On August 19, the Asset Management Association of China ("AMAC") promulgated the Code of Conduct for Fair Competition in the Sale of Publicly Offered Securities Investment Funds (the "Code") with immediate effect.
The Code consists of 15 articles, proposing requirements for the prevention of commercial bribery and unfair competition in terms of the basic management system, organizational structure, working mechanism, approval for activities, financial system, activities of personnel, etc. The Code provides that fund managers and fund sales institutions shall avoid the payment of other fees, payment in kind or of other benefits separately, in a disguised form or secretly in addition to the payment of selling expenses as prescribed in the laws and regulations. According to the Code, fund managers and fund sales institutions shall conduct inspection and correction of their own sales activities in violation of the Code and report such inspection and correction to the AMAC in a timely manner; and where the relevant institutions or individuals find violations of other institutions, they shall also submit a report to the AMAC.