Fund sales foreign entrants will positively impact competition

Foreign players entering the fund industry will vitalise competition with their advanced expertise and know how in offering value-added services.

On June 22, the China Securities Regulatory Commission (CSRC) issued the Measures for the Administration of the Sale of Securities Investment Funds (Revised) (中国证券监督管理委员会证券投资基金销售管理办法 (修订)) (the Measures) which will go into effect on October 1. The new rules loosen restrictions on China's fund industry, opening up more intermediary sales channels, including foreign banks and independent fund companies. Third party intermediaries too, such as online payment platforms, can apply for licences to sell funds.

Commercial banks currently dominate the market and there are no differentiated services because they are restricted from charging higher commissions. This will change as the Measures now allow fees for value-added services that will encourage sales providers to improve their offerings.