Many foreign fund managers are pinning their China distribution strategies on the WFOE scheme. But the programme's limitations pose familiar problems for scaling the business.
Chinese regulators are putting up unnecessary barriers to fund managers wanting to take advantage of mutual recognition of funds between Hong Kong and the mainland, believe industry experts.
Mainland hedge fund Zexi Investment and its head, Xu Xiang, have been blacklisted – and sources say more big cases are about to break.
Chinese investment industry executives are unhappy about how quickly local regulators have tightened policy on private funds. More clarity would help both domestic and foreign players.
China bond funds are growing at the expense of balanced and money-market products and as institutions increasingly favour 'tailor-made' mutual funds over segregated accounts.
Minsheng Royal Asset Management, the mainland's second biggest segregated-account subsidiary, has received a six-month ban, as Beijing starts consulting on tighter capital rules.