Chinese fund managers have been criticised for apparently breaking rules on the purchase of shares during the listing of Shenzhen Expressway in December, reported the Financial Times. The official in charge of the China Securities Regulatory Commission, Zhang Jinghua, said he was angry that several funds had applied to buy shares with a value in excess of their fund assets. Regulations state that a fund can only use 10 per cent of its net asset value to buy into a single company. Zhang specifically criticised China Fund Management Co, China Southern Fund Management Co and Changsheng Fund Management Co.
One of the reasons behind the recent creation of the fund management industry was to clean up China’s stock markets. In December, the CSRC imposed a Yn503m fine on Zhejiang Securities for stock manipulation, illegally raising funds from clients and using funds for its own use. This was the largest penalty ever imposed by the CSRC.