Legislation roundup: wealth management, interbank lending and unlisted public companies

With a view to supporting the participation by the wealth management products of commercial banks in investment in fixed return products of stock exchanges such as standardised bonds, credit asset backed securities and preference shares, one securities account may be opened on each of the Shanghai and Shenzhen stock exchanges for the wealth management products of a bank. However, from the Circular, it would seem that bank wealth management products still cannot invest in equity type products, such as stocks.

See the digest for more details.

Further reading

Circular on Issues Relevant to Regulating the Investment Operation of the Wealth Management Business of Commercial Banks

Circular on Matters Relevant to Regulation of the Cooperation Between Banks and Trust Companies on Wealth Management Business

Banking

People's Bank of China, Measures for the Administration of Interbank Negotiable Certificates of Deposit

中国人民银行同业存单管理办法

The offer rate and offer price for interbank negotiable certificates of deposit (INCD) will be determined by a market method, which is another step taken by China to liberalise its interest rates. Interest on variable-rate INCDs will accrue by taking the Shanghai Interbank Offered Rate (SHIBOR) as the benchmark for the variable interest rate, and the term of such variable INCDs is, in principle, at least one year, including one year, two years and three years.



See the digest for more details.

Further reading

Guidelines for the Management of Interest Rate Risk in the Banking Book of Commercial Banks

Circular on the Matters Relevant to the Engagement in Renminbi Interest Rate Swap Business

Unlisted public companies

China Securities Regulatory Commission, Measures for the Regulation of Unlisted Public Companies (Revised)

中国证券监督管理委员会非上市公众公司监督管理办法 (修订)

Expansion nationwide of the new third board pilot project has been formally initiated. The Measures provide that the transfer of stock by public companies be effected on the National Equities Exchange and Quotations. Public companies may carry out equity financing, debt financing, asset restructuring and offer preference shares in accordance with the law.

See the digest for more details.

Further reading

Measures for the Regulation of Unlisted Public Companies

2012 Review: Capital Markets – market reforms, SME boards and shareholder fundraising