The securities regulator of China has stressed the investor interests’ protection during online sales of mutual fund products. Deng Ke, the spokesperson for the China Securities Regulatory Commission during a press conference said that online fund sales should enable the security of investors’ capital, as well as prevent investors from being misled.
Deng went on to say that fund companies must implement the principle of appropriateness in sales, or ensure that fund products’ risks are aligned with the risk tolerance of investors. The remarks of Deng also focused on emerging problems related to misleading advertisement in online fund sales, in addition to the increasing growth in Internet finance since the middle of 2013.
Alipay, the most popular online payment platform in China teamed up with Tianhong Asset Management Co in order to create Yu’E Bao, which is a product that enables Alipay users to transfer their balance into a mutual fund account in order to make a profit. Soon after its debut, Yu’E Bao managed to attract a huge number of users due to Alipay’s massive customer base.
By the end of 2013, Yu’E Bao had more than 43 million users with total deposits of 185.3 billion yuan. With this in mind, other internet companies have followed in its footsteps to team up with fund companies.
Photo Credits: Zone Bourse