In the News: Tightened Cash Management Rules; New School Regulations; and More Stabilizing Foreign Trade Measures

July 15, 2019 | BY

Marilyn Romero

The CBIRC will tighten regulations on China’s cash management products; increased government oversight of Chinese schooling has hit the share price of several Hong Kong-listed tutoring companies; and China’s State Council plans to adopt more fiscal, and tax- and tariff-reduction measures to maintain stability in its international trade.

Promulgated: 2019-07-01

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CBIRC eyes tightening of rules on cash management products

China’s banking regulator, the China Banking and Insurance Regulatory Commission (CBIRC), is reportedly planning to tighten rules on the country’s cash management products (CMPs), which are issued by banks and are more liquid than money market funds. China’s CMPs, which are sold by asset managers, involved an estimated $2 trillion of investments and the CBIRC wants to impose stricter rules on pricing and restricting where and for how long the inflows can be invested, according to a Bloomberg report. The current looser regulation of CMPs enables banks to offer higher yields than those on money market funds (MMFs) and the CBIRC’s proposed changes could, if implemented, lessen their investment appeal, the sources suggested. MMFs, overseen by the securities regulator, cap duration of their investments at an average 120 days while no limit is applied to CMPs.

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