China’s central bank, securities regulator and two other administration have released a new guideline on asset management for financial institutions, marking the end of the old era of financial regulatory arbitrage caused by inconsistent rules, China Securities Journal reported.
The new regulations help define the asset management business as a financial service in which financial institutions such as banks, trusts, securities, funds, futures, insurances, investment firms manage the assets of consigned investors.
The aim is to restrain banks from moving their assets and liabilities off of the balance sheet, in an effort to curb the expansion of shadow banking.
Secondly, to apply unified, controlled supervision for similar asset management products. For example, to set up different debt levers based on different risk levels of different products.