Core Viewpoint - Regulatory authorities are requiring trust companies to conduct internal assessments regarding their bond trading operations, specifically focusing on the limits of reverse and repurchase agreements [1][2]. Group 1: Regulatory Requirements - Trust companies are being asked to verify if they have established internal systems in accordance with the recent regulatory notice and whether they have set up monitoring indicators within their systems [1]. - Companies must check for any instances of exceeding limits on reverse repurchase agreements (90% and 100% of the previous day's net assets) and repurchase agreements (70% and 100% of the previous day's net assets) since the beginning of 2024 [1]. Group 2: Industry Context - The 2017 notice specified that non-publicly issued financial products, including trust plans and asset management products, must not exceed 100% of their previous day's net assets in terms of bond repurchase and reverse repurchase funding balances [2]. - Trust companies have increasingly managed significant amounts of bank wealth management funds, primarily engaging in cash management through government bond reverse repurchase agreements [2].

Core Insights - Regulatory authorities have mandated trust companies to conduct internal reviews regarding their bond trading operations and the limits on reverse and repurchase agreements [1][2] Group 1: Regulatory Requirements - Trust companies are required to assess whether they have established internal systems in accordance with the recent notification and whether they have set up relevant monitoring indicators in their systems [1] - The review focuses on two main aspects: the establishment of internal regulations and the occurrence of any excess in reverse repurchase agreements exceeding 90% and 100% of the previous day's net assets, and repurchase agreements exceeding 70% and 100% of the previous day's net assets [1] Group 2: Industry Practices - Trust companies have increasingly taken on a significant amount of bank wealth management funds, primarily engaging in cash management through government bond reverse repurchase agreements [2] - There is a discussion within the industry regarding the appropriateness of using "previous day's net assets" as a benchmark for monitoring, with suggestions that "same-day net assets" may better reflect actual market conditions [2]