Friday , June 25 2021

Bank Financing Management Subsidiary Management Approach: 20% "Self Investment" Benchmark Public Fund – Economic Observer – Expert Finance News Website Public

(Source: Panorama Vision)

Economic Observer Network Reporter Hong Xiaowei

After many banks started to establish financial management subsidiaries, the regulatory framework of financial management subsidiaries eventually landed.

On December 2, the China Insurance Supervisory Commission announced the amendment (hereinafter referred to as "measures") of the operation of the subsidiaries of the commercial banking banking banks. Basically, "countermeasures" But there have been many revisions.

Disable "self investment" mode

The Economic Observer reported that the "action" compared to the previous "opinion draft" opened up an operating space where financial subsidiaries could invest in their wealth management products on their own funds.

The "draft opinion" stipulated that a bank's asset management subsidiary can not use its funds when purchasing an asset management product issued by the company. In the official version of the "Action", bank financing can be "self-investing" to the extent specified.

"A bank financing subsidiary shall not invest more than 10% of its net assets in a single asset management commodity and not at an inferior level of classed asset management commodities whose self-funds do not exceed 20% of their assets." "Action" .

In the industry, the opening of a "self-funded" model of a financial subsidiary means that a financial subsidiary can issue products with characteristics similar to sponsored funds, such as public offerings.

"There is more to avoid confusion in the self-employment and wealth management business before we avoid investing in subsidiaries directly in our products," a financial market department official at the company said frankly. "After this release, there was definitely some start-up, the fund business is close."

"It is right for financial institutions to make this happen, and when an institution manages its investors' money, their money will be put on the executive board, which will surely increase the trust of more investors."

However, financial subsidiaries' "own investments" should not exceed 20% of their own limit and 10% of net assets of a single asset management product compared to public funds.

"On the one hand, it is to prevent the risk of the asset management business from being transferred to self-employment because the asset management business in the past has done this kind of firewall in the parent company." The financial market department " I do not want to. " Businesses can not invest in classified after-sales products because they are used as a means for self-running businesses. "

Repeat Isolation Requirements

It is worth mentioning that the "action" repeats the isolation requirements for the asset management business and its own operations business from the previous "Asinion Draft".

The "draft opinion" states that "bank financing subsidiaries must ensure that the asset management business is separated from its own business and the asset management business is separate from its own business." In contrast, an "action" has been added. The requirement is that "interest transfers between own assets and issued asset management products" should not be carried out.

At the same time, "the measure added that the banking financial subsidiary should separate the investment execution function from the transaction execution function and implement the central transaction system rather than the" draft opinion ".

"Banking financial subsidiaries must establish fair trade systems and abnormal trading monitoring mechanisms to monitor, analyze, evaluate and verify investment transactions, supervise the processes and results of investment transactions, conduct transactions that may lead to unfair transactions and interest transfers No. "" Action ".

A related person at the Banking Insurance Regulatory Commission said that the rule is also based on the regulations of similar agency regulatory systems.

"A bank financing subsidiary will be subject to strict trade supervision, regardless of whether it is an investment researcher or a trading activity," said a large public fund operator in Shanghai.

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