September 28, 2018

CBIRC published final measures for the supervision and administration of financial management business of commercial banks. The publication of these final measures followed a consultation, the comment period for which ended on August 19, 2018. These measures become effective from the date of promulgation—that is, September 26, 2018.

These measures are consistent with the regulations on asset management, which were issued on April 27, 2018, and are positioned to regulate non-guaranteed wealth management products of banks. The measures focus on the following key factors:

  • Strictly distinguishing between public and private wealth management products
  • Strengthening the appropriate management of investors
  • Standardizing product operations and implementing net worth management
  • Standardizing the operation of fund pools to prevent “shadow banking” risks
  • Removing channels and strengthening penetration management
  • Limiting and controlling concentration risk
  • Strengthening liquidity risk management and control and controlling leverage level
  • Strengthening management of financial investment cooperation institutions, strengthening information disclosure, and protecting the legitimate rights and interests of investors
  • Implementing centralized product registration and strengthen the management of financial products’ compliance

The transition period requirements of the measures are consistent with those of the “New Regulations for Asset Management” and the transition period runs from the implementation of the measures to December 31, 2020. During the transition period, the newly issued wealth management products of commercial banks shall comply with the provisions of these measures; for stock wealth management products, commercial banks may issue unexpired assets invested by old products in connection with stock wealth management products, but shall strictly control the overall scale of the stock products. After the end of the transition period, commercial bank wealth management products shall be fully regulated and managed in accordance with these measures and the “Guidance Opinions,” except for cases where the factor company has not been established and cannot meet the requirements for independent third-party custody; commercial banks may not re-issue or remain inconsistent with the guidance.

 

Related Links (in Chinese)

Effective Date: September 26, 2018

 

Keywords: Asia Pacific, China, Banking, Wealth Management Products, Asset Management, CBIRC 

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