Group 1 - The "Financial Education Promotion Week" is being conducted nationwide under the guidance of the National Financial Supervision Administration, the People's Bank of China, and the China Securities Regulatory Commission, with a focus on enhancing public financial literacy [1] - The Beijing Financial Regulatory Bureau organized a "Financial Market" event at the Financial Street Shopping Center, where Guangfa Bank's Beijing branch actively participated, providing an engaging financial knowledge experience for the public [1] Group 2 - Guangfa Bank's Beijing branch launched an original educational video titled "National Music Talks Appropriateness," which creatively illustrates the core content of the "Financial Institutions Product Appropriateness Management Measures" using traditional Chinese music instruments [2] - The performance included various musical interpretations to explain key concepts such as product appropriateness management, consumer responsibility, and special protection for elderly consumers [2] Group 3 - A self-composed and performed "Kuaiban" (a form of Chinese storytelling) by Guangfa Bank's Beijing branch employees highlighted financial fraud traps and the benefits of deposit insurance, aiming to raise public awareness about investment risks [3] - The performance emphasized the importance of national policies in safeguarding depositor rights and maintaining financial stability [3] Group 4 - The "Financial Consumer Rights Treasure Account" booth featured an interactive game called "Appropriateness Matching," which was highly popular among participants, combining fun and educational elements to teach about financial product risk ratings and consumer risk tolerance [4] - The booth also included knowledge displays and explanations from financial managers, reinforcing the idea that "the suitable is the best" [4] - Guangfa Bank integrates traditional culture with consumer rights protection in its financial education efforts, emphasizing the importance of consumer rights in its operational strategy [4]

Core Viewpoint - The company is proactively enhancing consumer protection in the insurance sector by implementing a comprehensive consumer suitability management system in response to new regulatory frameworks [1][2] Group 1: Regulatory Framework and Implementation - The implementation of the "Insurance Sales Behavior Management Measures" by the National Financial Supervision Administration in March 2024 marks a significant step in consumer rights protection [1] - The upcoming "Financial Institutions Product Suitability Management Measures" set to be introduced in July 2025 indicates a deeper development phase for consumer rights protection [1] Group 2: Core Initiatives - The company is focusing on three core initiatives: establishing a scientific product grading management system based on product complexity, premium burden, and policy risk [1] - A "Insurance Demand Analysis Questionnaire" is being introduced at the underwriting stage to assess clients' insurance needs, risk tolerance, and premium burden [1] - The company is developing a sales capability qualification grading management system to ensure differentiated authorization for sales products, enhancing the quality of sales services [1] Group 3: Quality Assurance Mechanisms - The company has implemented a three-tier verification mechanism consisting of "dual recording quality inspection + follow-up verification + complaint tracing" to ensure the suitability principle is integrated into every business process [2] - Future efforts will focus on deepening the standard system construction to provide higher quality services that protect consumer rights [2]

Regulatory and Industry Dynamics - The China Securities Association (CSA) has released "28 Measures for High-Quality Development of the Securities Industry," emphasizing the need for effective communication with relevant departments to facilitate more compliant brokerages in obtaining licenses for selling bank wealth management and insurance products, thereby better meeting diverse investor needs [2][5] - The National Financial Regulatory Administration has issued the "Product Appropriateness Management Measures," which will take effect on February 1, 2026. The core of these measures is to ensure a proper match between product characteristics and customer needs [6] - The marketing of bank wealth management products is accelerating towards diversification, digitalization, and precision, while maintaining existing offline channel advantages and actively expanding all-channel layouts [7] Yield Performance - For the week of July 7 to July 13, 2025, cash management products recorded an annualized yield of 1.40%, down 4 basis points (BP) from the previous week, while money market funds reported a yield of 1.22%, down 5 BP. The yield difference between cash management products and money market funds increased by 1 BP [3][9] - The "see-saw effect" between stocks and bonds continues, with various term interest rates generally rising by 2-3 BP, reflecting market expectations of low inflation and ongoing pressure in the real estate sector [10] Break-even Rate Tracking - The break-even rate for bank wealth management products was 0.81% for the week, up 0.07 percentage points, remaining at a low level. The credit spread continued to narrow by 2.33 BP [17] - The break-even rate and credit spread are positively correlated, with a break-even rate exceeding 5% and a credit spread adjustment over 20 BP indicating potential redemption pressure on wealth management products [17] Product Innovation - Xingyin Wealth Management has launched a new index-themed wealth management product, the "Fuli Stock-Bond Index Theme 1M Holding No. 1," which employs a constant proportion allocation strategy between stocks and bonds to help investors maintain discipline and control risk [8]

