China proposes rules to regulate private pension investment via mutual funds

A Chinese language nationwide flag flutters close to the constructing of China Securities Regulatory Fee (CSRC) on the Monetary Road space in Beijing, China July 16, 2020. REUTERS/Tingshu Wang/Information

SHANGHAI, June 25 (Reuters) – China’s securities regulator proposed guidelines to control personal pension funding through mutual funds, setting the standards for certified merchandise and gross sales brokers beneath a scheme that can channel recent financial savings into the nation’s capital markets.

The draft guidelines, printed by the China Securities Regulatory Fee (CSRC) late on Friday, got here after Beijing in April launched a milestone personal pension scheme to deal with challenges of growing old inhabitants. learn extra

Underneath the scheme, eligible Chinese language residents can purchase mutual funds, financial savings deposits and insurance coverage merchandise through their very own particular person pension accounts, probably boosting a pension market that has lured international asset managers together with Constancy Worldwide and BlackRock.

The proposed guidelines “have set a comparatively excessive bar for merchandise and establishments, and are designed to make sure security of pension fund funding and defend buyers’ curiosity,” the CSRC mentioned in a press release on its web site.

Initially, pension goal funds with not less than 50 million yuan ($7.48 million) of belongings over the previous 4 quarters are eligible beneath the pilot pension scheme, the CSRC mentioned.

Different sorts of retail funds with clear funding methods and good long-term observe information will likely be regularly added to the eligibility checklist because the scheme expands, the CSRC mentioned.

Presently, there are 91 pension goal funds that meet the CSRC’s standards, in accordance with TF Securities.

As well as, fund managers and gross sales brokers taking part in personal pension enterprise should arrange inside management programs, undertake long-term incentives, and guarantee impartial operation of the pension belongings, in accordance with the principles.

Unbiased consultancies estimate China’s personal pension market will develop to not less than $1.7 trillion by 2025, from $300 billion at present.

In 20 years, 28% of China’s inhabitants will likely be greater than 60 years outdated, up from 10% immediately, making it one of the vital rapidly-aging populations on this planet, in accordance with the World Well being Group.

($1 = 6.6878 Chinese language yuan renminbi)

Reporting by Samuel Shen and Brenda Goh
Modifying by Nick Zieminski

: .