China Banking Regulatory Commission, Measures for the Administration of Trust Companies

Promulgated: January 23 2007
Effective: March 1 2007

Main Contents: As a revision of the former Measures for the Administration of Trust and Investment Companies, these new Measures prohibit a trust company from engaging in liability business other than interbank borrowing. A trust company may not use its own property to invest in industry, unless otherwise provided by the China Banking Regulatory Commission. When engaging in business for its own account, a trust company may not provide financing or transfer property to affiliated parties, provide security for affiliated parties, or provide financing on the strength of a pledge of the company's equity held by a shareholder.

A trust company shall establish an organizational structure with the shareholders' (general) meeting, board of directors, supervisory board and senior management personnel as the principal entities thereof, expressly delineate the division of responsibilities among them, and ensure the independent operation of each and effective checks and balances among them. A trust company is also required to allocate 5% of its after-tax profit each year to a trust indemnity reserve.