A vote is expected to be taken by the National People's Congress Standing Committee tomorrow on a draft law covering securities investment funds, Xinhua reported yesterday. 'I suggest the draft law be put to the vote and hope it will be passed as soon as possible,' Jiang Zhenghua, an NPC vice-chairman was quoted as saying. However, the draft law has deleted a provision which would allow fund management companies to obtain short-term financing from banks, Xinhua said. It quoted Fang Xin, a Standing Committee member, as saying: 'The item would cause much more trouble than [bring] benefit to China's fledgling financial market.' The provision was included in an earlier draft which said fund management companies could borrow from banks so that they would be able to pay their clients when they chose to redeem their investment. Supporters of the provision have argued that it will create chaos in the stock market if the fund management companies have no choice but to cash in their stocks when their clients want to sell. Xinhua said China has 31 open-ended funds with 76.3 billion shares. In the first half of the year, investors cashed in 14.18 billion shares forcing the fund management companies to sell their stocks and other equities. But Wang Yiming, a vice-chairman of the NPC law committee, said its studies showed that the management companies were able to pay clients through cash reserves and treasury bond sales. Short-term financing from banks was not the only option. A statement released by the Standing Committee said it was preferable that China maintained segregated management of its financial institutions. Under the law, banks are forbidden to engage in non-banking business such as securities and insurance, to reduce financial risk. The committee feared that banks' funds would find a way into the stock market if short-term financing for fund management companies was allowed. Mr Jiang said it was not the right time for China to lift the restriction.