Investing.com — China’s securities regulator said it is preparing a new reform plan for the fund management industry aimed at improving long-term returns, lowering fees, and strengthening oversight of market activity, according to a statement published Saturday.

China Securities Regulatory Commission Chairman Wu Qing said regulators are studying a three-year action plan to implement new State Council guidelines governing the private fund sector. 

The initiative will form part of a broader “1+N+X” regulatory framework covering market entry, supervision, risk management, and industry development.

The proposed reforms are designed to accelerate the industry’s shift toward generating sustainable returns for investors. 

Key measures under consideration include reducing fund fees, standardizing performance benchmarks, and improving evaluation systems used to assess fund managers.

The comments highlight Beijing’s efforts to improve the quality of China’s asset management industry as authorities seek to attract long-term capital and strengthen confidence in domestic financial markets.

Algorithmic trading was also a focus of Wu’s remarks. He noted that quantitative funds, foreign investors, public funds, and other market participants are increasingly using automated trading strategies across China’s capital markets.

Regulators have already introduced a range of measures targeting algorithmic trading, including trade reporting requirements, enhanced market surveillance, and tighter oversight of unusual trading activity. 

Additional steps are being considered to improve market fairness and curb illegal practices such as manipulation and disorderly trading.

China’s fund industry has expanded rapidly in recent years. According to Wu, stock investments held by funds have increased 41% over the past five years to 13.4 trillion yuan ($2 trillion).

Fund holdings now account for 13.7% of the free-float market value of China’s A-share market, underscoring the growing influence of institutional investors in the country’s equity markets.

The latest reform push comes as Chinese authorities continue efforts to deepen capital market development, improve investor protections, and encourage greater participation from long-term institutional investors.