The Chinese Securities Regulatory Commission recently published a set of new rules designed to strengthen the Chinese money fund industry. Its aim is to create a stable foundation for future growth. Aidan Shevlin, Managing Director, Head of Asia Pacific Liquidity Fund Management at J.P. Morgan Asset Management, outlines what this all means for investors.

In Brief

• China’s money market fund industry has grown exponentially in a relatively short space of time. Today, total assets under management (AUM) stand at around RMB 6.5 trillion. The Chinese government has reacted by recognising that the money market fund sector is ‘systemically important’ to the Chinese economy.
  
  
• As a result Chinese regulators have begun to pay more attention to money market funds. Recently, the Chinese Securities Regulatory Commission (CSRC) introduced a host of new measures designed to strengthen the money fund industry by more closely aligning the rules that govern it with international standards, forcing some funds to de-risk.
  
  
• While these new rules are a positive step, enabling the money market fund industry in China to expand in a controlled and secure way, they will also have an impact on investors by bringing to an end the days of very high money market fund returns.

The article was first published by Treasury Today in January 2018

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