English

By Tang Guhan

The New Chinese Depository Receipt (CDR) fund products issued by six Chinese fund firms were approved by the China Securities Regulatory Commission (CSRC) on Wednesday.

The six new Listed Open-Ended funds (LOF), which invest in China's overseas listed unicorns that are coming back to the A shares market through the CDRs, will be launched into the market for individual investors to buy as soon as next Monday.

Six fund companies had handed in their applications by the end of May.

The fund companies include the China Merchants Fund, the China Southern Fund, the China Asset Management Co. Ltd., the China Universal Asset Management Co., Ltd., the Harvest Fund and the E Fund Management Co., Ltd.

Each product was capped with an upper limit of 50 billion yuan for fundraising and fund companies strived to reach that goal.

The new funds will be open to retail investors for five days from June 11 to June 15 while being available to institutional investors on June 19. The social security fund and pension fund prioritize enterprise annuity funds and other institutional investors.

Each retail investor could buy up to 5 billion yuan from each product.

Analysts assumed the three years' lock-up period would give unicorns adequate time for preparation to return to the Chinese share markets through the CDR and other financing activities. Retail investors could share the bonuses from unicorns' CDRs by investing in these new funds.

"Through involving a wide range of investors, the move will better serve the pressing demand for CDR companies' financing activities when they come back home," said an analyst from a fund company.

Chinese authorities have opened the doors for overseas-listed tech unicorns to trade in the A shares market by issuing CDRs by the end of March. Tech giants like Alibaba, Baidu, Tencent, JD.com, and Xiaomi were believed to be in the list.