In a move to tighten its oversight of wealth management industry, China Banking Regulatory Commission (CBRC) has asked the banks to register the wealth management products before selling them to the public.
The regulator has directed the Chinese commercial banks to provide detailed information of each wealth management product on a newly set up electronic platform.
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The CBRC has teamed up with the China Government Securities Depository Trust & Clearing Co. to set up the registration platform.
According to the newly issued guidelines, the formalities are to be completed 10 working days ahead of the scheduled date of their launch in the market.
The regulator has also asked banks to submit detailed information on each product, including product maturity and an indication which projects will use the funds. Banks need regulatory clearance before they can formally take their products to prospective buyers.
The regulators decision to tighten supervision on the wealth management product was triggered by a CNY140 million (US$22.8 million) default made by wealth management product sold through a Shanghai branch of Huaxia Bank Co. The investors, though eventually received their principal, lost the promised 11% to 13% interest.
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By GlobalData
