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China probes ‘blind box’ funds for contract compliance – China Securities Journal

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An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip

SHANGHAI, Sept 16 (Reuters) – China is probing “blind field” funds to make sure that funding positions are in compliance with the said contractual phrases, the China Securities Journal reported on Thursday.

The information comes as chaotic scenes erupted on the headquarters of cash-strapped developer China Evergrande Group in current days as disgruntled buyers crowded its foyer to demand reimbursement of loans and monetary merchandise.

Such “blind field” funds — these which might be opaque or have been misnamed — have led to investor losses as cash has been invested in sectors not set out within the fund settlement, as per the report.

There’s a view within the trade that making a living for buyers is an important factor and that the means used to take action are irrelevant, the paper mentioned.

“Regulatory authorities have been involved concerning the challenge of funds’ ‘type drift’, particularly for fund merchandise which have a excessive diploma of market consideration and contain many holders,” the paper reported, quoting an individual from a Shenzhen fund firm.

Reporting by Engen Tham and Wang Jing; enhancing by Uttaresh.V

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