Damaging losses feared for China fund subsidiaries

Observers warn that low capital requirements and weak risk controls among the fast-rising subsidiaries of Chinese fund firms could lead to damaging investor losses. Precisely a year ago the China Securities Regulatory Commission (CSRC) introduced landmark liberalisation to allow fund houses to establish a subsidiary with an expanded investment scope. This was in response to the need for product differentiation and diversification among the nation’s 82 fund firms, which since 200…