Event: on May 20, the CSRC issued the measures for the supervision and administration of managers of publicly offered securities investment funds (hereinafter referred to as the measures for managers) and its supporting rules, which will come into force on June 20, 2022.
The measures for managers have been implemented to promote the high-quality development of the industry. The measures for managers, formerly known as the measures for the management of securities investment fund management companies, was issued in 2004 and slightly revised in 2012. Then the public fund industry developed rapidly and the internal and external environment of the industry has changed greatly. Under this background, the CSRC solicited public opinions on the measures for Managers and its supporting rules in July 2020. This is the official implementation of the measures for managers, It will come into force on June 20, 2022. On April 26 this year, the CSRC issued the opinions on accelerating the high-quality development of the public fund industry, which is the top-level design document of the public fund industry and defines the development direction of the public fund industry. The core content of the measures for managers comes down in one continuous line with the opinions on high quality development, which is the embodiment of the further implementation of the opinions on high quality development at the system and implementation levels.
Improve the supervision system throughout the chain and highlight the combination of release and management. Compared with the old regulations, the revised Measures for managers have improved the supervision requirements of public fund managers from the whole chain of “access – internal control – operation – Governance – Exit – supervision”. 1) Access: strengthen the equity management of fund management companies and expand the team of public fund managers; 2) Internal control: focus on improving the compliance and risk control ability of the main body of the organization; 3) Governance: highlight the long-term assessment and incentive, and support the realization of differentiated development on the basis of improving and strengthening the main business; 4) Exit: establish a market-oriented exit mechanism; 5) Supervision: clarify the supervision and management regulations and legal responsibilities.
Relaxing license restrictions and eliminating the fittest is conducive to the expansion of the public fund industry. The measures for managers pointed out that on the premise of continuing to adhere to the policy of “one participation and one control” of fund management companies, the restrictions on the number of public offering licenses should be moderately relaxed, and professional asset management institutions such as securities asset management companies, insurance asset management companies and bank financial management subsidiaries under the same group are allowed to apply for public offering licenses, that is, “one participation, one control and one license”. Correspondingly, a special chapter is added in the measures for managers to clarify the withdrawal mechanism of public fund managers. In the future, we are expected to see: 1) the number of newly established public fund companies increases; 2) Due to the transformation of the holding business of the securities company, it is expected to obtain the public capital management license; 3) The number of public offering licenses under the same entity is relaxed. For example, the bank has both financial management companies and public funds, and the financial management subsidiary can also establish public funds. 4) Public fund companies that fail to operate may cancel their qualifications or withdraw from the market through mergers and acquisitions.
It supports differentiated development and is expected to incubate innovation. 1) Cultivate first-class asset management institutions, support fund management companies with prominent public offering main business, stable compliance operation and appropriate professional ability to set up professional subsidiaries, specializing in public REITs, private equity investment fund management, fund investment consulting, pension financial services and other businesses. 2) Allow public fund managers to implement operation outsourcing, support small and medium-sized fund management companies to reduce costs and increase efficiency, and focus on improving the level of investment and research. In the follow-up, we are expected to see some leading public fund companies form their own characteristics, enrich investment strategies and scope, and form differences on the product side by relying on the advantages of shareholders, investment and research ability and customer resource endowment.
Build a long-term incentive and restraint mechanism to ensure the long-term stability of governance. The measures for managers require: 1) more than 5% of shareholders promise a certain equity lock-in period; 2) The board of directors shall conduct long-term assessment on the management for more than three years; 3) Take the long-term investment performance and compliance risk control as an important basis for the assessment of personnel in key positions; 4) Implement the salary deferral, recourse deduction and bonus follow-up investment system, and prohibit short-term assessment and excessive incentive. The construction of short-term incentive and long-term incentive and restraint mechanism is strictly prohibited, which further maintains the consistency of the long-term interests of fund managers and investors.
Investment suggestion: the implementation of the measures for managers will help to promote the construction of an industry ecology with diversity and openness, full competition, survival of the fittest and orderly advance and retreat, and further benefit the high-quality development of the public fund industry. It is suggested to pay attention to Gf Securities Co.Ltd(000776) , Orient Securities Company Limited(600958) , the industry leader Citic Securities Company Limited(600030) , the asset management company is expected to obtain the public offering license, and China stock market news, the leader of public fund sales on a commission basis.
Risk warning: the implementation of the policy is less than expected; Market volatility
