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在线翻译:
szdaily -> Markets -> 
Regulator to probe funds’ risk controls
    2018-05-14  08:53    Shenzhen Daily

WITH corporate-debt defaults on the rise, China’s securities regulator will probe bond funds to ensure that they have proper risk controls in place, according to sources familiar with the matter.

The China Securities Regulatory Commission’s investigation will include whether individual firms’ funds are shuffling high-risk bonds between them, said the sources. One suspicion is mutual fund companies may be motivated to beautify their holdings to avoid a mass withdrawal by investors, the sources said.

The checks will include ensuring that bond funds’ investments are being disclosed in a timely and accurate manner, the sources said.

Officials are alert to signs some funds may be at risk for having a concentration of troubled securities, according to the sources.

As China embraces reforms to its near-US$10 trillion bond market, including the roll-back of implicit government backing, officials are allowing more defaults.

In the past three weeks, at least two companies missed bond payments and two others ran into liquidity trouble. The rising credit risks have roiled investors amid an increase in borrowing costs spurred by a broader push by policymakers to rein in financial leverage.

At least nine publicly-issued local bonds have defaulted so far this year, compared with 11 in the same period of 2017. China began permitting defaults in 2014, and the move has gradually helped differentiate pricing — in at least some pockets of the bond market — to better align with the issuers’ credit quality. (SD-Agencies)

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