Fund practitioners will be able to buy and sell funds in a legitimate manner in the future. However, investment types are limited to open-end funds, and closed-end funds are not allowed to invest.

The Fund Department of the China Securities Regulatory Commission issued a notice yesterday to provide detailed regulations on matters related to the investment of securities investment funds by fund practitioners.

According to the notice, fund practitioners refer to practitioners working in the fund custody departments of fund management companies and fund custodian banks.

The notice requires that fund practitioners shall abide by relevant laws and regulations when investing in funds, follow the principles of fairness, openness and impartiality, and shall not use inside information to buy or sell funds, or use professional convenience to seek personal interests. Fund practitioners should establish the concept of long-term investment when investing in funds. The holding period of fund shares shall not be less than 6 months. The notice encourages fund practitioners to make long-term investments through regular quotas or other methods.

While allowing fund practitioners to invest in funds, the China Securities Regulatory Commission requires relevant units to establish corresponding supervision and reporting mechanisms. The notice stipulates that fund management companies and bank custody departments should formulate relevant management systems and submit them to the China Securities Regulatory Commission and its dispatched offices for filing before allowing their fund practitioners to invest in funds. The management system should include the behavioral ethics, investment methods, Clear regulations on investment restrictions, reporting and filing management, and handling of violations.

In addition, fund practitioners investing in funds should fulfill certain information disclosure obligations. Fund management companies shall disclose the total number and proportion of fund shares held by the company's fund practitioners in the fund contract's effective announcement, listing and trading announcement, and relevant fund semi-annual reports and annual reports.

Industry insiders believe that there has been a long-standing call to allow fund practitioners to invest in funds. The lifting of the ban on investment funds has given fund practitioners a legal channel to invest in funds and share in the stock market and China's economic growth. It has also helped to strengthen the awareness of fund practitioners and fund holders that they can only share benefits and bear risks.