On May 7th, the China Securities Regulatory Commission announced the "Action Plan for Promoting the High Quality Development of Public Funds", marking a systematic reform of the public fund industry with over 30 trillion yuan. The action plan focuses on optimizing the charging mode of active equity funds, improving industry assessment mechanisms, and vigorously developing equity funds, guiding public funds to truly shift from "scale oriented" to "return oriented", and promoting the formation of a "turning point" for high-quality industry development. The key to addressing problems and focusing on investors' sense of gain is to reform the fund operation mode and urge the industry to return to the origin of 'entrusted and managed by clients'. ”Wu Qing, Chairman of the China Securities Regulatory Commission, said when talking about strengthening the interest binding between public funds and investors. Looking back at the development history of public funds, there have been moments when the industry scale has made rapid progress and returns have been abundant, as well as situations where investors have been criticized for losing money due to market fluctuations. The key issue behind the ups and downs is to truly bind the interests of fund companies and investors together, completely changing the industry's "scale orientation". Wu Qing emphasized the optimization of the fee charging model for active equity funds, and that those with poor performance must be charged less management fees. Through a floating management fee collection mechanism, the phenomenon of fund companies' "guaranteed income during droughts and floods" can be reversed. At the same time, indicators that directly affect the interests of investors, such as whether the performance outperforms the benchmark and the profit and loss situation of investors, should be included in the assessment system of fund companies and fund managers, urging fund companies to shift from "heavy scale" to "heavy return". In addition, it is necessary to increase the ratio of bonuses used by fund company executives and fund managers to invest in their own products, and moderately extend the lock up period to make these "key few" more aligned with the interests of investors. The head of the relevant department of the China Securities Regulatory Commission introduced that there are two important "command sticks" for this reform. One is to pay more attention to investor returns, further emphasizing the role of performance benchmarks as the "anchor" and long-term assessments as the "ruler". Another is to guide the development of equity funds and support them to play a greater role through a series of policy arrangements. Reform will simultaneously focus on horizontal (similar products) and vertical (time dimension) aspects, guiding fund companies and fund managers to enhance the stability of fund investment behavior. ”Zhao Guicai, Chairman of ICBC Credit Suisse Fund Management Co., Ltd., said that this helps to avoid fund product investment behavior deviating from the name and positioning, reduce "chasing after gains and selling losses", improve long-term product returns, and enhance investor holding experience. At the same time, guide the industry to better balance the development of the relationship between "scale" and "quality", and pursue higher quality scale growth. Thoroughly upgrading and guiding the high-quality development of public funds, a distinctive feature of this public fund reform is to improve long-term mechanisms, strengthen incentive and restraint effects, urge industry institutions such as fund companies and fund sales agencies to return to their original intentions, and guide the "full chain" upgrading of the public fund industry. From the perspective of reform measures, it includes not only the optimization of regulatory mechanisms such as classification evaluation, salary management, and product registration, but also the upgrading of internal institutional mechanisms in industry institutions such as product design, investment management, and performance evaluation. Taking salary management, which is widely concerned by all parties, as an example, the action plan provides a clear direction. For fund managers whose product performance falls below the performance benchmark by more than 10 percentage points for more than three years, performance-based compensation should be significantly reduced; For fund managers whose product performance significantly exceeds the performance benchmark for more than three years, their performance-based compensation can be reasonably and moderately increased. It is worth noting that this public fund reform continues to emphasize the development and growth of equity funds. This is the key to distinguishing public funds from other investment channels and creating unique value for investors, as well as the key to capacity building and high-quality development of industry institutions. Data shows that since September last year, the size of equity funds has increased from 7 trillion yuan to 8.3 trillion yuan. Optimize the classification evaluation mechanism for fund companies and fund sales institutions in the action plan, and promote the increase in the issuance and sales of equity funds. Actively promote product innovation, continuously enrich index funds and active fund products that are in line with national development orientation and more conducive to creating long-term returns for investors; At the same time, it will further significantly improve the registration efficiency of equity funds. In addition, the reform also focuses on improving the governance of fund companies, strengthening the construction of core investment research capabilities, and enhancing the level of investor services to accelerate the construction of first-class investment institutions. The public fund industry, which has over 800 million investors and supports the industry to fulfill its functions in response to demand, has been in operation in China for 27 years. As of the end of April, there were 163 public fund managers nationwide, managing public funds worth 32.5 trillion yuan. At present, public funds manage a total of 6.1 trillion yuan in various pension assets such as national social security funds, basic pension insurance funds, enterprise annuities, and occupational annuities, accounting for over 50% of China's entrusted investment in pension funds. In recent years, in the entire capital market reform, encouraging the entry of medium and long-term funds into the market and increasing the proportion of institutional investors have been given more importance, and the reform deployment of public funds has been intensively carried out. Last April, the new "National Nine Point Plan" proposed a series of reform requirements, including "vigorously developing equity public funds and significantly increasing the proportion of equity funds"; Last September, the Central Political Bureau emphasized the need to "steadily promote the reform of public funds"... This reform clearly adheres to the direction of marketization and rule of law, draws on mature international experience, explores the establishment of a new industry development model that is in line with China's national and market conditions, and strives to solidly promote the implementation and effectiveness of various policy measures within about three years. From scratch and from small to large, the public fund industry plays an increasingly important role in meeting residents' wealth management needs, promoting capital market reform and development, and serving the real economy. With the continuous promotion of the personal pension system, the ability of public funds to obtain long-term stable returns for the pension "purse" is also highly anticipated. In the eyes of many market participants, this reform is significant and wide-ranging, and has important milestone significance in the development history of public funds in China. This reform is also an inevitable move in line with the development stage of China's capital market, which will effectively promote a virtuous cycle of investment and financing, "said Chen Ge, General Manager of Fuguo Fund Management Co., Ltd. In the future, the Chinese economy will continue to move firmly towards high-quality development. How to effectively allocate more financial resources to the forefront of new quality productivity development? How to better enable residents to share the dividends of economic development? I believe that the public fund industry will continue to explore reforms, improve its internal strength, and provide better answers. (New Society)