BIZCHINA / News
Bourse issued caution for H-share investment
(Shanghai Daily)
Updated: 2007-06-29 08:54
Chinese mainland citizens should not divert funds into Hong Kong-listed
shares via illegal channels or entrust capital to unqualified
private-equity funds for stock investment, the Shenzhen Stock Exchange
warned in a notice yesterday.
Investors who seek to buy securities listed in Hong Kong outside the
Qualified Domestic Institutional Investor scheme are not legally
protected and face losing their money, the bourse said.
China last year launched the QDII program to let domestic banks help
clients invest in securities abroad and expanded the program early this
month to fund management firms and brokerages.
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But a large number of domestic citizens sought the help of agents such as
mainland brokers with Hong Kong offices or Hong Kong brokerages to
illegally invest their money in the city's stock exchange, the notice
said.
As China still restricts cash flows under the capital account, citizens
who hope to retrieve their illegally siphoned-out capital from the Hong
Kong market have to use "underground" channels, adding to risks of
losses, according to the notice.
The Shenzhen bourse also advised that mainland citizens should be
cautious against unaccountable securities consulting agencies, which
promised investors high returns and eventually misused their capital.
People shouldn't rush to entrust their money to private-equity funds
without evaluating their qualifications. They should also not divulge
their passwords of their stock-trading and bank accounts directly to
money managers, according to the notice.
If citizens choose to let private equity funds help arrange stock
investments, they must sign iron-tight agreements to clarify their legal
rights, the notice said.
(For more biz stories, please visit Industry Updates)
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