Tue, Dec 14, 2004 - Page 10 News List

Four funds exceed investment cap

RESTRICTIONS Franklin Templeton Securities has stopped marketing four funds to investors after they exceeded government limits on investments in China

By Joyce Huang  /  STAFF REPORTER

Franklin Templeton Securities Investment Consulting (富蘭克林投顧) has been informing its dealers since last Friday that it will stop marketing four funds, after a Chinese-language newspaper said the funds had violated the government's investment regulations.

"Since last Friday, we've stopped attracting new investors who plan to buy these four funds as they have violated the investment-cap restriction on Chinese stocks," a financial consultant at the brokerage who requested anonymity said yesterday.

"But we'll continue to provide necessary information and services to ... clients who may not wish to sell the funds," she added.

The funds include Templeton Asian Growth Fund, Templeton Developing Markets Trust Fund, Templeton Emerging Markets Fund and Templeton Global Fund.

The newspaper report said Franklin Templeton forfeited approval to sell these funds in Taiwan after regulators capped investment in China's A and B shares at 0.4 percent of a fund's net value.

Investments in Hong Kong-listed Chinese companies are also limited by the government to less than 5 percent of a fund's assets, the report added.

The consultant denied the report that sales of the company's funds have been banned by the securities and futures bureau under the Financial Supervisory Commission (FSC).

She refused to comment on whether regulators' restrictions are too strict and should be relaxed, as the newspaper report had argued.

Questioned by legislators, FSC Chairman Kong Jaw-sheng (龔照勝) yesterday said that he believes a relaxation of the restrictions would be good for the development of the local fund market.

"It would be better to relax the restriction," Kong told the legislature's finance committee.

Kong added that he couldn't answer to policies promulgated by the Cabinet's Mainland Affairs Council, but would discuss the possibility of relaxing the 5 percent cap with the council this week.

In October, Invesco Asset Management Ltd also stopped accepting investments in its Invesco GT Developing Markets Fund, Invesco GT Asia Enterprise Fund, Invesco GT Global Enterprise Fund and Invesco GT Global Emerging Markets Fund due to the same government restrictions.

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