News Brief: E Fund denies misconduct allegations – Vanguard Australia hit with A$12.9M fine – ChinaAMC, BlackRock lead HK tokenisation push
E Fund Management's Hong Kong branch has refuted allegations of regulatory misconduct by a whistleblower from the firm. An anonymous e-mail, which was leaked on Tuesday, accused the fund house of hiding offshore losses, illegal short-selling, arbitrarily revising fund valuations and providing clients with luxury gifts.
E Fund issued a public statement to deny the allegations, which named several senior executives and was shared with regulators in mainland China and Hong Kong. The Chinese fund giant has also launched an independent investigation into the matter. Read about the allegations here.
Vanguard has been fined a record A$12.9 million by an Australian court over misstating ESG claims in an "ethically conscious" fund. The penalty followed a Federal Court ruling in March that found the U.S. index fund giant guilty of misleading investors about fund securities with ties to oil and gas exploration.
Australian regulators sought penalties of A$21.6 million, but experts say the size of the fine is still significant with some predicting it may deter fund firms from launching more ESG products. Read about the implications of the penalty here.
ChinaAMC, BlackRock and Franklin Templeton are among a handful of firms leading Hong Kong's push to create a tokenised funds sector. The Hong Kong Monetary Authority launched "Project Ensemble" sandbox last month, with five asset managers tasked with examining tokenisation use cases for fixed income and investment funds.
This innovation could facilitate distribution, reduce costs and increase liquidity, industry participants say, but some argue there is currently "no benefit" commercially to launching a tokenised fund. Reach about Hong Kong's tokenisation plans here.
Graph of the week
Investment product sales in Hong Kong rebounded 14% last year to reach HK$4.3 trillion on the back of strong demand for money market funds and other low-risk strategies. But this figure still trails sales numbers in 2020 and 2021 when fund sales surpassed HK$5 trillion each year. Read more about the latest fund sales trends in Hong Kong here.
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