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

BEIJING (Reuters) – China launched draft guidelines on net capital management of business banks’ wealth management units on Friday, a follow-up transfer to manage the chance of nation’s newly structured wealth management business.

Net capital of business banks’ wealth management units ought to be a minimum of 500 million yuan ($70.54 million) or 40% of the units’ net property, in keeping with a draft guidelines launched by the China Banking and Insurance Regulatory Committee (CBIRC) on its web site.

Net capital of the units ought to be additionally a minimum of 100% of their danger capital, the CBIRC added.

The regulator unveiled in late 2018 long-awaited guidelines governing business banks’ asset management subsidiaries, stress-free the funding standards of wealth management funds for banks, but pending detailed laws.