Guidelines on asset management products are tightened by China’s key bank
On Friday, China's key bank released draft guidelines for the purpose of tightening regulations on financial institutions' asset management business, which is a major component of the country's rampantly ascending shadow banking sector.
The fresh guidelines unified top-level rules for asset management products issued by trust firms, financial institutions, insurance asset management companies, fund, securities firms as well as futures companies. That’s what the People's Bank of China told in an online statement released jointly with the country's insurance, securities, banking as well as foreign exchange regulators.
Banks aren’t permitted to utilize asset management products to pump funds in commercial banks' credit assets or provide so-called "channel service" for other banks to dodge regulations, as the new draft rules states.
Aside from that the guidelines forbid banks from conducting asset pools just to manage funds raised via asset management products.