China's regulator continues fund house crackdown

Added 23rd August 2016

The China Securities Regulatory Commission (CSRC) put 73 private fund firms under administrative supervision measures in the first half of this year after illegal or irregular activities were found.

China's regulator continues fund house crackdown

Private fund firms include those non-retail focused private securities funds, private equity funds as well as venture capital funds.

The regulator said it has inspected 305 private fund managers with 2,462 funds totalling RMB 900bn ($135.6bn, £103.2bn, €119.6bn) in assets under management, according to a statement on the CSRC website. Together they represented 14% of the domestic industry.

"The inspection focused on five areas, including financing, asset safety, information disclosure, leverage and the extent to which investors' interest are harmed," CSRC said.

Four firms were suspected of illegal financing activities, while six were found to violate the rules by wrongfully handling the money, and another 65 firms had problems disclosing information properly, the regulator said.

They include two firms in Beijing, five from Shenzhen and six from Shanghai.

The administrative supervision measures could include inquiries, warning letters or suspending the performance of duties.

Meanwhile, five more companies were added to the “lost contact” list by the Asset Management Industry Association of China, which is a list of Chinese asset managers it is no longer able to contact.

The private fund industry has been under a heavy crackdown by the regulators, including license revocation of thousands of managers, and probing on quasi-private funds.

China's regulators hope to weed out the unsustainable fund houses, many of which popped up during the rise in the domestic stock market last year.

There are 16,467 private fund firms as of July this year, down by about half (7,627) from a month ago, according to the AMAC data. Still, assets under management of the total number of funds (36,829) reached RMB 7.47trn last month, up from RMB 6.93trn in June.

A similar crackdown is also occuring in the wealth management industry, but Noah Holdings believes it will create a more robust industry in the long run.

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address


US equities: If you can’t beat them, join them

US equities: If you can’t beat them, join them...

European investors have been dismissing US equities as too expensive for a couple of years. But as the S&P 500 continues to outperform other equity markets, appetite for the asset class is again on the...


Ashburton International
Ashburton International

Ashburton Investments is a new generation investment...



Future Advisory Forum Hong Kong 2016
Future Advisory Forum Hong Kong 2016

Tuesday 4th October 2016

Hong Kong

Future Advisory Forum Singapore 2016
Future Advisory Forum Singapore 2016

Thursday 6th October 2016


Offshore Bond Workshop Manchester 2016
Offshore Bond Workshop Manchester 2016

12th October 2016
The Midland, Manchester

Future Advisory Forum Cape Town 2016
Future Advisory Forum Cape Town 2016

Tuesday 18th October
The Vineyard, Cape Town

Investment Strategy

Sponsored Content