China has moved to revise the current law on securities
investment funds, in an effort to loosen regulations on the fund
industry, said Wang Lianzhou, a lawmaker working on the law,
according to Shanghai Securities News.
Talking about the current mutual fund law, Wang also said it is
outdated and hinders the fund markets from further opening and
evolving.
The revisal will stress protecting fund investors' interests and
making the fund industry more market oriented, Wang revealed.
The curbs on fund management firms' engagement and business
scopes, as well as equity forms and shareholding structures, are
all expected to be revised.
According to current law, fund capital cannot be used for
purchasing fund management firms' or fund undertakers' own shares
or bonds. The upcoming changes may remove such limits.
In addition, fund management firms may invest in gold futures,
stock index futures, forex futures, and individual financing funds,
and are no longer confined to stocks and bonds transacted in the
bourses only, said Wang.
Wang is from a panel of experts in investment fund legislation
under the National People's Congress' Financial and Economic
Affairs Committee.
When China's first securities investment fund law came into
effect on June 1, 2004, the total size of the mutual fund industry
in China was just 200 billion yuan ($27.55 billion), but it had
expanded to 3.27 trillion yuan by the end of 2007.
(China Daily January 11, 2008)
