Today, the China Banking and Insurance Regulatory Commission ("CBIRC") issues the Administrative Measures for Wealth Management Subsidiaries of Commercial Banks (Draft for Comment) (the "Draft for Comment") for public comments by November 18, 2018.
With 61 articles organized into six chapters which are "General Provisions", "Establishment, Alteration and Termination", "Business Rules", "Risk Management", "Supervision and Administration" and "Supplementary Provisions", the Draft for Comment serves as a supporting regulation for the recently published "new rule for wealth management business", and, together with the "new rule for asset management business" and the "new rule for wealth management business", form the regulatory requirements that commercial banks' subsidiaries specialized in wealth management must observe when they are conducting wealth management business. The Draft for Comment introduces proper adjustments to some provisions of the "new rule for wealth management business", making the regulatory criteria for wealth management subsidiaries generally identical to that for other asset management institutions. According to the Draft for Comment, as to the investment of publicly-offered wealth management products in stocks and the sale threshold of publicly-offered wealth management products, publicly-offered wealth management products offered by subsidiaries will also be permitted to make direct investment in stocks, in addition to a previous provision that wealth management products privately offered by banks could be used to directly invest in stocks and their publicly-offered wealth management products could be used to indirectly invest through publicly-offered funds in stocks.