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China Paves Way for Wealth Management Products to Buy Stocks

  • Move may ease investment process, eliminate intermediaries
  • Changes in investments scope will need regulatory approval
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Chinese authorities paved the way for wealth management products to invest directly in the stock market, as policy makers try to reduce the potential risks associated with WMPs buying third-party offerings.

Commercial banks can now open accounts to invest their WMP assets straight into all “sanctioned” financial products, China Securities Depository and Clearing Corp. said in a statement on its website Wednesday. Previously the funds could only be directly invested in fixed income products. The CSDC clarified in a statement on Thursday that changes in investment scope would require approvals from regulators.