China is moving closer to revising the current law governing the fund management industry, which would involve several amendments, including allowing fund managers to trade equities and derivatives for personal accounts, the Financial Times reported. In late January, the China Securities Regulatory Commission (CSRC) sent a consultation paper – which outlines details of the planned changes in the current fund law – to fund management companies. Some analysts are worried about the negative impact of lifting existing restrictions. “Insider trading is prevalent in the Chinese fund industry and such deregulation will make the situation even worse,” said an analyst at a Shenzhen-based securities firm. The consultation paper says the CSRC will expand its supervision of fund managers to crack down on insider trading, where the commission will have the right to conduct on-site investigations of fund managers and custodian banks.
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