China moves to strengthen disclosure on public investment funds

China's top securities regulator released on Friday draft revisions to rules on information disclosure by publicly offered investment funds, stepping up requirements on reporting investment returns to improve transparency and better protect investors.

According to the draft rules, the regulator will streamline disclosure items that are currently duplicated or similar across annual, semiannual and quarterly reports, while setting more tailored disclosure requirements based on the different functions of each type of report.

The draft adds new investor-focused indicators. Fund managers will be required to disclose in annual and semiannual reports the proportion of profitable investors over the past year for actively managed equity and hybrid funds, in a move aimed at guiding the industry to place greater emphasis on investor returns.

In addition, fund managers must disclose stock turnover ratios of relevant products in annual reports. The requirement is designed to strengthen transparency on investment behavior and portfolio stability, and to encourage fund managers and portfolio managers to adopt more prudent and rational investment approaches.

The regulator said that the draft rules are intended to enhance industry transparency, safeguard the lawful rights and interests of fund investors, and support the high-quality development of the public fund sector.

Some disclosure requirements will also be simplified or adjusted in line with higher-level regulations, industry practice and experience from mature overseas markets.

Public feedback on the draft rules will be accepted until March 2.