Chinese private investment funds to conduct 'self-inspections' to root out abuses of the system
Checks ordered by the government amid greater oversight of the industry
Chinese private investment funds will conduct a “self-inspection” of their business practices after a directive was issued by the State Council, China’s cabinet, according to a notice posted on the website of the Asset Management Association of China.
The scope of the inspection will cover advertising practices, fundraising from prohibited investors and other banned activities.
The inspection initiative follows a finding by China’s securities regulator that some funds had regularly violated regulations, the association said.
The notice also requested the funds to strengthen their internal risk management and to boost training in awareness of the regulations and firms’ social responsibilities.
China’s finance sector has been under increased regulatory scrutiny following the dramatic stock crash in 2015 which was blamed in part on poor regulatory oversight.
Regulatory attention on irregular fundraising and advertising procedures by private funds and so-called peer-to-peer lending platforms has also intensified this year.