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To standardize investor suitailbty management of structured funds and effectively safeguard the legitimate rights and interests of investors, the Shanghai Stock Exchange (SSE), upon approval by the China Securities Regulatory Commission (CSRC), released the “SSE Guidance for Business Management on Structured Funds” on November 25, 2016, which will officially come into effect on May 1, 2017.
By summing up the experience in management and operation of the structured funds in recent years, the Guidance further improves the investor suitailbty management system and standardizes the conversion of units of structured funds as well as investor education and risk warning. It will serve as an important institutional arrangement for implementing the requirements for practicing regulation strictly and comprehensively according to law, attaching more importance to prevention of all market risks and effectively pushing forward the stable and healthy development of the fund market.
Any individual investor or ordinary institutional investor applying for the permit of the business of structured funds shall satisfy the following conditions: “In the 20 trading days before applying for the permit, the average daily securities assets under its name shall not be less than RMB300,000”; “Signing a ‘Risk Disclosure Letter on Investment in Structured Funds’ in written form at the securities business department”.
After implementation of the Guidance on May 1, 2017, investors without the permit for the business of structured funds will not be allowed to buy sub-units of the structured funds or dividing basic units of the structured funds. Investors should pay attention to the changes on the permit for participating in the business of structured funds after implementation of the Guidance, and make proper arrangement for relevant transactions to avoid the risks resulting from the changes.
