July 8, 2018 / 3:11 AM / in 10 months

China may delay new rules for wealth management products: Caixin

FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo

BEIJING (Reuters) - China may delay the release of new regulations for banks’ wealth management products (WMPs) because of recent market turmoil, financial publication Caixin reported on Sunday citing unidentified sources.

The new rules were expected to be announced between late June and early July, Caixin said. One source told the publication that regulators have opted to hold off on releasing the new guidelines and wait for a “while” because of the market volatility.

People familiar with the matter told Reuters in May the China Banking and Insurance Regulatory Commission (CBIRC) will soon publish the rules as part of a broader push to curb financial sector risk. Official data showed 562 banks held 29.54 trillion yuan ($4.45 trillion) in outstanding WMPs at the end of 2017.

CBIRC is likely to adjust the limit for bank wealth management products’ exposure to non-standard investments, known widely as “shadow banking” products, one of the people told Reuters at the time.

But Chinese markets have swooned in recent weeks on worries about a protracted trade war between China and the United States, with the two governments implementing a new set of tariffs on Friday.

Top Chinese officials have repeatedly sought to assure markets in recent days that fundamentals of the world’s second-biggest economy are sound and that recent turmoil has been overdone.

($1 = 6.6396 Chinese yuan renminbi)

Reporting by Se Young Lee and Min Zhang

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