Regulators Ban Brokerages and Funds from Shifting Research Costs via Trading Commissions or Indirect Compensation

The latest regulatory notice to brokerages and fund companies reveals that some brokerages have violated rules by covering foreign research expenses on behalf of funds. Addressing this issue, regulators reiterated the following requirements: First, strictly adhere to trading fee management regulations; do not use trading commissions to offset costs for expert consultations, research intermediaries, meetings, tickets, flights, or accommodation that should be borne internally, and avoid indirect compensation through increased commission sharing ratios, additional allocation points, or volume commitments. Second, strengthen full-process management of research activities by implementing a 'one event, one report' and 'one group, one file' system to ensure travel processes are authentic, reasonable, and traceable. Third, enforce financial management systems; do not circumvent rules by creating false expense categories to support excessive, non-compliant, or illegal activities. Fourth, continuously strengthen industry culture foundations and strictly prohibit participation in activities that violate public order, good morals, or professional integrity standards. All institutions must conduct self-inspections, return excessive or improper expenditures, and carry out internal accountability measures. Regulators will include the management of trading commission usage as a key focus for annual on-site inspections. (Cailian Press)