Chinese Regulators Approve the Launch of New Retail Funds in a Bid to Resuscitate the Economy

By: Asia Business Outlook Team | Monday, 28 August 2023

China's securities regulator approved the launch of 37 retail funds over the weekend, part of government efforts to revive a stock market struggling for lift-off in an ailing economy. The move comes on top of a slew of measures to shore up the market, including a stamp duty cut, slower pace of IPOs and lower margin financing requirements.

The newly-approved funds, which will guide fresh capital into the market, include 10 exchange-traded funds (ETFs) that track the small-cap CSI 2000 Index and seven tech-focused ETFs, according to the China Securities Regulatory Commission (CSRC) website. The remaining 20 products are innovative mutual funds that for the first time charge investors floating fees, to be pegged to fund size, performance, or holding period.

The CSRC has promised to expedite ETF approvals and to advise asset managers on how to reduce management and trading fees, among other market-friendly measures.

The CSI300 Index in China rose more than 5% at the open on Aug 28, but it is still down roughly 6% from an April peak.

Late last month, China's leaders vowed to boost investor confidence and revitalise the world's second largest stock market, which has been reeling as the post-pandemic recovery falters and a debt crisis in the property market worsens.