China warns fund houses on broker deals

Regulators put in a quiet word over linking trading agreements to mutual fund distribution.

The Chinese Securities Regulatory Commission CSRC has reportedly warned fund management companies against linking distribution of mutual funds via securities companies to agreements on broking trades.

According to some fund management executives, in the past few weeks the CSRC has read the riot act to fund houses behind closed doors. Its concerns were sparked by record-sized fund launches in March which saw some fund houses, including newcomer Citic Trust and joint venture Fortis Haitong Investment Management, raise up to Rmb13 billion, far surpassing previous deals. Shenyin Wanguo BNP and SGAM Fortune Trust also introduced successful products at that time, and March and April saw a total of Rmb91.2 billion $11.4 billion...

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