Sources with the CSRC said that the fund industry has growing healthily on the whole but there were new phenomena worthy of notice. For instance, some fund companies carry out unjust competition by not fully revealing investment risks, some ignore liquidity risks to go after better ratings and short-term returns while some fund managers engage in short swing trading or make improper comments on individual shares.

As open-ended funds are very susceptible to redemption, the CSRC warned of blind optimism amidst fund firms and urged them to tighten liquidity management.

To better protect the long-term interests of fund holders, the CSRC said it would evaluate fund firms on their human resources, investment research capability, operation system management, customer services, risks management and internal control.

Third quarterly reports of fund firms showed that ten funds including Bosera Funds, China Asset Management, China Southern Fund Management and E Fund Management have each held assets of more than 100 billion yuan. In the second quarter, there were only five.