Reuters: China regulates fund outsourcing business in fresh move to curb shadow banking: Sec Times

China’s securities regulator has introduced new restrictions for financial institutions seeking to outsource fund management to external fund managers, the official Securities Times reported on Monday, as the government tightens shadow banking.

Financial institutions such as banks and insurers have been giving fund management mandates for funds exceeding 1 trillion yuan ($144.90 billion) to mutual fund houses as they outsource their wealth management operations, the newspaper said.

Regulators are worried that such funds are used as a shadow banking channel by lenders to make risky bets in corporate bonds or equities, without effective management by the external fund house.

The full article is available at http://www.reuters.com/article/us-china-shadowbanking-fund-idUSKBN16R03P?il=0

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