for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Banks

China's AMAC disciplines CITIC-linked asset manager for illegal fund pooling

A man stands in front of CITIC bank's branch in Beijing, China, March 23, 2016. REUTERS/Kim Kyung-Hoon

SHANGHAI (Reuters) - China’s funds regulator said it would discipline a CITIC-linked asset manager for operating a prohibited fund-pooling investment scheme.

The Asset Management Association of China (AMAC), the self-regulatory body that oversees private funds, said illegal fund pools could expose investors to major losses from Ponzi-like schemes.

AMAC said on its official website that it would suspend CITIC-CP Asset Management’s permission to engage in new fund business for six months and ordered CITIC-CP to clean up its asset management.

CITIC-CP Asset Management could not be immediately reached for comment.

China’s hedge fund operators can expect more stringent regulation from AMAC in an intensifying crackdown on “Wild East” fraud and illegal money raising, AMAC said in April.

CITIC-Prudential Fund Management owns 55 percent of CITIC-CP’s shares, while CITIC Trust holds the remainder. CITIC Group Corporation [CITIC.UL] is a state-owned investment company.

Reporting by Engen Tham and Samuel Shen; Editing by Eric Meijer

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up