China's Securities Regulator Proposes Cost Cuts for Mutual Funds

Draft rules aim to reduce trading commissions by a third and limit payments to single brokerages.

China's securities regulator, the China Securities Regulatory Commission (CSRC), has published draft rules aimed at reducing trading commissions for mutual funds and addressing conflicts of interest in the industry.
The proposed rules would reduce trading commissions for both passive and active fund products, with estimates suggesting overall commissions could be cut by a third.
Fund managers would be prohibited from paying trading commissions to purchase third-party services, such as external expert consultancy, financial terminals, or databases.
The draft rules also stipulate that a mutual fund company cannot pay more than 15% of its total trading commissions to a single brokerage.
Analysts predict that the new rules would benefit brokerages with strong trading and research capabilities.