This newspaper comprehensively reported that there are blockbuster new regulations in the public offering industry.
In order to thoroughly implement the new "National Nine Articles", on April 19, the China Securities Regulatory Commission formulated and issued the "Regulations on the Management of Securities Transaction Costs of Publicly Offered Securities Investment Funds" (hereinafter referred to as the "Regulations"), which marks the implementation of the second phase of the rate reform of the public fund industry, and the comprehensive rate level of the industry continues to decline steadily.
So, the "Provisions" have further strengthened the operational transparency of the public fund industry, what are the changes compared with the previous "Consultation Paper"?
Four highlights have attracted the attention of the industry
There are a total of 19 articles in the "Regulations", which mainly include four aspects from the content point of view, which can also be regarded as the four major highlights of the reform of the public fund commission system.
Aspect 1: Clarify the level of commission rates for securities transactions. Reasonable reduction of the securities transaction commission rate of public funds, of which passive equity fund products shall not pay for research services, liquidity services and other fees through securities trading commissions, and the stock transaction commission rate shall not exceed the average market stock transaction commission rate level in principle; At the same time, a dynamic adjustment mechanism for commission rates will be established, and the commission rates for stock transactions of public funds will be adjusted regularly according to the changes in the rate of the whole market.
Aspect 2: Strengthen the supervision of commission distribution behavior and reduce the upper limit of the commission distribution ratio of securities transactions. First, for managers with a management scale of equity funds with a scale of less than 1 billion yuan, the upper limit of the commission distribution ratio will be maintained at 30%, and for managers with an equity fund management scale of more than 1 billion yuan, the upper limit of the commission distribution ratio will be reduced from 30% to 15%, so as to effectively prevent the transfer of benefits. The second is to clarify the requirements for the distribution ratio of transaction commissions under the coexistence of the brokerage trading model and the rental trading unit model.
Aspect 3: Strengthen internal institutional constraints and external supervision constraints, and clarify the relevant prohibited behaviors of fund managers and securities companies in terms of commission payment and the supervisory responsibilities of fund custodians. According to the "Provisions", it is strictly forbidden to link the selection of securities companies, the leasing of trading units, and the distribution of trading commissions with the scale of fund sales and holdings, and it is strictly forbidden to promise the trading volume and commissions of fund securities to securities companies in any form or to use trading commissions to exchange interests with securities companies, and it is strictly forbidden to use transaction commissions to transfer and pay fees to third parties. The China Securities Regulatory Commission (CSRC) and its dispatched agencies will comprehensively strengthen the supervision of trading behaviors and strictly hold them accountable for relevant violations.
Aspect 4: Optimize and improve the content and requirements of information disclosure, and require fund managers to regularly disclose information such as the level of transaction commission rates, annual summary expenditures and distribution details on the official website, so as to strengthen market supervision and constraints.
Consolidate the responsibilities of fund managers
Overall, compared with the previous draft for comments, the Provisions have not changed much, and the main changes are reflected in the following aspects:
First, the provisions on payment methods have been adjusted, and the phrase "other expenses such as research services shall not be paid through transaction commissions" in the Consultation Paper has been changed to "other fees such as research services and liquidity services shall not be paid through transaction commissions". This change means that the market making service fees provided by brokerages for passive index funds are also clearly included, and mutual funds are not allowed to use trading commissions to pay.
The second is the upper limit on the commission distribution of a single brokerage, which is lowered from the original 30% to 15% in the consultation paper. The officially released Provisions retain this and add the content that "fund managers shall not circumvent Article 5 by converting the securities trading mode of existing funds" on this basis, plugging the loophole that fund products can circumvent the upper limit of the allocation ratio through the settlement of securities transfers. However, this adjustment does not affect the stock settlement products, and the new regulations clearly state that for existing funds that adopt the brokerage trading model, if the transaction commission is used to pay for research services, such behavior is not subject to the new regulations, which is conducive to the development of the securities settlement business.
Third, it continues to emphasize that it is forbidden to link the distribution of trading commissions with the scale of fund sales, and adds a new provision: "If a fund manager entrusts a money brokerage company to provide brokerage services for the fund, the relevant service fees shall not be paid from the fund assets." "The regulation imposes further strict restrictions on channel rebates.
Fourth, the responsibilities of fund managers have been further consolidated. The Provisions require that the general manager, compliance officer and other senior management personnel of a fund manager shall conscientiously perform their compliance management duties. At the same time, the compliance officer shall also conduct a compliance review on the selection of securities companies, the distribution of trading commissions, and the conversion of trading models of existing funds involved in the company's securities transactions.
A number of public offerings said that the "Provisions" aim to regulate the management of securities trading commissions and distribution of fund managers, so as to protect the legitimate rights and interests of fund share holders. The issuance of the new regulations not only marks the further improvement of the "1+N" policy system composed of the new "National Nine Articles" and a series of supporting system rules, but is also expected to significantly reduce investors' fund investment costs, safeguard investors' rights and interests, promote a healthier and fairer investment environment, and promote the public offering industry to better return to the business origin of "being entrusted by others and managing wealth on behalf of others".
Industry experts: guide the industry to return to the roots of research
Tian Liang, chief analyst of the financial industry of CITIC Securities, said that the "Regulations" have been optimized and adjusted in terms of encouraging the return to the origin of research, strengthening the identification of compliance responsibilities and improving the enforceability of policies, which is of great significance for improving investor returns and helping the construction of high-quality capital markets.
Regarding the "liquidity service fee" mentioned in the "Regulations", Wang Weiyi, chief analyst of the non-bank financial industry of Ping An Securities, said that this indicates that public funds are not allowed to pay fund market-making services to brokerages in the form of trading commissions.
Tian Liang also said that compared with the previous "Draft for Comments", the "Provisions" will fill in the potential loopholes in the fields of market-making commissions, soft commissions, transfer settlement and third-party payment, and research services will become the core support for subsequent commission income and market share expansion, and the industry will return to its research roots.
It is worth noting that the Provisions further improve the provisions on the transaction mode of bond settlement. In recent years, the coupon settlement model has gradually emerged. There is an increasing number of funds in the market that are adopting the bond settlement model, both new and existing existing funds announcing their conversion to the bond settlement model.
Tian Lihui, dean of the Institute of Financial Development of Nankai University, said that the provisions of the new regulations on the use of the bond settlement model for funds are more perfect, and the securities companies with strong bond settlement fund business may usher in more business opportunities in the future; at the same time, the new regulations are conducive to creating a more reasonable and perfect commission distribution system, the commission distribution will be more market-oriented, and the importance of brokerage research services will be further enhanced; funds, securities companies and other institutions will be more standardized and transparent in internal management, and the level of information disclosure such as transaction commission rates and distribution details will also be improved.
Zhu Keli, founding dean of the National Research Institute of New Economy, said that on the whole, the new regulations are conducive to ensuring the legitimate rights and interests of investors, reducing investor costs, promoting public offerings and securities companies to further reduce costs and increase efficiency, and find new performance growth points.
E Fund believes that with the gradual implementation of the third phase of standardizing fund sales fees and other supporting measures, it will reduce investors' fund investment costs, promote industry institutions to focus on improving customer service capabilities, provide better asset management and other services, and promote the formation of a good industry development ecology.