Scrutiny on $9.3-trillion fund industry tightened

China's top securities regulator pledged on Monday to crack down on mismanaged private funds and weed out fake ones, as the government becomes more assertive in dealing with an industry worth 60 trillion yuan ($9.28 trillion).

China has been seeking to channel more household savings into the capital markets to fund innovation and aid its economic recovery, while reducing the economy's reliance on bank lending.

Fund managers should align their interests more closely with investors, and refrain from hyping their products, Yi Huiman, chairman of the China Securities Regulatory Commission said.

“China is actively promoting high-quality growth of its capital markets, and healthy development of the 60 trillion yuan fund industry is a crucial part of it,” Yi told a meeting held by the Asset Management Association of China.

Chinese mutual fund managers also face rising competition from global asset managers such as Blackrock and Fidelity International after regulators scrapped foreign ownership in the sector.