6 On June 10, China Securities Investment Fund Association (hereinafter referred to as "China Asset Management Association") issued the "Guidelines for Performance Appraisal and Remuneration Management of Fund Management Companies" (hereinafter referred to as the "Guidelines"), which regulates the salary structure and salary payment. , performance appraisal, salary internal control management and other aspects have put forward specific requirements.
Industry insiders said that the "Guidelines" further refines the performance appraisal and salary management rules of fund companies, which is conducive to improving the long-term incentive and restraint mechanism of the fund industry, and achieving the consistency of the long-term development of employees and the company, and the long-term interests of fund share holders. It will promote my country's public fund industry to further achieve high-quality development.
Follow the four major principles
The salary system is an important part of corporate governance. Building a scientific and reasonable salary system is the basis for maintaining the core competitiveness of the industry and the basis for maintaining the steady and sustainable development of the industry.
China Fund Management Association stated that in order to standardize the performance appraisal and salary management behavior of fund management companies, improve the long-term incentive and restraint mechanism of the public fund industry, and promote the sound operation and sustainable development of fund management companies, the association shall draw on domestic and foreign regulatory experience in accordance with relevant laws and regulations. , combined with the actual development of my country's fund industry, the "Guidelines" were formulated.
It is worth noting that in the "Opinions on Accelerating the High-Quality Development of the Public Fund Industry" issued by the China Securities Regulatory Commission on April 26, it was pointed out that fund managers should be urged to establish and improve core employees such as operating management and fund managers. The long-term assessment mechanism will include compliance and risk control levels, long-term investment performance for more than three years, and actual investor profits into the performance assessment scope, and weaken the assessment proportions of indicators such as scale ranking, short-term performance, revenue and profit. In addition, the "Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Managers" issued by the China Securities Regulatory Commission on May 20 also proposed that efforts should be made to improve the governance of fund management companies and comprehensively build a long-term incentive and restraint mechanism.
Industry insiders pointed out that the "Guidelines" are specific requirements for the implementation of the "Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Managers" and the "Opinions on Accelerating the High-Quality Development of the Public Fund Industry" and are conducive to improving the long-term incentive and restraint mechanism of the industry. Improve the public fund industry's ability to serve the reform and development of the capital market, serve residents' wealth management, serve the real economy and national strategies.
Specifically, the "Guidelines" include 7 chapters and a total of 22 articles. The so-called performance appraisal refers to the assessment and evaluation of the work effectiveness and contribution of its employees by fund management companies to determine employee positions, grades, and salaries. , honors and other results; the so-called remuneration refers to various monetary and non-monetary forms of economic remuneration given by fund management companies in exchange for the services and contributions provided by its employees.
The "Guidelines" propose that fund management companies' performance appraisal and salary management should follow four principles: First, it is oriented to give priority to the interests of fund share holders and the company's long-term sustainable development; second, it can effectively motivate employees and establish high-quality Talent team is conducive to preventing risks and improving compliance levels; third, balancing the interests of employees, managers, shareholders and other stakeholders is conducive to the company's fulfillment of social responsibilities and improving its ability to serve the real economy and national strategies; fourth, it is in line with my country's national conditions, policy orientation and development reality of the fund industry.
Deng Haiqing, chief economist of AVIC Fund, said that the release of the "Guidelines" will help build a long-term incentive and restraint mechanism for fund companies and reverse some of the chaos in the current assessment system. The abnormal values that exist in some fund companies in the market include fund grouping, short-term hot spot speculation, ranking theory, and "if you don't open for three years, you will have to wait for three years if you open for three years." These abnormal values are all related to the short-sighted incentive and restraint mechanism. Building the long-term incentive mechanism will help avoid unhealthy tendencies such as excessive pursuit of short-term rankings in fund investment, amplification of market fluctuations, and speculation of short-term gimmicks. It will guide fund companies and fund managers to focus on the field of investment research and achieve long-term steady appreciation of entrusted assets.
Guide to long-term assessment
In order to allow fund companies and fund managers to put investors' long-term returns in an important position, the "Guidelines" require fund management companies to adopt a combination of quantitative and qualitative methods to determine performance evaluation indicators.Performance assessment indicators should include economic benefit indicators , compliance risk control indicators and social responsibility indicators. Economic benefit indicators should reflect long-term assessments of more than three years, actual profits of investors, investment research and other professional capacity building; compliance risk control indicators should include the construction of compliance and risk management mechanisms, compliance events or occurrence of major risks situation, the safe operation of information systems, and the integrity of employees; social responsibility indicators should include ethical standards, corporate value, customer satisfaction, etc.
The board of directors' assessment of managers and the company's assessment of key positions such as investment research and sales should be based on long-term investment performance, investors' long-term investment returns, compliance and risk management, professional ethics, etc., and should not be based on scale rankings, management Fee income, short-term performance, etc. are used as the main basis for salary assessment.
long-term investment performance refers to the investment income in the last three years or more. Fund management companies should comprehensively consider risks and returns based on investment objectives, investment scope, investment strategies, etc., and in conjunction with performance comparison benchmarks. Relevant assessments should avoid using a single indicator and weaken relative rankings. If the fund manager has managed the fund for less than three years, the impact of the fund's investment performance in the assessment can be weakened by appropriately reducing the weight of relevant performance.
