Fund managers can charge extra for early selling

Open-ended fund management companies will be allowed to charge extra fees from the investors who sell within a month after buying in under a new regulation that takes effect on March 15, 2010.

The rules, issued by the China Securities Regulatory Commission, also encourage fund companies to charge commissions when investors do sell, but not when they buy in.

CSRC believes this will give investors an incentive to invest for the long-term, and reduce transaction costs since commissions generally decrease the longer a fund is held.

The regulation also forbids fund companies from handing out a lump sum bonus to their agents after the close of a fund, but allows them to pay a trailing commission, which is pegged to how much money investors keep in their accounts, to the agents.
 

Source: BizChina