September 20, 2019 / 8:20 AM / a month ago

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

BEIJING, Sept 20 (Reuters) - China released draft rules on net capital management of commercial banks’ wealth management units on Friday, a follow-up move to regulate the risk of country’s newly structured wealth management industry.

Net capital of commercial banks’ wealth management units should be no less than 500 million yuan ($70.54 million) or 40% of the units’ net assets, according to a draft rules released by the China Banking and Insurance Regulatory Committee (CBIRC) on its website.

Net capital of the units should be also no less than 100% of their risk capital, the CBIRC added.

The regulator unveiled in late 2018 long-awaited rules governing commercial banks’ asset management subsidiaries, relaxing the investment criteria of wealth management funds for banks, yet pending detailed regulations. ($1 = 7.0879 Chinese yuan renminbi) (Reporting by Cheng Leng, Vincent Lee and Beijing Monitoring Desk Editing by Raissa Kasolowsky)

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