Regulator Relaxes Business Restrictions On WFOE FMCs

Recently, the Institutional Supervision Department of the China Securities Regulatory Commission (CSRC) issued a notice titled "Continuously Optimizing Regulatory Systems and Mechanisms to Steadily Promote the Opening-Up of the Public Fund Industry" (the "Notice"). According to the Notice, the CSRC has relaxed business restrictions on wholly foreign owned public fund management companies ("WFOE FMCs") in areas such as QFI investment advisory services, third-pillar pension fund management, and cross-border data transmission.

Review of WFOE FMC Development in China

The Notice first reviewed the development of WFOE FMCs in China, noting that while WFOE FMCs have not been operating in China for long and their market share in the public fund industry remains relatively small, they adhere to stricter compliance and risk control standards and adopt more cautious and stable investment practices. The Notice also pointed out that WFOE FMCs generally focus on pension fund