CSRC alerts public on Baifa's dodgy sales practices
24 October 2013
News, Asia, China
By Asia Asset Management
The China Securities Regulatory Commission (CSRC) has stepped in on the launch of the country’s first online wealth management product, Baifa, from China’s leading search-engine Baidu and China Asset Management Co (China AMC) after the fund projected a target return of 8%, according to a report from Securities Times.
In response to the media report that projected the return target, the CSRC said on its website that such profit projections infringe on the Law of Securities Investment Funds. Baidu has subsequently clarified that the fund does not guarantee a specific rate of return. Nevertheless, the regulator is demanding Baidu hand over relevant material for examination.
Baifa was initially scheduled to launch on October 28. However, the incident has cast doubts on the timing of the fund’s roll out.
In support of the CSRC statement, iRsearch analyst Wang Weidong told local media that 8% returns are much higher than the usual returns on money market funds.
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