Beijing liberalises mutual fund market
Mainland brokerages and insurers with total assets of at least 20 billion yuan each will be eligible to sell mutual funds from June 1
Beijing has given the green light to brokerages, insurers, hedge funds, private equity and venture capital groups to launch mutual funds as part of efforts to bolster institutional buying in the stock market.
The decision is expected to introduce more than 50 new competitors to the mutual fund sector as the China Securities Regulatory Commission (CSRC) strives to drive up the key indicators.
The CSRC said in a statement that the liberalisation was aimed at bolstering the growth of the mutual fund sector and the capital market. Brokerages and insurers with total assets of no less than 20 billion yuan each will be eligible to sell mutual funds to the public from June 1, the statement said.
Institutions such as the mainland's hedge funds will also qualify to issue mutual funds if each of them has at least 2 billion yuan of capital under management.
The policy is in line with CSRC chairman Guo Shuqing's determination to support institutional buying in the volatile stock market since he took office in late 2011.
The new rule grants other institutions an access to the mutual fund industry. It will help strengthen the team of institutional investors
Currently, China's 77 mutual fund houses manage a combined 2.89 trillion yuan of funds that invest in stocks and bonds. Mutual funds that can raise capital through public offerings are the major financial institutions focusing on equity investments in China.
