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New rules to target asset management sector

The much-anticipated new regulations in the asset management sector are expected to be released before March, when the annual National People’s Congress and National Committee of the Chinese People’s Political Consultative Conference kicks off, Yicai.com reported, quoting a source close to the regulators.

According to the source, the final draft contains some late revisions, in order to make the new rules more rigorous and operational. The principles will not change, including the plan to implement net worth management and eliminate “multi-layer nesting,” which means using asset management products to invest in other asset management products.

The source also said that there should be an appropriate extension to the transition period before the new rules take effect. But the core of action is not about how long the extension should be, but rather, how to turn the off-balance sheet business back within the table. “The disguised off-book operation can no longer be continued,” the source emphasized.

In November last year, the central bank and regulators of the banking, securities, insurances and foreign exchange sectors co-released a draft to standardize the asset management business. The general idea was to develop a unified regulatory standard in accordance with the type of asset management products.

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