, the draft plan indicates that the funds return to the senior management exhibition at least half of the weight. The report states that the traditional industry matrix will be less consistent under the proposed changes.
Slow economy and U.S. CSI 300 index this year has increased 1.7% this year, as China is struggling to attract stable, long -term capital amid growing tensions, the investor’s spirit remains fragile after the return of years later from actively -powered funds. Many investors have been disappointed to see the so -called star fund managers Pocket Heavy Pay while giving disappointing results.
Officials are also looking for new steps to promote equity-centered products. The report states that the proposed structure, stock and index funds based on the benchmark of the mature market can receive regulatory approval within only 10 days. Mutual funds with low fees, prolonged investment horizons and regular dividend payments are likely to receive preferential treatment.
China’s mutual fund continues to expand into the industry, attracted to global players like Fidelity International Limited, however, last year, with only the back% of the active equity funds returned to the CSI 300, many investors have been inactive instead of these underperformations.
The dispute over the underperformance is not limited to fund managers. Under the rules of the rules, at least 80% of display assessments will be based on a return of three years or more. The report states that if these measures also leave space for delayed payments and clubs of returns, if the funds fail to meet expectations.
Regulators have been indicating shaking-ups in this area for months. In January, China’s top market regulator, Wu King, indicated an imminent update, indicating that better aligned incentives could force mutual funds to increase equity holdings annually by 10% in the next three years. At the same time, policy -partners unveiled a different initiative to channel more insurance capital stocks, making state -owned insurance companies investing 30% new policy premium in mainland equity, which started in 2025.
With active fund managers under pressure to justify their payroll, China’s latest regulatory pressure can set an example for the global asset management industry. Whether it leads to a strong return – or the migration of top talent – is seen.
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