Regulator stresses supervision of online fund sales

BEIJING - China's securities regulator has stressed the protection of investor interests during online sales of mutual fund products, the Shanghai Securities News reported on Saturday.

Online fund sales must ensure the security of investors' capital and prevent investors from being deceived or misled, Deng Ke, a spokesman for the China Securities Regulatory Commission, was cited as saying at a press conference.

Fund companies must strictly implement the principle of sales appropriateness, or make sure that fund products' risks are in line with the risk tolerance of investors, Deng said.

His remarks pointed to emerging problems over misleading advertisement in online fund sales along with the booming growth in Internet finance since the middle of last year.

Last June, China's most popular online payment platform, Alipay, joined with Tianhong Asset Management Co to create Yu'E Bao, a product that allows Alipay users to conveniently transfer their balance into a mutual fund account to make a profit.

After its launch, Yu'E Bao soon attracted a vast number of users thanks to Alipay's huge customer base. At the end of 2013, Yu'E Bao boasted more than 43 million users with total deposits of 185.3 billion yuan ($30 billion).

Other Internet companies have followed suit to partner with fund companies. For instance, Baidu, the largest Chinese search engine, has cooperated with the China Asset Management Co, a leading fund company in China.

Earlier this month, two fund-service websites - Fund123.cn and the fund site of Eastmoney.com - were penalized by local securities regulators for inappropriate wording in their product adverts.