The Industrial and Commercial Bank of China (ICBC), China Merchants Bank and Ping An Bank are amongst the first group of banks to receive approval to engage in China’s fund advisory trial scheme.
Domestic media reports that ICBC, CMB and Ping An have all received letters of no objection from the China Securities Regulatory Commission (CSRC), granting them qualifications for mutual fund investment advisory operations under a recently launched pilot scheme.
CSRC first launched the trial scheme for mutual fund investment advisory services in October 2019, allowing managers and distributors to provide bespoke investment options to clients for fees of up to 5% of their net asset value.
Five firms received trial licenses in October, including E Fund Management, China Southern Asset Management, China Wealth Management (a subsidiary of China Asset Management), Harvest Wealth Management (a subsidiary of Harvest Fund Management) and Zhoung Ou Qian Gun Gun (a subsidiary of Zhong Ou Fund Management).
In December CSRC gave licenses to three online mutual fund distributors – Ant Financial, Tencent’s Teng an and Yingmi.
Industry observers say that the trials will serve to expand models for fund advisory services, prompting a transition from the “seller’s investment advisory” model that currently prevails in China, to a “buyer’s investment advisory” model which places greater emphasis upon the interests of clients and is more in-line with overseas practice.