Guideline to trust firms issued

A guideline to trust firms to implement new asset management regulation during transition period by the end of 2020 has been issued, China Securities Journal reported on Monday.

The guideline remains strict for financial institutions, but as it does not lay down any new rules it is positive for financial institutions and the market, said the news website, citing insiders.

Recently, the regulator suggested to some trusts that they can appropriately increase "channel business" to lend money to borrowers via the third-party, including securities firms, trust companies, and insurance companies. The third-party can earn commission from the "channel business".

During the submission of comments on the guideline, the regulator has divided the "channel business" to "kindness" and "malevolence", and ruled the "kindness channel business" is allowed to be carried out, but the "malevolence" is banned.

However, the rule has not been confirmed on the guideline, the news website said.

By the end of 2017, the balance of trust money reached 21.9 trillion yuan, said the news website, citing Xinhua.

The guideline said the family trust business does not come under the new asset management regulation announced on April 27.

The news website citing a report from PY Standard said nearly 30 trust companies carried out the family trust business by the end of 2017, and the size surpassed 50 billion yuan and the products amount reached 3,000 orders.

Before the guideline was published, some local banking regulatory institutions in Fujian, Zhejiang, Jiangsu provinces and Shanghai suspended trust companies from issuing new real estate trust products, media reported.

But on Monday night, the Shanghai banking regulator said it did not suggest the suspending and the banking regulator in Ningbo also said it did not suspend the real estate trust products.