CSRC said to be revamping fund rules

By Wang Jiamei in Shanghai Source:Global Times Published: 2013-5-2 22:13:01

The China Securities Regulatory Commission (CSRC) has recently been at work revising a number of regulations intended to support soon-to-be-implemented fund laws, the China Securities Journal (CSJ) reported Thursday, citing an anonymous source from a publicly placed fund.

Changes will soon be forthcoming to regulations pertaining to information disclosure, executive supervision and management of publicly offered funds in order to ensure compatibility with revised fund laws approved last year, the CSJ reported.

The laws referred to by the newspaper are the amended Securities Investment Fund Laws of the People's Republic of China, which were passed on December 28, 2012, by the Standing Committee of the National People's Congress. This raft of legislation contained several major amendments which will both bring privately placed funds under regulatory oversight and simplify existing rules governing publicly offered funds.

With these laws set to take effect on June 1, 2013, China's securities regulators are expected to roll out the above-mentioned regulations within the coming month.

Specifically, the CSRC will introduce more stringent disclosure requirements covering turnover ratios of fixed-income instruments and equity funds to the country's Regulations for Information Disclosure Management of Securities Investment Funds, the CSJ's unnamed source revealed.

"By and large, the stricter disclosure standards probably won't affect the management of stock or other securities funds too drastically because there are still no corresponding policies in place which would, for instance, restrict excessively high turnover rates," Qiu Yanying, chief strategist with TX Investment Consulting Co, told the Global Times Thursday.

Yet, from a regulatory perspective, Chinese security authorities may be tightening transparency regulations as their way of encouraging brokers to  keep their turnover ratios in check, Qiu speculated.

"Statistics show that investment funds with lower turnover ratios typically perform better than products with high ratios," Qiu went on to explain.

Moreover, in a further step toward relaxing regulations which cover publicly placed funds, the CSRC plans to either ease or eliminate qualification examinations for high level fund managers while also adopting more targeted supervisory measures, the CSJ report said.


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