Huatai Securities: New Fund Operation Measures May Steer Mutual Funds Toward Quality
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Abstract
Huatai Securities analyzes the draft revision of China's Measures for the Administration of the Operation of Publicly Offered Securities Investment Funds, released for consultation by the CSRC on October 9, 2026. The revision pairs looser issuance rules with tighter operational constraints, aiming to shift the mutual fund industry from a scale race toward quality. Key features include lower establishment thresholds—equity, hybrid and FOF funds drop from RMB 200 million / 200 million units to RMB 50 million / 50 million units—stricter oversight of style drift, with thematic funds required to keep at least 80% of assets aligned with their stated investment direction, clarified rules on derivatives and feeder ETFs, and support for counter-cyclical positioning. On positioning, Huatai notes funds recently added to TMT and advanced manufacturing; equity ETFs saw net inflows of RMB 40.963 billion last week, led by STAR 50 ETFs; and its fixed-income-plus FOF simulated portfolio is up 2.25% year to date, outperforming the Wind mixed secondary-bond fund index. Regulators are expected to keep steering resources toward investment returns rather than scale growth.
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