Countdown to New Regulations: How Will the Performance Benchmark Be Implemented? First-line Investigation: Public funds have received multiple rounds of regulatory feedback

Gelonghui, February 24 — According to Cailian Press, the new regulations on performance benchmarks for public funds went into effect at the beginning of the year. The regulatory authority clarified that the new rules will be officially implemented on March 1 this year. At that time, new products will need to strictly follow the new regulations, while existing products have been given a full one-year transition period.

Despite the one-year transition, fund companies have already started submitting modification reports for their existing products. How are the progress and feedback from regulators? Will adjustments to the performance benchmarks of existing products impact the market?

As of now, several fund companies have submitted reports on benchmark modifications. Key points from regulatory feedback include: first, the proportion of adjustments to performance benchmarks should not be too high—equity funds should not exceed 70%, and fixed income funds should not exceed 40%. Funds with a high adjustment ratio still need to revise their reports. Second, during the adjustment process, the type of index should remain consistent; for example, bond funds tracking the wealth index cannot be changed to track the full-price index. Third, regulators hope that benchmark adjustments proceed steadily to avoid market shocks caused by large-scale position rebalancing. Currently, the adjustment process for existing products is still in the reporting and feedback stage. The industry is awaiting further regulatory notice on when the official launch will occur.