CSRC beefs up fees model
11 June 2013
By Hui Ching-hoo
The China Securities Regulatory Commission (CSRC) unveiled the amended ‘Administrative Provisions on the Sales Charge of Open-End Securities Investment Funds’ on Friday (June 7). The move was intended to further regularise fee structures for domestic fund products to encourage investors to commit to longer-term fund investments.
One of the key initiatives in the provision stipulates that a punitive redemption fee will be imposed on investors that pull their monies out of fund products within six months of subscription. The redemption fees are 1.5% for withdrawals within seven days, 0.75% for those within 30 days, and 0.5% for those within six months.
A spokesperson from CSRC told local media that the existing fund fee structure encompasses various charges, such as subscription fees, transfer fees, and redemption fees. Nevertheless, he says, it lacks flexibility.
The spokesman said the new regulation helps to strengthen the fees models and makes administrative fees for fund products more transparent.
The new regulation will come into force on August 1.
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