Interim asset management products rules

The China Banking and Insurance Regulatory Commission recently issued new rules specifying how insurance companies can invest asset management product funds and spelling out the qualifications for investors in such products.

The regulations, taking effect 1 May 2020, clarify requirements for a USD390 billion market and are part of a long-running project by financial regulators to erect a framework for an industry that manages billions of dollars of investors’ funds. The rules contain general provisions; relevant parties of asset management products; product issuance, renewal and termination; product investment and management; information disclosure and reporting; risk management; supervision and management; and supplementary provisions.

In line with the general rules, the policy document specifies that insurers can invest asset management products in government bonds, central bank bills, corporate bonds, deposits, interbank deposit certificates, mutual funds, securities and other equity assets.

Insurers must also make sure that investments using insurance funds follow separate requirements on the investment scope of such funds.