Date
18 October 2017

China to tighten rules on money market funds, report says

Chinese regulators plan to take measures to tighten supervision over money market funds, including raising capital requirements for fund operators to mitigate risks, news website Caixin.com reported Wednesday. At present, online money market funds, such as Alibaba Group Holding Ltd.’s Yu’e Bao and similar products launched by Baidu Inc. and Tencent Holdings Ltd. (00700.HK), have agreed with banks to waive interest penalty on customers should they withdraw their funds prematurely. Regulators are concerned that if such an offer from banks is canceled in the future, it could post capital pressure on fund operators, the report said. As of the end of January, money market funds in China are worth nearly 1 trillion yuan (US$163.215 billion), accounting for one-third of the entire fund industry.

– Contact HKEJ at digest@ejinsight.com

EL/AC/CG

 

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