SHANGHAI (Reuters) - China’s securities regulator has suspended approval of Hong Kong-focused mutual funds, according to the industry newspaper China Fund, potentially slowing the pace of Chinese money into Hong Kong stocks.
New funds with “Hong Kong” in their names - which rules dictate must allocate at least 80 percent of their portfolio into Hong Kong-listed stocks - have seen their approvals suspended by the China Securities Regulatory Commission (CSRC), China Fund said on its website, citing two unidentified fund sources.
The move could delay the launch of 59 products that are backed up in the queue, although funds that invest less than 50 percent of their portfolio in Hong Kong will not be affected, according to the newspaper, which is affiliated with the official People’s Daily.
The sources, who were notified by the CSRC, said the body did not explain why it was suspending Hong Kong-focused funds. But they speculated that regulators may hope to cool fervor in a market .HSI that has soared over 30 percent this year, aided by Chinese money inflows, according to the newspaper.
Reporting by Samuel Shen and John Ruwitch; Editing by Shri Navaratnam