China's financial authorities have selected three pilot banks to launch fund management companies, according to a statement issued yesterday by the central People's Bank of China.
The three lenders are the Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications, the first Chinese commercial banks allowed to launch fund management companies.

The decision was made after a conference jointly organized by the central bank, the China Banking Regulatory Commission and the China Securities Regulatory Commission.

Regulators agreed to step up studies of the three pilot banks' applications to invest in fund managements and sell mutual funds.

They also discussed relevant risk control mechanisms for such cross-industry investment and ways to enhance co-ordination between the watchdogs, the statement said.

China's commercial banks had previously only been allowed to sell mutual funds or provide custody.

The watchdogs are expected to grant final approval for the qualified banks to set up fund management firms by the end of September.

As to which bank will be the first to obtain such a licence, that depends on the preparations made by the three lenders, the central bank said yesterday.

The experiment will be conducted in a steady way and based on strict criteria, it said.

It will later be gradually promoted to other banks.