Long-term significant underperformance compared to the performance benchmark will result in a significant reduction in the performance-based compensation of fund managers.

The draft for soliciting opinions on the guidelines for comparing the performance of public funds and its supporting rules was released today. The draft emphasizes the alignment of interests, specifying that the comparison of fund investment performance with benchmark performance will be included in the compensation assessment system for fund management executives and fund managers, as well as in the classification evaluation and regulatory system for fund managers. Floating management fees will be charged for fund products that are linked to benchmark performance on a regular basis, and various methods will be used to strengthen the mechanism that aligns the interests of fund managers, executives, and fund managers with investors. In terms of regulating compensation assessments, management companies will establish evaluation and compensation systems with fund investment returns as the core. When the long-term performance of actively-managed equity funds significantly underperforms the benchmark, the performance-based compensation of the relevant fund managers should be substantially reduced.