China insurance companies to be investigated for insider trading: CIRC

BEIJING (AFX-ASIA) - Regulators have launched a wholesale review of the fund management activities of domestic, joint venture and foreign insurance companies to investigate possible insider trading or the use of "illegal" capital, the official Xinhua news agency reported, citing officials at the China Insurance Regulatory Commission.

	    Companies engaged in the securities investment business without the commission's approval will be penalised, Feng Xiaozeng, CIRC vice chairman and the official in charge of the review was quoted as saying.

	    He said the review was aimed at improving financial risk management and control in the industry. 

	    "We will work out rules and regulations on the basis of a follow-up analysis on insurers' fund management capacity, investment returns and possible risks," he said.

	    Under current regulations, insurance companies are not allowed to invest more than 20 pct of their assets in any individual securities investment fund, or have more than 10 pct of the total shares of any one fund, Xinhua said.

	    Feng was quoted as saying that the returns from insurance fund management are the main source of profit for insurance companies. Consequently, the commission is working on ways to expand fund management channels.

	    It has already allowed a number of insurance firms to buy securities bonds on the interbank market and invest in securities, he added.

Related stock : (NIL)