August 10, 2026 (InvestinChina.asia) — China’s securities regulator has suspended a fund manager’s ability to register new public-offering products for three months, after an on-site inspection found that the firm allowed thematic funds to “drift” away from their stated investment mandates and hired unlicensed internet influencers — commonly known as “big-V” personalities in China — to sell funds. The case, disclosed in the latest Institutional Regulatory Bulletin issued by the Investment and Institutional Supervision Department of the China Securities Regulatory Commission (CSRC), is being read across the asset-management industry as a deliberate “make-an-example-of” enforcement action ahead of stricter nationwide rules on financial-product online marketing that take effect on September 30.
Two violations, one penalty
The CSRC bulletin identified what it called two core breaches at the anonymised “C Fund Company”:
Non-standard investment operations. Individual thematic funds exhibited “style drift”; management of the thematic style library was irregular; and certain products displayed imprudent investment behaviour and excessive concentration. In the regulator’s words, the misconduct reflected “deviation in business philosophy and functional positioning” — a willingness to chase short-term scale growth at the expense of professional standards and compliance boundaries.
Non-compliant promotion. The company cooperated with MCN agencies to conduct fund sales activities and employed internet influencers who lacked the required fund-sales qualification to carry out those activities.
In response, the CSRC imposed a regulatory measure of rectification plus a three-month suspension of acceptance of public fund product registrations. Accountability was extended personally to the general manager, the deputy general manager in charge of online marketing, the head of the online finance department, and the portfolio managers involved.
First-time signal: “over-concentration” in a single sub-sector is now squarely in scope
The bulletin breaks new ground by explicitly urging managers to avoid concentrating a fund’s assets into a single narrow sub-sector or field within its declared investment direction. In other words, the regulator is putting the phenomenon of “overcrowded positioning” — funds piling into the same hot theme — under direct surveillance, not merely the formal mismatch between a fund’s name and its holdings.
To enforce discipline, the CSRC requires managers to establish a normalised style-tracking and evaluation mechanism, continuously monitor deviation between the portfolio and its performance benchmark, set risk-control thresholds for dynamic monitoring, and trigger mandatory adjustment procedures the moment deviation or concentration exceeds those limits.
For thematic funds, legal documents such as the fund contract and prospectus must define the investment direction with precise, granular language — vague or catch-all wording is prohibited. Where existing products carry ambiguous definitions, managers must coordinate with custodians to amend the documentation through proper procedures without substantively altering the original thematic remit.
Zero tolerance on unlicensed influencer marketing — five banned forms enumerated
The bulletin reiterates a hard line on online marketing: fund managers and fund-sales institutions may not cooperate with unqualified influencers — including internet celebrities, live-stream hosts, financial bloggers, and MCN agencies — to conduct any form of fund-sales activity.
The prohibition covers five specific categories of conduct:
- Promotional publicity for specific fund products;
- Providing purchase links, QR codes, or account-opening links for traffic diversion;
- Fund-portfolio recommendations, rebalancing advice, and copy-trading services;
- Sales-conversion-oriented live streaming, short videos, and community operations;
- Indirect traffic generation built around specific portfolio managers, investment tracks, or investment directions.
Public-interest investor education and knowledge-popularisation cooperation is permitted, but the regulator insists that content be strictly bounded, reviewed by the compliance department, and fully documented — with no disguised sales activity.
On personnel management, the bulletin is blunt: managers and sales institutions must not employ unlicensed internet influencers, hosts, or financial bloggers to conduct fund-sales business. All practitioners must act in the name of their employing institution and may not promote funds or fund portfolios through any network channel in a personal capacity. Independent fund-sales institutions’ staff are barred from holding operating positions at other organisations.
Not an isolated case — D Company drew the same penalty in January
The C Company penalty is the second such enforcement action this year. In January, the CSRC disclosed that “D Company” had illegally conducted internet influencer marketing cooperation, drawing an identical penalty — a three-month suspension of public fund product registrations, with the general manager and the head of the internet business unit also held accountable. The repetition signals that the regulator views these breaches not as isolated lapses but as symptomatic of an industry-wide “scale complex” that prizes short-term asset gathering over professional discipline.
September 30 deadline raises the stakes
The timing of the enforcement is pointed. On April 24, the People’s Bank of China and seven other ministries — including the CSRC, the National Financial Regulatory Administration, the Cyberspace Administration, and the State Administration for Market Regulation — jointly released the Measures for the Administration of Online Marketing of Financial Products. The Measures take effect on September 30, 2026, and state plainly that no organisation or individual outside of financial institutions and their authorised third-party internet platforms may conduct or disguise financial-product online marketing.
Since the announcement, a number of fund managers have already pressed pause on influencer cooperation, but execution has diverged: some have halted only product endorsements while retaining brand-awareness and investor-education collaborations; others have cut ties entirely. Meanwhile, some unlicensed influencers have attempted to circumvent the ban by affiliating with licensed third-party sales institutions — signing labour contracts to appear as “employees” and continuing to produce content, thereby trying to sidestep the prohibition on individuals conducting financial-product online marketing.
The C Company bulletin closes that loophole by demanding that institutions “strictly implement” the forthcoming Measures as well as existing rules on fund-sales institutions, practitioner supervision, and occupational conduct. The message to the industry is that partial compliance, creative structuring, and grey-zone affiliation will no longer shield firms from accountability.
Why this matters
The enforcement action crystallises a broader regulatory posture toward China’s RMB 30-trillion-plus public fund industry: Beijing wants asset managers to internalise long-term, rational, value-investing principles — and it is willing to inflict reputational and commercial pain on high-profile offenders to set the tone.
For investors, the practical implications are threefold. First, thematic funds should henceforth invest in what they claim to invest in, reducing the risk of surprise style drift during market rotations. Second, the elimination of unqualified influencer distribution channels removes a vector through which retail investors were exposed to hyperbolic, misaligned, or outright misleading product recommendations. Third, the explicit discouragement of extreme concentration within a single sub-sector should, over time, moderate the herd-like positioning that has characterised Chinese thematic fund management.
The bulletin concludes with a clear warning: institutions that persist in “hot-topic chasing” on the investment side and “shortcut-taking” on the sales side should expect the same — or sterner — treatment. With the September 30 rule change approaching, the window for voluntary remediation is narrowing fast.