New Performance Benchmark Regulations to Take Effect Tomorrow: Public Fund Industry Intensively Calibrates Investment Anchors

Our Reporter Chang Xiaoyu

On March 1st, the “Guidelines for Performance Benchmarking of Publicly Offered Securities Investment Funds” (hereinafter referred to as the “Guidelines”) will officially come into effect. This new regulation, aimed at strengthening the constraints of performance benchmarks, is prompting the entire industry to conduct a comprehensive “calibration” of the performance benchmarks set for existing funds.

Performance benchmarks are reference standards set by fund managers based on product positioning and investment objectives. The Guidelines clearly require standardization in their selection and use, and provide a transition period until February 28, 2027 (one year from the effective date) for existing products.

As the countdown to the new regulation’s implementation ticks away, the Securities Daily reporter conducted a preliminary survey of several public fund institutions. From the interviews, it appears that the adjustment work for the performance benchmarks of existing funds is progressing steadily, with ongoing in-depth communication between regulators and institutions. While some details remain to be clarified, the overall direction of “returning to contractual agreements and aligning with reality” is gradually becoming clear.

Many Institutions Have Submitted Adjustment Plans

The issuance of the Guidelines is not merely a technical revision but a targeted policy response by regulators to longstanding issues in the public fund industry. In the past, due to the lack of specialized and systematic regulations, the constraints of performance benchmarks were weak. Some funds’ performance significantly deviated from their benchmarks, even exhibiting “style drift,” which affected investors’ real gains and posed challenges to industry regulation. The Guidelines aim to address this by standardizing the selection and use of benchmarks, effectively ensuring that benchmarks accurately reflect product investment styles, constrain investments, and measure performance.

The Guidelines specify that for existing products whose benchmarks do not comply with the Guidelines or the self-regulatory rules of the Fund Industry Association, a one-year implementation transition period will be granted. From the interviews, although the deadline is approaching, most public fund institutions have not “rushed to act” but have proactively and orderly initiated relevant preparations.

“Our company has officially started evaluating and adjusting the performance benchmarks of existing funds,” said a person in charge at Green Fund to Securities Daily. “As early as December 2025, after receiving the regulatory department’s performance benchmark revision statistics for existing products, Green Fund quickly formed a dedicated team comprising product, investment, and compliance departments to conduct data collection, analysis, and draft plans. We submitted the adjustment plan in early 2026.”

China Post Venture Capital Fund also acted swiftly, completing a systematic assessment of all products and preliminarily drafting adjustment plans for those requiring benchmark changes. A relevant person in charge told Securities Daily: “We have established a ‘three-tier linkage’ working structure, with the management team responsible for final decisions on benchmark selection; the product department leading a joint task force with investment research, marketing, and compliance to identify, evaluate, and draft plans for all products; and compliance overseeing the entire process to ensure legality and compliance.”

Additionally, many public fund institutions of various sizes in East China have confirmed to the reporter that they have submitted relevant adjustment plans.

This indicates that public fund institutions attach great importance to the implementation of the Guidelines and have prepared organizationally and procedurally.

Steady Progress Becomes Industry Consensus

Recent developments show that many fund institutions are entering a critical phase of deep communication with regulators and plan optimization.

A person in charge at Green Fund revealed: “After submitting the adjustment plan, we received feedback and guidance from regulators, especially clarifying data collection and calculation methods. We have now further refined the plan based on regulatory comments and resubmitted it.”

A person in charge at China Post Venture Capital Fund said: “Some plans have undergone multiple rounds of communication and feedback with regulators, and we are now optimizing and detailing the plans according to guidance.”

From regulatory feedback, core principles and concerns are becoming clearer. The China Post Venture Capital Fund deeply understands that the core requirement from regulators for benchmark adjustments is “returning to the contract and aligning with reality,” rather than “beautifying performance or lowering difficulty.” A responsible person at the company stated: “This requires fund managers to conduct thorough backtesting of historical holdings and style attribution analysis when drafting plans, ensuring that benchmarks truly reflect the fund’s risk-return characteristics.”

The relevant person at Green Fund shared a specific technical guidance example: “Regulators have provided targeted guidance on the benchmarks needing adjustment. For example, for flexible allocation products, the benchmark should be reasonably set or adjusted based on the long- to medium-term actual investment positions in equities; for thematic equity hybrid products, if more granular secondary index libraries are used, thorough justification is required.”

However, practical challenges remain. A responsible person at a mid-sized public fund in North China said: “The main difficulty for us is matching benchmarks for thematic funds. For products with historical holdings that deviate significantly from the original benchmark, selecting a new benchmark that is both aligned with actual investments and meets the index library requirements requires repeated deliberation.”

Regarding adjustment pace and market impact, all parties emphasize that “stability” is the top priority. A person at Green Fund said: “The equity products involved in benchmark adjustments are few, so the pace is controllable. We will proceed carefully to ensure smooth operation.” A person at China Post Venture Capital added: “We will strictly follow regulatory requirements for self-inspection and correction, ensuring the plans meet regulatory standards and are practically feasible. The process will be carried out in four stages: assessment, drafting, reporting, and implementation.”

Third-party organizations also offer suggestions from different perspectives. Tianxiang Investment Consulting Fund Evaluation Center noted: “Public fund institutions can adopt differentiated adjustment strategies. For products with clear future positioning that only require benchmark adjustments without changing holdings, plans can be submitted first; for more complex cases, sufficient time should be allocated for communication with regulators and peers before submission.”

Morningstar China senior analyst Li Yiming suggested: “Fund institutions can adopt a phased, gradual approach, leaving ample time for disclosures, system upgrades, client notifications, and risk warnings.”

Rebuilding Internal Control Ecosystem

Beyond promoting benchmark adjustments for existing products, the deeper impact of the new regulation lies in the profound reshaping of internal governance and industry ecology. This change is quietly unfolding in practice.

A person in charge at China Post Venture Capital Fund shared: “In the past, risk control based on internal policies and management ‘soft constraints’ was easily challenged or set aside in the face of short-term performance. The new regulation, with clear legal provisions and quantifiable regulatory indicators, gives risk control advice stronger institutional authority. Everyone is actively learning the new rules and cooperating to advance related work. This change boosts our confidence in future mechanisms running smoothly.”

Operationally, balancing the constraints of benchmarks with the flexibility of fund managers’ investment strategies under the new regulation has become a common industry exploration topic.

The person said: “Currently, our company has established a basic institutional framework—defining monitoring indicators, setting tiered thresholds, and formalizing correction procedures. The investment team understands and is willing to explore within the new regulation’s scope, working with risk control to find a balance that maintains bottom-line safety without stifling professional judgment.”

As the official ringing of the Guidelines approaches, the industry’s “big test” has begun. As a person at China Post Venture Capital Fund put it: “The ultimate goal is to make performance benchmarks truly an ‘anchor’ for investment behavior and a ‘ruler’ for performance measurement, so that investors benefit. This is the shared direction for industry efforts.”