Mutual fund companies should disclose detailed information about
related transactions and elaborate costs and revenues of each
business in their annual reports to make their management more
transparent, according to new rules imposed by the China Securities
Regulatory Commission.
Mutual fund companies are required to release the type, value
and pricing policy of related transactions in their annual reports
and list the parties who have the power to control the funds.
The new rules ask mutual fund companies to report detailed
information about each business, including costs, revenues and
related risks.
The reports should also contain a complete analysis by an
accounting firm and provide explanations for projects which
increase or decrease more than 50 percent in value.
"It aims to lay a firm foundation to help with the healthy
development of the industry and tighten the management of mutual
fund companies," said Sang Yu, an official with the Great Wall Fund
Management Co.
Last year, China's mutual fund industry managed net assets worth
3.27 trillion yuan (US$454.1 billion), nearly quadrupling the 2006
figure of 856.4 billion yuan.
This year, the securities regulator is expected to introduce
stock index futures, a "through train" program and reform of B
shares to create more channels for investors.
The stock index futures will allow investors to sell short for
the first time in the Chinese mainland. The "through train''
program enables investors to buy into Hong Kong equities through a
Bank of China Ltd account in Tianjin, while the planned reform to
merge the hard currency B shares with the yuan-denominated A shares
will consolidate the market.
(Shanghai Daily February 22, 2008)
