30% of pension fund may enter market

Up to 30 percent of pension fund will be put into equity investments, according to the pension fund investment operations solutions to be released soon, reported Securities Daily on Monday.

Calculated in accordance with China's basic old-age insurance fund balance of 1.92 trillion yuan ($303.56 billion), up to about 580 billion yuan may enter the capital market.

Tang Xiaodong, deputy director of Department of Investment Fund Supervision of China Securities Regulatory Commission (CSRC), said that the government is encouraging social security funds, annuity and insurance companies and other institutional investors to increase the proportion of investment in the capital market and actively promoting national basic pension insurance funds, housing funds and other long-term funds into the market.

At the 2012 China Securities Investment Fund Industry Annual Conference, Tang noted that the pension fund has a large promotional effect on the development of the fund industry and the potential for development is very big.

"Since the second half of last year, to some extent, the capital market environment had been improved by CSRC’s new policy and the environment that guides the long-term funds into the market is maturing," he added.

Cao Jun, director of the Professional Committee of the Joint-stock Enterprises of Shanghai Joint-Stock and Securities Research, said that with professional fund investment accompanying long-term funds into the market, China's capital market will see a fundamental change from a single personal investment model to a commission model.