SHANGHAI, Aug 1 (Reuters) - China’s funds regulator circulated draft rules that impose stricter controls over the country’s guaranteed funds, The Economic Observer reported on Sunday.
The move comes amid attempts to clamp down on the country’s poorly regulated fund management sector, which has been dogged by runaway managers and misappropriation of investments.
The Asset Management Association of China (AMAC), the self-regulatory body that oversees private funds, is seeking opinions on a set of draft rules that would prevent some funds from guaranteeing principal, the paper reported.
The draft rules also set limits for fund allocation, and require fund managers to have at least 2 years of experience in managing equity or bond funds, added the paper.
“The new regulations are really strict,” the paper quoted a Shanghai fund manager as saying.
New rules introduced by AMAC which took effect in July, require fund managers to fully disclose their investment risks, review the identities of investors, and set up special accounts to manage capital.
Reporting by Engen Tham and Wang Jing; Editing by Richard Pullin