The new “fund industry court” in Beijing is “epochal” in raising the professional standards and efficiency of financial industry legal cases, said Asset Management Association of China (Amac) chairman Hong Lei, in a statement.
According to the statement, the move follows international practice of industry-focused courts, which are similar to commercial dispute courts in other countries.
Fund complaint surge
The court was set up in response to the increase in complaints about the fund industry.
Amac received 1,454 complaints last year, more than double from a year ago, it said. A total of 96% of them are related to ‘private funds’, or those non-retail focused funds such as hedge funds, private equity and venture capital funds, mostly on non-compliant operations, illegal fund raising, and insufficient disclosure of information.
The new court will handle all cases related to the fund industry, including mutual funds and private funds. They include disputes between the fund houses and investors or lenders, or problems arising from fund managers’ operations.
It also aims to simplify the complaint filing process and boost efficiency, as well as set up services from consultancies and choose professionals for the jury, said state-run media Securities Times.
The court aims to “become a professional trial base for fund-related or financial-related cases”, the statement noted.
The Amac did not respond to request for comments.
Central bank and fintech
In a separate announcement, the Chinese central bank has set up a fintech committee aiming to strengthen fintech-related research, planning and cooperation.
“The People’s Bank of China (PBoC) will conduct research on the impact of fintech on monetary policies, financial markets, financial stability, as well as payment and clearing, and set the development strategy and regulatory guidance on fintech,” according to its announcement on Monday.
The central bank will step up cooperation with other countries, it added.
It will also make use of regulatory technology, or regtech, and other means such as big data, artificial intelligence, cloud computing to identify, resolve and guard against financial risks.
According to state-run CCTV, the PBoC will announce guidelines on bitcoin trading and its anti-money laundering measures in June.
Against the background of tightening regulatory scrutiny of financial institutions such as banks, fund houses and insurers, state-run news agency Xinhua noted: “Under the broad theme of deleveraging and risk management, the markets can get stressed and it is hard to avoid market volatility.
“It is necessary to oversee risks and supervise the loosely-regulated [participants] for a healthy market, but we can’t trigger new risks for the sake of managing the risks.”