Wang Yifeng, chief analyst of the financial industry of Everbright Securities , said that most fund companies in the market currently have a one-year assessment mechanism. This "Guidelines" clearly uses the long-term investment performance of funds as the core assessment indicator, which is conducive to motivating fund managers to focus on long-term performance. returns and enhance the long-term return rate of the fund.
"Long-term investment performance assessment is conducive to improving the stability of fund performance, reducing fluctuations, and is conducive to improving the money-making experience of Christians. In the future, the returns on long-term investment of Christians will be more objective. However, the specific details of the long-term assessment need to be further clarified , it is recommended that phenomena such as fund style drift and high turnover rate of and be further regulated and included in the assessment points," Deng Haiqing said.
Chen Li, chief economist of Sichuan Finance Securities , said that for investment, medium and long-term value investment is the main direction advocated. Similarly, the assessment of remuneration and incentives should also focus more on the long-term. The introduction of the "Guidelines" The relevant requirements for the remuneration structure of public funds have been put forward in a targeted manner, which will guide fund managers to adhere to the concepts of long-term investment and value investment, and effectively play the role of "stabilizer" and "ballast stone" in the capital market.
Further protect investors' income
In recent years, "funds make money but not the public" has become a stubborn disease that affects the high-quality development of public funds. This time the "Guidelines" put forward requirements such as deferred payment of performance compensation and self-purchasing of the company's funds, which deeply binds the interests of fund managers and basic citizens. Investors' income is expected to be further protected, and investors' trust in public funds will also increase. promote.
The "Guidelines" propose that fund management companies should establish and implement a deferred payment system for performance remuneration and clarify the scope, period and proportion of applicable personnel. The deferred payment period and deferred payment amount of performance compensation should be consistent with the long-term interests and business risks of fund share holders, and the deferred payment period should be no less than 3 years.
At the same time, the scope of applicable personnel for the performance-based remuneration deferred payment system includes but is not limited to the chairman of the board, senior managers, heads of major business departments, heads of branches and core business personnel. Among them, in principle, the amount of deferred payment for key positions such as senior managers and fund managers shall not be less than 40%.
In this regard, Deng Haiqing believes that some fund products currently on the market have good short-term performance or periodic performance, but poor long-term performance. Fund managers are more "gambling" and do not pay attention to long-term stable investment returns. The investment experience of citizens is not good. good. Clarifying the deferred payment of performance-based compensation will help prevent investment researchers from excessively pursuing short-term performance and short-term rewards, amplifying long-term risks or leaving risks to the future. It can also reduce the frequent turnover of fund managers and executives.
It is worth noting that in the context of the rapid development of private equity funds , more and more fund managers have chosen to "run private equity" in recent years. Some fund managers, after becoming famous with their short-term performance, quickly turned around and "run private" , caused a great shock to the industry, and the frequent changes of fund managers further aggravated the phenomenon of "style drift" in products, causing damage to the interests of investors.
As of the end of May, more than 100 public fund managers have resigned this year. In order to solve the problem of frequent changes in fund managers and the continuous loss of talents, the "Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Managers" and its supporting rules previously issued by the China Securities Regulatory Commission have clarified that public fund managers shall establish a quiet period system for employee resignations. Fund managers and other major investment research personnel are not allowed to engage in non-public fund investment management and other work within one year after leaving the company.
Industry insiders said that the requirement for deferred payment of performance remuneration put forward by the "Guidelines", coupled with the previously proposed requirement that fund managers must have a one-year quiet period to "leave private companies", means that the cost of fund managers changing jobs will increase significantly. , which plays an important role in improving the stability of the talent team in the public fund industry and protecting the interests of investors.
In addition, the "Guidelines" also put forward performance-based compensation requirements for fund company executives and fund managers. Specifically, senior managers and heads of major business departments should purchase no less than 20% of the current year's performance remuneration for public funds managed by the company, of which the purchase of equity funds must not be less than 50%, but the company does not have equity funds, etc. Except for circumstances; fund managers shall spend no less than 30% of the current year's performance remuneration to purchase public funds managed by the company, and shall give priority to purchasing public funds managed by themselves, except if they are unable to purchase due to reasons such as the fund they manage is in a closed period. If a fund manager is also a senior manager and the person in charge of a major business department, he shall meet the above requirements at the same time.
Chen Li believes that this time the "Guidelines" put forward rigid requirements for fund managers to "follow the investment" in their own fund products, further binding the interests of fund managers and the people, and can better constrain the behavior of fund practitioners. Behavior will also strengthen the protection of the interests of fund holders and realize risk sharing between the two. (Reporter Ma Chunyang)
Source: Economic Daily
