Securities Regulator Calls for Chinese Banks to Establish Fund Management Companies

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The chair of the China Securities Regulatory Commission (CSRC) says the authority is pushing for Chinese commercial banks to launch their own fund management vehicles.

At the “15 May National Investor Protection Promotional Day” (5·15全国投资者保护宣传日) held by CSRC, CSRC chair Yi Huiman (易会满) said that the authority would “actively create conditions to smooth out channels for various funds – and in particular medium and long-term funds, to enter the market.”

As part of this effort CSRC will “continue to drive commercial banks to launch and establish fund management companies,” as well as seek to further “develop and strengthen the cohort of publicly offered fund managers, and expand policy support and guidance vigour.”

“In the first four months of the year equity publicly offered funds raised 430 billion yuan, for a 3.8 fold increase compared to the same period last year,” said Yi.

“[This] plays an important role for improving market structure and stabilising the market.

“CSRC will support innovation in equity fund products, and further expand fund investment advisory services, in order to better satisfy the wealth management needs of general investors.”

Yang Delong (杨德龙), chief economist with Qianhai Kaiyuan Fund (前海开源基金), said to Securities Daily that as a consequence of the move the “future increase in the number of fund companies in the banking system could lead to an acceleration in competition within the current funds sector, achieving the removal of laggards.”

Data from Wind indicates that as of 17 May a total of 15 Chinese banks have launched their own fund management companies, including five of the big state-owned banks (Agricultural Bank of China, ICBC, Bank of China, China Construction Bank and Bank of Communications), as well as four joint-stock banks (Shanghai Pudong Development Bank, China Merchants Bank, China Minsheng Bank and Industrial Bank Co.).

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