Guangdong government fund exceeding trillions welcomes fee reform: management fees are prohibited from being deducted from the principal to promote survival of the fittest in the industry.

Recently, the Finance Department of Guangdong Province issued a notice on the issuance of the "Management Measures for the Government Investment Fund of Guangdong Province", sparking heated discussions in the market. One of the rules that has attracted much attention is that the fund management fees should be paid from fund profits or interests, and should not be allowed to be reimbursed from the principal. If the fund has not generated any profits or interests, the fees can be advanced from the principal and reimbursed once the fund generates profits or interests. Industry insiders believe that the "Management Measures" will have a significant impact on relevant institutions in the Pearl River Delta region, and may accelerate industry consolidation by forcing institutions to enhance their investment capabilities. Some investors also suggest that different regulatory approaches should be taken for government investment funds, government-guided funds, and sub-funds.