The China Securities Regulatory Commission (CSRC) has imposed a 3 per cent limit on investor's holdings in each of the state-approved funds, to tighten supervision on mutual funds. Those exceeding the limit will be forced to offload their extra holdings via institutions designated by the Shanghai and Shenzhen stock exchanges - depending on the funds' listing venue. The difference will go to state coffers. The CSRC also restricted investments by mutual funds through the same securities firm, limiting mutual funds to conduct only 30 per cent of securities transactions through the same broker within a year. The aim was to further standardise the operations of the mutual-fund experiment, China Securities reported yesterday. Beijing has launched five state-approved mutual funds since March in an attempt to encourage some of the five trillion yuan (about HK$4.65 trillion) in private savings to enter the capital markets. Industry sources said the launch of the second round of mutual funds could start as early as next month, with Shenzhen-based Guoxin Securities taking the lead.