Securities regulator in China signaled that the fund management industry needs to accelerate its shift toward delivering sustainable long-term returns

China’s securities regulator has outlined a series of measures aimed at transforming the fund management industry to prioritize long-term, sustainable returns for investors. The China Securities Regulatory Commission (CSRC) recently published draft rules that will significantly reduce subscription and sales-related fees across the $4.9 trillion mutual fund industry, marking the final phase of a three-stage fee reform initiative. These changes are intended to lower costs for investors, discourage short-term speculation, and promote long-term investment strategies.

Under the proposed rules, subscription fees for equity funds will be capped at 0.8% of the invested amount, down from the previous 1.2%. Sales service fees for exchange-traded funds and bond funds will also be cut in half. Investors who hold funds for more than a year will no longer be charged sales service fees, providing a financial incentive for long-term engagement. The CSRC emphasized that these reforms will help align the interests of fund managers with those of investors by encouraging a focus on returns rather than fund size.

The reforms are part of a broader push by Chinese regulators to strengthen the sustainability and resilience of the financial system. In 2025, China continued to advance its green finance framework, including the introduction of a unified green taxonomy and enhanced disclosure standards. These developments reflect a growing emphasis on environmental, social, and governance (ESG) considerations in financial decision-making.

The CSRC’s latest measures are expected to reduce annual investor costs by approximately 30 billion yuan ($4 billion) and contribute to a more stable and investor-friendly market environment. The regulator will accept public feedback until October 5.