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​Commercial banks' financial products see new rules in China

Xinhua Financein CFBOND
2018-10-01 11:01

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Commercial banks' financial products used for money management embraced new rules in China on Friday, which continue the current restrictions on the capital pool, net assets and the investment on non-standard creditors' assets.

Analysts said the new rules do not reveal a tightening of the current regulations, but a relaxation on publicly-offered financial products being invested in the stock market.

In detail, the new rules allow publicly-offered financial products to invest in the stock market, but they have to operate through publicly-offered funds. Privately-offered funds have no similar restrictions.

Meanwhile, the upper limit for investing in non-standard creditors' assets has changed from 35 percent of the financial balance to 35 percent of the net financial assets, which means the cardinal number has been narrowed, which will affect only a few banks.

Another highlight of the new rules is the cooling-off period of at least 24 hours when investors can change their mind, and banks should give a full refund of their investments in time.

The new rules have included the Asset Backed Medium-term Notes (ABN), a note whose income payments and hence value is derived from and backed by a specified pool of underlying assets, into securities that are backed by underlying assets.

According to China's banking and insurance regulator, the country has witnessed a stable financial product market in the past months.

By the end of June, the non-break-even financial products from China's commercial banks had a balance of 21 trillion yuan (about 3.1 trillion U.S. dollars), 21.97 trillion yuan (about 3.2 trillion U.S. dollars) by the end of July, and 22.32 trillion yuan (about 3.25 trillion U.S. dollars) by the end of August.
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