China to regulate wealth management sector
Updated: 2011-10-18 11:43
The China Banking Regulatory Commission (CBRC) released guidelines on the sales of wealth management products by commercial banks, reports China Securities Journal, citing the CBRC.
The guidelines prohibit banks from the use of wealth management products to attract deposits, and forbid the bundling of wealth management products and deposits.
In addition, banks will not be allowed to treat wealth management products as deposits during the sale process, and will be forbidden from attracting deposits through claims of high interest rates which violate banking regulations.
The guidelines also require banks to sell wealth management products which match the customers' risk profiles.
In order to avoid sales of wealth management products which are not suitable for customers, commercial banks are obligated to rate their wealth management products, and assess their clients' risk aversion periodically......
The full text is available in the October Issue of China Banking. Please visit E-Shop for more subscription details.