China’s securities regulator states mutual funds must be assessed for their level of risks before they are offered to investors.

The China Securities Regulatory Commission said fund ventures can conduct the evaluations themselves or get independent ratings agencies to compile risk reports on their products.

Guidelines suggest the fund products should be graded according to three levels of risks: low, middle and high.The risk assessment must include the fund’s investment scope and the investment proportion in each type of securities products.

Nearly a dozen new funds have been marketed in July and August, raising a combined capital of more than RMB60 billion($7.93 billion).

Mainland fund managers raised RMB193 billion through 24 mutual funds in the first half of this year, against RMB195 billion through 49 products a year earlier. The drop in numbers can be attributed to the CSRC controlling the pace.

The CSRC in August ordered fund management firms NOT to sell their products through a pre-registration mechanism to take advantage of strong investor sentiment in the stock market. That means a fund venture can’t require investors to register with sales agents and have their subscription money frozen before it officially launches a fund product.
Source: Shanghai Daily