According to a report in China Daily on January 27, 2026
BEIJING — China’s securities regulator has issued new guidelines to strengthen the role of performance benchmarks in mutual fund investments, marking a major step toward improving fund performance and attracting long-term capital, officials and experts said.
Performance benchmarks — typically stock or bond indexes — are widely used in overseas markets but have been less developed in China. They serve as a standard to reflect a fund’s investment style, ensure alignment with that style, and evaluate performance.
The China Securities Regulatory Commission (CSRC) released the guideline on Friday, establishing a clear framework for selecting and using benchmarks, placing primary responsibility on fund managers, and clarifying the roles of custodians and distributors. The guideline, effective from March, includes a one-year transition period for existing funds to adjust benchmarks without forcing large-scale portfolio shifts.
Accompanying the guideline, the Asset Management Association of China (AMAC) released an operational rule book detailing requirements to ensure benchmarks accurately reflect fund positioning and style, which should not be changed arbitrarily due to manager turnover, market fluctuations, or short-term performance rankings.
The reform also links fund managers’ compensation to benchmark performance. Managers whose long-term results fall significantly behind their benchmarks may face reductions in performance-based pay, while those outperforming may be rewarded. This aligns managers’ incentives with investor interests, aiming to improve returns and investment transparency.
A spokesperson for China Asset Management described the guideline as “an important milestone” for the mutual fund industry’s high-quality development, helping investors understand fund products more clearly and make long-term investment decisions with confidence.
Experts said the move fills a long-standing regulatory gap, promotes standardized fund management practices, and is expected to attract more long-term capital into China’s growing mutual fund market.