BEIJING, June 26 (Xinhua) -- China's top legislature on Tuesday started to review a draft amendment that would impose new regulations on the country's privately offered funds, a move aimed at preventing illegal fundraising and trading.
This was the first opportunity for lawmakers to debate the draft amendment to the Law on Securities Investment Funds submitted to the National People's Congress (NPC) Standing Committee.
The funds law went into effect in June 2004, but did not bring China's emerging privately offered funds under supervision, resulting in increasing risks to the country's financial system and social stability.
"Some managers of privately offered funds conduct illegal fundraising activities by borrowing in the name of private funds, harming investors' interests by not imposing strict supervision on the managers," Wu Xiaoling, vice chairperson of the NPC's Financial and Economic Committee, said when briefing the lawmakers.
"Without specific supervision over privately offered funds, rogue trading and insider trading by managers will be rampant despite crackdown campaigns."
Li Xuli, a former key manager of the Bank of Communications Schroder Fund Management Co., Ltd., was arrested and charged as a rouge trader who caused investors to lose more than 10 million yuan.Source: Xinhua【1】 【2】