Core Viewpoint - The new regulations for the trust industry, effective from January 1, 2026, aim to reshape the business structure, governance, risk management, and regulatory mechanisms of trust companies, emphasizing a return to core responsibilities and risk-controlled development [1][2][7]. Business Scope Adjustment - The revised regulations reduce the five types of trust businesses to three: asset service trusts, asset management trusts, and public welfare trusts, while eliminating unrelated intermediary businesses [3][4]. - New provisions allow trust companies to apply for liquidity support from the trust industry guarantee fund and provide investment advisory and technical services for financial institutions [3][4]. Focus on Core Responsibilities - The regulations emphasize the role of trust companies as fiduciaries, moving away from channel arbitrage and off-balance-sheet financing, which is expected to enhance risk isolation and asset security [4][5]. - The shift towards a "trust management" model aims to foster innovation and high-quality development in areas such as wealth management and family trusts, while reducing leverage and hidden risks [4][5]. Enhanced Governance and Risk Management - The new regulations set a minimum registered capital requirement of 500 million RMB and mandate the establishment of a chief compliance officer to strengthen internal controls and compliance management [5][6]. - Trust companies are required to conduct annual external audits and improve risk management mechanisms to prevent systemic risks [6][7]. Transition and Rectification of Existing Businesses - Trust companies must identify and rectify existing non-compliant businesses according to the new regulations, with a focus on orderly reduction of problematic business scales [7][9]. - The industry is expected to undergo significant restructuring, with traditional high-leverage models facing pressure, while compliant and innovative companies may gain competitive advantages [7][8]. Industry Differentiation - There is a noticeable disparity in the compliance levels among trust companies, particularly regarding registered capital and information disclosure practices [8][9]. - Companies are encouraged to develop a scientific rectification roadmap and enhance transparency to protect beneficiary rights during the transition [9].