More commercial banks may be allowed to set up fund management companies under a pilot program that has been approved by the State Council, the China Securities Regulatory Commission, the country's securities regulator, said on Dec 25.

As many as eight fund management companies have been set up by commercial banks among a total of 73 fund management companies in the country.

The participation of more banks in the pilot program will help to develop more channels for savings to be orderly transferred into the capital market, increasing the number of institutional investors, boosting the development of the funds industry, and bringing more experience to the operations of urban commercial banks, the CSRC said.

The issuance of fund products has been facing difficult times in recent months, but fund companies set up by banks have a higher market share due to their easy access to clients and more opportunities to recommend fund products to buyers, analysts said. The involvement of more banks in the pilot program will also bring fiercer competition to the fund products market, the analysts added.

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