Third-party fund distribution agencies are the &#34;trendsetters&#34; surging ahead in fund sales. According to statistics from the Asset Management Association of China, third-party sales institutions such as Ant Fund and Tiantian Fund have become leading players of significant importance in the fund sales market.
However, when the frenzy for short-term sales collides with compliance, even industry giants may need to seriously reconsider what long-termism truly means.
Recently, the Zhejiang Securities Regulatory Bureau ordered corrections and recorded the incident in the integrity file of the well-known independent third-party distributor, Zhejiang ROYALFLUSH INFO Fund Sales Co., Ltd. This action was primarily due to a series of non-compliant situations occurring during its implementation of fund sales activities.
<h2>Commingling of Business Premises and Shareholders</h2>
As one of the industry's renowned third-party fund distributors, the details of ROYALFLUSH INFO Fund's violations are quite staggering. A close reading of the decision issued by the Zhejiang Securities Regulatory Bureau reveals that the problems exposed by ROYALFLUSH INFO Fund Sales Company this time can be described as &#34;comprehensive,&#34; involving five distinct violations.
The decision states that ROYALFLUSH INFO Fund has commingled personnel and business premises with its shareholders, actual controllers, and related parties, violating Article 36 of the &#34;Administrative Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Sales Institutions&#34; (CSRC Order No. 175).
<h2>Key Personnel Lacking Professional Qualifications</h2>
Additionally, some operations staff, customer service representatives, and key account managers at the company did not obtain fund sales qualifications, violating Article 30, Paragraph 2 of the &#34;Administrative Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Sales Institutions&#34; and Article 17, Paragraph 1 of the &#34;Provisions on the Implementation of the Administrative Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Sales Institutions&#34; (CSRC Announcement [2020] No. 58).
Fund sales personnel must hold relevant certificates to avoid the situation of &#34;working without a license.&#34; For a well-known third-party institution, this flaw is indeed quite surprising.
<h2>Failure to Incorporate Fund Sales Retention Scale into Assessments</h2>
When assessing certain positions, ROYALFLUSH INFO Fund failed to include metrics such as fund sales retention scale in its assessment system, violating Article 30, Paragraph 1 of the &#34;Administrative Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Sales Institutions.&#34; This requirement has been repeatedly emphasized by regulators and the association.
Specifically, the relevant management measures require: Fund sales institutions shall establish and improve an internal assessment mechanism for fund sales business, adhere to the core concept of investor interests and long-term investment, and incorporate fund sales retention scale, long-term investment returns for investors, etc., into the assessment and evaluation indicator system for branches and fund sales personnel. They should also increase incentive arrangements for the continued sales of existing fund products and regular fixed investments. They shall not use fund sales revenue as the primary assessment indicator, shall not implement short-term incentives, and shall not apply special assessment incentives specifically for subscription-period funds.
<h2>Failure to Classify Product Risk Levels</h2>
Furthermore, ROYALFLUSH INFO failed to conduct prudent investigations and risk assessments for fund managers and fund products, and did not classify risk levels for certain sold products, violating Article 27, Paragraph 1 of the &#34;Administrative Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Sales Institutions&#34; and Article 15 of the &#34;Measures for the Suitability Management of Securities and Futures Investors&#34; (CSRC Order No. 202).
It also failed to establish a conflict of interest assessment mechanism for private fund sales, failing to assess conflicts of interest for private fund managers with which it has a relationship and their private funds, violating Article 48 of the &#34;Administrative Measures for the Supervision and Administration of Publicly Offered Securities Investment Fund Sales Institutions,&#34; among other circumstances.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f6eea5a4-d73e-475c-8c80-adfb961c7109.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f6eea5a4-d73e-475c-8c80-adfb961c7109.png"/>
The document indicates that the Zhejiang Securities Regulatory Bureau imposed administrative regulatory measures on ROYALFLUSH INFO, ordering corrections and recording the incident in the integrity file. The bureau required the company to attach great importance to the matter, strictly align with relevant laws and regulations on fund sales, take effective measures to implement rectification, strengthen the management of fund sales business, and submit a written rectification report within 30 days.
<h2>From &#34;Traffic Monetization&#34; to &#34;Wealth Management&#34;</h2>
The aforementioned issues may indicate that while pursuing scale expansion, third-party sales institutions still need to further strengthen internal system construction and compliance management, placing investor interests in a more prominent position.
According to data from the association, in the second half of 2025, the equity fund retention scale of Zhejiang ROYALFLUSH INFO Fund Sales Co., Ltd. reached 34.5 billion yuan, ranking 33rd among fund sales institutions. Additionally, the non-money market fund retention scale was 56.4 billion yuan. Both the aforementioned data and rankings represent further progress compared to the first half of 2025.
Perhaps, facing the huge potential market, third-party institutions, while doing well in traffic monetization, must relearn the essence and intrinsic requirements of wealth management.
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The Zhejiang Securities Regulatory Bureau imposed administrative regulatory measures on the well-known third-party fund sales institution, Zhejiang ROYALFLUSH INFO Fund Sales Co., Ltd., due to multiple violations in fund sales, including commingling of business premises with shareholders, some employees lacking professional qualifications, and failure to incorporate fund sales retention scale into the assessment system. These issues reflect the institution's neglect of compliance in pursuit of short-term sales volume

Personnel and Premises Commingling, Sales Over Retention? Renowned Fund Sales Institution Receives Penalty