From 1 February, the usual six months limit for new PFM license holders to register a fund for launch has been extended to 12 months, due to the outbreak of coronavirus, according to a statement from Asset Management Association of China (Amac).
A PFM licence allows foreign managers to develop and sell funds investing in onshore assets to domestic qualified investors.
Hong Kong-based BEA Union Investment’s WFOE in Shenzhen received a PFM licence from the Amac in January 2020 but has not yet registered a fund. With the extension, the firm now has around 12 months to launch an onshore fund.
There are around two dozen foreign PFM licence holders that have launched 64 onshore funds as of 3 February this year, according to Amac records.
Among them, UBS Asset Management has the most PFM products with nine, followed by Value Partners, which manages eight funds and British quant fund manager Winton Capital which runs seven onshore products, Amac records show.
At the end of 2019, Nomura Asset Management, UBS AM and Fullerton Fund Management also received approval from the Amac for their onshore funds, FSA previously reported.
Market impact
China’s onshore markets plunged on Monday, the opening day of after the extended Chinese New Year holidays, due to the uncertainty surrounding the spread of the coronavirus.
The Shanghai Securities Composite Index dropped 8.73% while the Shenzhen Securities Component Index plunged 9.13%.
On the same day, People’s Bank of China (PBOC) announced that it would inject RMB 1.2trn ($171.3bn) into the market to boost liquidity.
According to a Reuters report, which cited an anonymous source, the China Securities Regulatory Commission (CSRC) has urged some mutual fund managers not to sell shares of onshore companies unless they face investor redemptions.
The regulator is giving verbal instructions to major asset mangers, asking them not to offload their stock holdings during the week unless necessary, the report noted.
FSA contacted China AMC and Gaoteng Asset Management but they declined to comment. Value Partners did not reply to a request for comment.
