On March 30, the China Securities Regulatory Commission (CSRC) held a press briefing to release a circular, which required fund management companies to use the XBRL model when they publicly disclose the net value of fund assets, as of May 1. The CSRC will release the net asset value data presented by fund management companies on the website: fund.csrc.gov.cn.
An official with the CSRC said forced information disclosure is a part of the system advantages of China’s funds industry, and it enables fund management companies to win the trust of investors. In a bid to strengthen funds information disclosure, the CSRC in 2008 strengthened efforts to improve digital information disclosure of funds. It applied the XBRL (extensible business reporting language) technology to facilitate electronic automatic exchange and intellectual recognition & analysis of funds information, which solved the problem of distribution and utilization of funds information. In the recent three years, the CSRC has released four funds information XBRL models, and completed digital distribution and display of all funds’ regular reports, net asset value disclosure and some provisional announcements. So far, there have been around 510,000 digital documents on the website: fund.csrc.gov.cn, and investors could inquire about more than 950 funds on the website.
As required by the country’s relevant rules, the circular set the format and contents of net asset value disclosure—“table plus mark of words”. That method allies to disclosures of net asset value (except money market funds), yields of money market funds and net asset value of structured funds. As early as in 2009, the CSRC had tried the XBRL model of funds net asset value disclosure. So the latest model is based on the experiences of the past three years. In addition to the regular disclosure of net asset value, the circular also required fund management companies to disclose information of dividend distribution & ex-dividend, so investors can better understand the volatility of the funds net asset value.
The CSRC official said the commission will continue improving digital information disclosure of funds, promoting digital distribution of fund contracts, pushing forward market reform of the fund products approval, and promoting the digital distribution of the second batch of provisional announcements. At the same time, efforts will be stepped up to enhance regulation over information disclosure, prompt fund management companies to improve information disclosure quality, and foster credibility and compliance in the funds industry.