Mutual fund market opens to new parties

China's securities regulator published Sunday interim measures allowing qualified securities brokers, insurance companies and private equity agencies to tap into a mutual fund market worth hundreds of billions of yuan, aiming to boost the capital market by intensified competition.

To be eligible for the mutual fund business, all the new entrants must have good corporate governance, more than three years of experience in asset management, and three consecutive years in the black, the China Securities Regulatory Commission (CSRC) said on its official website Sunday.

Securities brokerage firms and insurers are required to have managed assets of no less than 20 billion yuan, and private equity agencies must have a registered capital of at least 10 million yuan and managed assets of more than 3 billion yuan.

The new entrants will be able to attract more capital into the market thanks to their asset management experience and research and development strength, the CSRC said.

The new regulation indicates intensified competition for the mutual fund market, with the new entrants competing against existing companies.

Mutual fund management companies charge investors management fees for their services.

The total fees received by mutual fund companies were about 21 billion yuan in the first half of this year, according to statistics from Morning Star, a fund consulting firm.

Based on preliminary statistics, 16 securities brokers and 14 insurance asset management companies are qualified, the Xinhua News Agency reported Sunday.