Banks can establish fund management companies

China is allowing selected commercial banks to set up or acquire fund management companies in an effort to boost its depressed capital markets and to reduce the banks' dependence on loans. Banks will be allowed to sell stock, bonds and money market funds on a trial basis, according to the central bank, China Securities Regulatory Commission and the China Banking Regulatory Commission. The rules took effect February 20, and several banks have applied to set up fund companies, according to regulators. Industrial & Commercial Bank of China, China's largest lender, got approval from the banking regulator to set up a fund management unit, the Beijing News reported.