Core Viewpoint - The new regulation "Product Appropriateness Management" issued by the Financial Regulatory Bureau emphasizes that insurance institutions must understand both the products and the customers to ensure suitable product sales [7][8]. Group 1: Product Appropriateness Management - Insurance institutions are required to match products with customers based on their financial needs and risk tolerance, ensuring that the products sold are appropriate for the customers [14][21]. - The regulation categorizes insurance products separately from other financial products like wealth management, highlighting the unique characteristics of insurance [12][19]. - The management of product appropriateness will be included in the annual consumer protection regulatory evaluation [60][63]. Group 2: Sales Process and Personnel Management - The regulation mandates a tiered sales approach, where life insurance products are classified into five levels, and sales personnel must have the appropriate qualifications to sell corresponding products [27][30]. - Sales personnel are required to undergo continuous training to ensure they understand the products they are selling, and their performance will be evaluated based on compliance and customer feedback, not just sales figures [29][30]. - Financial institutions must not replace customers in assessments or provide misleading information regarding product risks [43][44]. Group 3: Customer Understanding and Risk Assessment - Institutions must conduct thorough assessments of customer needs and financial situations before recommending products, especially for products with floating returns like dividend insurance [54][56]. - If a product is deemed inappropriate for a customer, the institution must advise against purchasing it, and if the customer insists, a written confirmation of understanding the risks must be obtained [50][54]. - Specific conditions, such as annual premiums exceeding four times the household income, require additional confirmation from the customer before proceeding with the insurance [46][54]. Group 4: Regulatory Compliance and Consumer Protection - The new regulation aims to enhance consumer rights protection by ensuring that the sales process is transparent and that customers are well-informed about the products they are purchasing [64][65]. - Financial institutions are required to establish internal systems to support the management of product appropriateness and ensure compliance with the new regulations [61][62]. - Violations of the appropriateness management regulations may lead to regulatory actions against the institutions and responsible personnel [62][63].

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View On July 11, the capital market showed a complex situation. The capital side slightly tightened, the bond market was weakly volatile, the convertible bond market had mixed performance, and the yields of U.S. and European government bonds generally increased. There were also significant events in domestic and international policies, as well as price changes in commodities [1]. 3. Summary by Directory 3.1 Bond Market News - **Domestic News** - The Ministry of Finance requires state - owned insurance companies to implement long - cycle assessment from 2025, adjusting ROE and capital preservation and appreciation rate to "annual + three - year + five - year" indicators [3]. - The Financial Regulatory Administration issued the "Measures for the Suitability Management of Financial Institution Products", which will take effect on February 1, 2026 [4]. - The NAFMII launched a self - regulatory investigation into 6 lead underwriters [4]. - The first batch of 10 science - innovation bond ETFs raised a total of 289.88 billion yuan and will be listed on July 17. Fund companies are preparing for the second batch [5]. - **International News** - Trump announced that the U.S. will impose a 30% tariff on products from Mexico and the EU starting from August 1, 2025, and other trading partners may face 15% - 20% tariffs [6]. - **Commodities** - On July 11, international crude oil futures prices turned up, and natural gas prices continued to rise. WTI August crude oil futures rose 2.8%, Brent September crude oil futures rose 2.5%, COMEX gold futures rose 1.41%, and NYMEX natural gas prices rose 0.24% [7]. 3.2 Capital Side - **Open Market Operations** - On July 11, the central bank conducted 847 billion yuan of 7 - day reverse repurchase operations, with a net investment of 507 billion yuan after deducting the maturity amount [9]. - **Funding Rates** - On July 11, the capital side slightly tightened. DR001 rose 2.00bp to 1.343%, and DR007 fell 2.27bp to 1.472% [10]. 3.3 Bond Market Dynamics - **Interest - rate Bonds** - **Spot Bond Yield Trends**: On July 11, the bond market was weakly volatile. The yield of the 10 - year treasury bond active bond 250011 rose 0.65bp to 1.6660%, and the yield of the 10 - year CDB bond active bond 250210 rose 0.50bp to 1.7430% [13]. - **Bond Tendering**: Information on the tendering of 25 Attached - interest Treasury Bond 12 (re - issuance) and 25 Attached - interest Treasury Bond 10 (second re - issuance) is provided [15]. - **Credit Bonds** - **Secondary Market Transaction Abnormalities**: On July 11, the transaction prices of 3 industrial bonds deviated by more than 10%. "19 Baolong MTN002" fell more than 67%, "H0 Baolong 04" rose more than 122%, and "H1 Bidi 02" rose more than 192% [15]. - **Credit Bond Events**: Multiple companies such as Gome Electric Appliance, Orient Fashion, and Jiaoda Angli announced significant events including new enforcement information, pre - reorganization, and being investigated by the CSRC [16]. - **Convertible Bonds** - **Equity and Convertible Bond Indexes**: On July 11, the three major A - share indexes rose. The convertible bond market was divided, with the CSI Convertible Bond and Shenzhen Convertible Bond indexes rising 0.03% and 0.20% respectively, and the Shanghai Convertible Bond index falling 0.08% [18]. - **Convertible Bond Tracking**: Information on the listing, conversion price adjustment, and early redemption of multiple convertible bonds is provided [24]. - **Overseas Bond Markets** - **U.S. Bond Market**: On July 11, the yields of U.S. bonds across all maturities generally increased, and the yield spreads of some maturities widened. The 10 - year inflation - protected Treasury bond (TIPS) break - even inflation rate rose 3bp to 2.37% [20][22]. - **European Bond Market**: On July 11, the 10 - year government bond yields of major European economies generally increased [23]. - **Chinese - funded U.S. Dollar Bonds**: The daily price changes of Chinese - funded U.S. dollar bonds as of July 11 are presented, including the price changes of bonds of companies such as Ideal Auto and CNOOC [25].

Group 1 - The manufacturing industry of smart consumer devices in China has achieved rapid growth [3] - The national railway construction investment in the first half of the year has maintained a high level of operation [9] - The Ministry of Human Resources and Social Security has launched a seasonal activity for entrepreneurship resource matching services [10] Group 2 - The financial regulatory authority has released the "Management Measures for the Appropriateness of Financial Institution Products" [12]