Funds News
- Risk education underscored for mutual fund investors in China
Date: 12-Feb-2007 Sources: (People's Daily)
China's securities watchdog ordered mutual fund managers and sellers to help individual investors better understand the risks involved in buying stocks.
A special investor education fund should be established by each fund management company, said the China Securities Regulatory Commission (CSRC).
On Thursday the industry regulator issued a document on educating retail fund investors to the China Securities Industry Association and fund management companies and banks.
According to the document the awareness program can include advertisements in TV, newspapers and magazines, Internet, publicity pamphlets and outdoor ads.
The education drive should help investors understand their own financial circumstances, better understand markets, along with the development history of funds and fund management companies, according to the document.
Fund sellers are encouraged to make buyers to be aware of the risk.
The CSRC has recently given the go-ahead for five new mutual funds after a two-month suspension in approvals.
The suspension began late last year amid worries that speculators were causing stock prices to rise too fast.
The benchmark Shanghai Composite Index gained 130 percent last year and jumped nearly 10 percent in January before a recent correction took it back to about where it started the year.
Reports show that mutual funds raised more than 400 billion yuan (51.6 billion U.S. dollars) on the Shanghai and Shenzhen bourses last year as retail investors shifted the cash holding from low-interest bank deposits into the markets.
China has more than 320 mutual funds.
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