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Talking about the current mutual fund law, Wang also said it is outdated and hinders the fund markets from further opening and evolving.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)
