The China Securities Regulatory Commission (CSRC) has unveiled new regulations aimed at standardizing mutual fund trading fees, a move set to enhance transparency and protect investors’ interests. The rules, announced on Friday, will come into effect on July 1, 2024.
The CSRC stated that these regulations are designed to improve the management of securities trading fees and to ensure that mutual fund managers allocate trading commissions appropriately. This initiative is part of a broader effort to safeguard the legal rights of fund shareholders and to promote a fair and efficient financial market.
The introduction of these rules marks the completion of the second phase of China’s public fund industry fee reform. The first phase, which concluded at the end of October 2023, focused on systematically reducing management and custody fees for actively managed equity products.
According to data from 2023, the new regulations are expected to reduce the annual total of stock trading commissions for public funds by approximately 38 percent. Combined, the measures from the first two phases of the fee reform are projected to save investors around 20 billion yuan (about $2.9 billion) annually in costs.
This significant reduction in fees is anticipated to bolster investor confidence and encourage greater participation in China’s mutual fund market. By lowering the cost burden on investors, the CSRC aims to create a more inclusive financial environment that supports sustainable economic growth.
The fee reforms reflect China’s ongoing commitment to financial market reform and opening-up, aligning with international best practices. Market analysts and investors are closely watching these developments as they may signal further improvements in China’s financial regulatory landscape.
