China may issue new asset management rules soon: analysts

2018-02-26
Xinhua

BEIJING — China may unveil new asset management rules soon based on statements from the central bank earlier this month, analysts said.

The People’s Bank of China, the country’s central bank, said on Feb 14 in a quarterly monetary policy report that it was improving the draft of the new asset management rules and would submit it to the State Council for approval.

“The new asset management rules will be introduced in time. But asset management agencies should not expect the new rules to loosen scrutiny,” said Zhao Xijun, a finance professor with Renmin University of China.

The new rules shall retain provisions such as restricting “non-standard asset” investments and eliminating multi-layer nesting to guard against risks and make the financial sector better serve the real economy, Zhao was quoted by the Securities Daily as saying.

“The new rules will help drain illegal funds in the stock market,” said Pan Xiangdong, chief economist at New Times Securities.

Li Yamin, an analyst with the BOC International (China) Co Ltd, expected fundamental changes to happen in banking finance services because of the upcoming new rules.

In November 2017, regulators released draft guidelines that will unify rules covering asset management products issued by all types of financial institutions.

The sweeping new guidelines require financial institutions to set leverage ceilings on asset management products. For example, the total assets for an open-ended public offering product should not exceed 140 percent of the product’s net assets, while the total assets for a closed-end public offering product should not be greater than 200 percent of its net assets.