Core Viewpoint - The recent draft regulation from the National Financial Supervision Administration aims to tighten the trust "channel" business, reshaping the cooperation model of internet lending and pushing trust companies towards active management roles [1][4]. Summary by Sections Regulation Overview - The draft regulation defines asset management trusts as private equity products based on trust law, requiring trust companies to fulfill active management responsibilities and prohibiting any form of capital preservation promises [2][3]. - Trust companies are forbidden from conducting channel and fund pool businesses, necessitating separate accounting for trust products and accurate reflection of trust property status [2][3]. Impact on Trust Companies - Trust companies have historically acted as "shadow roles" in channel businesses, which has led to regulatory arbitrage and increased systemic risks [2][3]. - The new regulation compels trust companies to transition from passive channels to active managers, necessitating the establishment of independent risk control systems and operational capabilities [5][6]. Changes in Internet Lending - The regulation will lead to a reshuffling of cooperation models in internet lending, requiring trust companies to have substantial management and supervisory authority over the entire loan process [1][6]. - The prohibition of common practices in internet lending, such as rolling issuance and pooled operations, will necessitate greater transparency and compliance in fund usage [5][6]. Industry Transformation - The regulation is expected to accelerate the transformation of the trust industry, with a focus on professionalization, transparency, and compliance, ultimately enhancing risk identification and pricing capabilities [1][4]. - The anticipated shift may result in the elimination of trust companies lacking core competencies, as they face increased compliance costs and a narrowing of operational scope [4][6].