China drafts bar for net capital of banks' wealth management units

[September 20, 2019]  BEIJING (Reuters) - China released draft rules on net capital management of commercial banks' wealth management units on Friday, a follow-up move to regulate the risk of country's newly structured wealth management industry.

Net capital of commercial banks' wealth management units should be no less than 500 million yuan ($70.54 million) or 40% of the units' net assets, according to a draft rules released by the China Banking and Insurance Regulatory Committee (CBIRC) on its website.

Net capital of the units should be also no less than 100% of their risk capital, the CBIRC added.

The regulator unveiled in late 2018 long-awaited rules governing commercial banks' asset management subsidiaries, relaxing the investment criteria of wealth management funds for banks, yet pending detailed regulations.

(Reporting by Cheng Leng, Vincent Lee and Beijing Monitoring Desk; Editing by Raissa Kasolowsky)

[© 2019 Thomson Reuters. All rights reserved.]

Copyright 2019 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.