China Signals More Support for Banks to Set Up Fund Management Units
What’s new: China’s top securities regulator pledged to further expand mutual fund managers, increase policy support and guidance to the industry, and continue to encourage commercial banks to set up fund management units.
Comments by Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC), signal that more banks may enter the mutual fund sector for the first time in nearly four years. Yi made the remarks at a recent event for National Investor Protection Day.
The background: Since the CSRC and China’s banking regulatory commission unveiled related rules in 2005, 15 fund management units have been established with commercial banks as controlling or participating shareholders. But no new such business was approved since July 2016 when Hang Seng Bank and Shenzhen Qianhai Financial Holdings Co. Ltd. obtained approval to establish a joint-venture fund management company.
Among the 126 mutual fund managers, bank-affiliated enterprises manage 1.9 trillion yuan ($266 billion) of assets, or about 23% of the industry, according to Citic Securities Co. Ltd.
During the first four months this year, equity mutual funds raised a total of 430 billion yuan, nearly quadrupling the total from the same period last year, Yi said.
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