New rules set to transform asset management

New asset management regulations will transform banks' wealth management business and their valuation capability will be improved under fair value management, analysts said.

Michael Hu, PwC China financial services partner, said on Thursday, "The current business model of wealth management is not sustainable. Principal-preserved wealth management may not prevail in the future. As a result, better use of funds calls for dedicated management and risk provision requires more sophisticated skills for practitioners."

Preventing and resolving financial risks is the top priority for the Chinese government. A series of regulatory measures, including the draft new rules on asset management, were introduced, highlighting the elimination of shadow banking as the most important task in risk prevention, PwC said.