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China parliament to discuss investment fund law

SHANGHAI: Parliament will discuss China's first law on investment funds late this year, the official Shanghai Securities News reported on Monday.

The law has been under draft since 1998 but dogged by disputes, including how to classify funds, the newspaper quoted Wang Lianzhou, an official of parliament's finance and economic committee, as saying.

There were also disputes over whether a single law should cover all kinds of investment funds, Wang said.

Previous media reports said the draft law would cover the establishment, subscriptions, trade, buy backs and supervision of investment funds and was aimed at helping develop China's fund industry and protecting investor interests, they said.

China has been encouraging the establishment of major investment funds since 1998 to foster a class of institutional investors.

Twenty securities mutual funds have been listed on the Shanghai and Shenzhen stock exchanges with a combined value of more than 50 billion yuan ($6.04 billion).

But China has no joint venture funds in the securities industry and a number of brokerages are waiting for the law to be passes so they can set them up, industry sources say.

China has set up a number of industrial investment funds and venture capital funds, though their scale is much smaller than the securities mutual funds.-Reuters