Guotai Haitong has issued a research report stating that the revisions focus on three major directions: supporting the development of equity funds, standardizing investment operations, and improving operational flexibility. The high-quality development of the public fund industry is being advanced, and medium- to long-term capital inflows are expected to continue. The firm is bullish on household deposits shifting toward public funds and other asset management products in a low interest rate environment, with brokerages continuing to benefit as intermediaries for equity assets. It recommends an overweight position on brokerages.
Event: On October 9, the China Securities Regulatory Commission publicly solicited opinions on the "Administrative Measures for the Operation of Publicly Offered Securities Investment Funds (Draft for Comment)" (hereinafter referred to as the "Operation Measures") and supporting rules.
The main views of Guotai Haitong Securities Co., Ltd. (601211) (Guotai Haitong) are as follows:
Adapting to the high-quality development orientation of public funds and improving supporting rules. The "Operation Measures" is an important supporting departmental regulation of the "Securities Investment Fund Law," clarifying matters such as product registration, subscription and redemption, investment restrictions, income distribution, and holders' meetings. In 2025, the "Action Plan for Promoting the High-Quality Development of Public Funds" was issued, focusing on "steadily advancing public fund reform, promoting the high-quality development of securities and fund institutions, and supporting medium- to long-term capital entering the market," pushing the public fund industry to transform from prioritizing scale to prioritizing investor returns. The current "Operation Measures" has been in place for over 10 years since its revision and release in 2014. Against this backdrop, the rules are being revised and improved.
The revisions focus on three major directions: supporting the development of equity funds, standardizing investment operations, and improving operational flexibility. 1) Supporting the development of equity funds: First, lowering the establishment threshold for equity funds, reducing the threshold for stock-mixed funds, FOF funds, etc., from 200 million yuan in scale and 200 million shares to 50 million yuan and 50 million shares respectively; second, allowing FOFs to invest in ETF feeder funds, and raising the upper limit for non-FOF funds investing in other funds from 10% to 30%; third, optimizing regulatory requirements for index funds; fourth, broadening space for product innovation, such as adding "closed-end funds with no fixed term" and improving the definitions of stock funds and bond funds. 2) Standardizing investment operations: such as strengthening investment style stability management, reinforcing performance benchmark constraints, and strengthening counter-cyclical layout management of fund products. 3) Improving operational flexibility: such as improving regulatory requirements for "mini funds," optimizing exit requirements for sponsored funds, and improving the governance efficiency of holders' meetings.
High-quality development of the public fund industry is being advanced, and medium- to long-term capital inflows are expected to continue. The "Operation Measures" further implements the action plan for the high-quality development of public funds. The firm believes that reform measures are expected to achieve deep alignment of interests between fund managers and investors, help enhance investor trust in public funds, and drive industry expansion and continuous inflows of medium- to long-term institutional capital.
Risk warnings: Significant volatility in the equity market; household capital entering the market falling short of expectations.