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The central government released a long-expected
regulation yesterday to allow some pilot
commercial banks to launch fund
management companies, clearing the major policy obstacles for the reform.
The regulation, jointly issued by the China Banking Regulatory
Commission (CBRC), the People's Bank of China (PBOC) and the China
Securities Regulatory Commission (CSRC), will enable commercial banks to
step into the securities investment business, a major breakthrough in the
segregated regulatory scheme of the banking, securities and insurance
sectors.
Before, domestic banks could only sell funds or provide custody
services, but were not allowed to take part in investment sales.
The regulation clarified application procedures
for commercial banks that want to set up fund management companies and
also set guidelines to regulate risk controls, affiliated
trade and the daily operations of new
fund companies.
Banks that are interested in investing in the fund management business
should first apply to the CBRC and PBOC and then undergo examination of
CSRC to receive licenses.
The regulation said the fund companies initiated by the commercial
banks should have diversified equity structures. CBRC officials said
earlier that domestic banks are encouraged to introduce foreign strategic
investors to jointly invest in the fund management companies and domestic
private investors can also participate.
A number of commercial banks have already submitted initial
applications to invest in the fund management business, a spokesman for
the three financial regulators said yesterday. He said the regulators
would start reviews of applications very soon. They would take the
performances of the banks into consideration when choosing the pilots, who
can either directly launch a new fund company or have their subsidiaries
invest in the company.
Senior officials of the Industrial and Commercial Bank of China and
China Merchants Bank, two promising candidates for the pilot programme,
have expressed interest in the fund business and said they will implement
their plans once the official procedures and standards are clarified.
Though the innovation is expected to bring new profits for banks, the
potential risks remain a common concern. The new regulation also said a
bank can not provide custody for the funds issued by its own fund
management company.
(China Daily) | 
Updated: 2005-02-21 14:40
