The China Banking and Insurance Regulatory Commission ("CBIRC") has recently drafted and issued the Measures for the Supervision and Administration of Wealth Management Business of Commercial Banks (Draft for Comment) (the "Draft for Comment") to seek public opinions by August 19, 2018.
The Draft for Comment, comprised of 85 articles in six chapters and an appendix titled the Requirements on Sales Management for Wealth Management Products Offered by Commercial Banks, sets out primary regulatory requirements on the wealth management business of commercial banks. To be specific, the first is exercising the category-based administration by dividing wealth management products into publicly offered and privately offered products. The second is standardizing the operation of products and conducting the net-value-based management. The third is standardizing the operation of the cash pooling to prevent risks of "shadow banks". The fourth is eliminating channels and tightening the penetration administration. The fifth is setting the quota to restrict concentration risks. The sixth is curbing the leverage ratio to effectively manage and control risks. The seventh is reinforcing the management and control of liquidity risks. The eighth is strengthening the administration of cooperative agencies for investment in wealth management products. The ninth is intensifying information disclosure to better safeguard rights and interests of investors. And the last is requiring the centralized registration of products to reinforce compliance management for wealth management products.