On December 31, 2025, to implement the "Action Plan for Promoting High-Quality Development of Public Funds," the China Securities Regulatory Commission (CSRC) revised the "Provisions on Sales Fees of Open-ended Securities Investment Funds," renaming it the "Provisions on Sales Fees of Publicly Offered Securities Investment Funds" (hereinafter referred to as the "Provisions"), which will officially take effect on January 1, 2026.
Recently, multiple institutions received a notice regarding issues related to the implementation of the "Provisions on Sales Fees of Publicly Offered Securities Investment Funds" (hereinafter referred to as the "Notice"). The Notice provides supplementary explanations for several details of the aforementioned Provisions, clarifying that starting January 1, 2027, fund managers must not charge subscription fees or sales service fees when selling funds they manage. It also requires that distribution institutions must not continue charging sales service fees for non-monetary market fund shares held for more than one year.
When public fund companies sell their own funds, they are prohibited from charging subscription fees or sales service fees. Item 3 of Article 7 of the Provisions stipulates: "Fund managers selling funds they manage shall not charge subscription fees or sales service fees." The recent Notice provides detailed regulations: Fund managers must cease charging subscription fees starting January 1, 2027. For fund share classes that charge a sales service fee, fund managers may continue to collect this fee for the corresponding shares, but they must fully refund investors the sales service fees collected after January 1, 2027, at the time the investor redeems the fund shares or when the fund contract terminates.
Furthermore, fund distribution subsidiaries selling funds managed by their parent company must, by reference to Item 3 of Article 7 of the Provisions, not charge subscription fees or sales service fees.
For Fund of Funds (FOF), the Notice requires that they should also, based on their specific product types, refer to Articles 8 and 11 of the Provisions to charge corresponding subscription fees and sales service fees.
For certificates of deposit funds, commodity funds, and real estate investment trust funds, fee collection standards should be implemented by reference to those for bond funds under Articles 8 and 11 of the Provisions, based on the operational characteristics of these products. For enhanced index funds, the sales fee collection standards for index funds under Articles 8 and 11 of the Provisions shall apply.
Sales service fees must not be continued for non-monetary market funds held for over one year. According to Article 11 of the Provisions, for funds or fund share classes that do not charge a subscription fee, fund distribution institutions may charge a certain percentage as a sales service fee. The recent Notice stipulates that starting January 1, 2027, for non-monetary market fund shares held continuously for more than one year, distribution institutions must not continue to charge a sales service fee. The relevant fees will be collected using a "collect first, refund later" method.
Additionally, according to the "Provisions on the Management of Hong Kong Mutual Recognition Funds," the fee arrangements for Hong Kong mutual recognition funds sold in mainland China shall be implemented based on the regulatory requirements of the Hong Kong Securities and Futures Commission and the stipulations in the fund's legal documents.
Article 15 of the Provisions states that fund managers must not unfairly treat different investors in the same fund by setting up exclusive share classes or other forms with specific distributors to implement differential fee rates. The Notice requires that for differential fee share classes set up for the same fund, fund managers must complete rectification before January 1, 2027, by taking measures such as share class consolidation or adjusting to the same fee rate.
According to Article 17 of the Provisions, fund managers must pay all interest accrued from fund sales settlement funds, after deducting reasonable expenses such as transfer fees, to investors or into the fund's assets. Fund distribution institutions must, starting January 1, 2027, prioritize paying interest on fund sales settlement funds to investors at a rate not lower than the current demand deposit interest rate of commercial banks; if genuinely difficult, the interest may be allocated to the fund's assets.
Article 21 of the Provisions states that fund managers and distributors must not indirectly pay or receive fund sales fees through themselves or affiliated parties by means such as conference fees, training fees, travel expenses, advertising fees, or technical service fees. The term "affiliated parties" mentioned in this Notice is determined in accordance with the "Accounting Standards for Business Enterprises."
As required by Article 24 of the Provisions, fund distributors must display various types of information in a conspicuous location within their sales premises, in a concise and通俗易懂 manner, where "sales premises" includes the online sales platforms of fund distributors.
According to Article 29 of the Provisions, for funds already issued whose sales fee structures and rate levels do not comply with these Provisions, fund managers must make adjustments within 12 months from the effective date of these Provisions, complete the modification of fund information technology systems, amend legal documents such as the fund contract and prospectus, and issue announcements. Fund managers and distributors must re-sign distribution agreements within the timeframe specified by this article. The recent Notice clarifies that "funds already issued" include funds established on or before December 31, 2025, as well as funds for which a issuance announcement has already been published.
The Notice indicates that when fund managers adjust fund sales fee structures and rate levels in accordance with the Provisions, they may, after reaching consensus with the fund custodian, modify legal documents such as the fund contract and prospectus and issue announcements, without the need to convene a fund shareholders' meeting.