The China Securities Regulatory Commission (CSRC) has unveiled interim regulations for the use of fund management companies’ self-owned capital.
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According to the regulations, no specific restrictions will be imposed on fund managers’ investment options, with expected guidelines to be offered by securities regulators.
Chinese policymakers also specified various conditions when fund management companies should suspend investments with their self-owned capital. In addition, a number of risk control methods were identified for self-owned capital management.
The regulations stated that fund management companies will be allowed to invest in financial assets and equities related to asset management businesses, with the share of investments in high-liquid assets (including cash, bank deposits, government bonds, and funds) no less than 50%. However, fund management companies will be prohibited from investing in publicly-traded stocks, futures, and other derivatives with their own funds.
Furthermore, the regulations encouraged fund management companies to use self-owned funds to purchase publicly offered funds and customer-tailored asset management schemes managed by themselves, or buy investment portfolios managed by their subsidiaries, with the aim of creating a mechanism that promotes the sharing of risks and profits.
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By GlobalData
