Core Viewpoint - The recent draft of the "Asset Management Trust Management Measures" marks a shift towards a more refined regulatory framework for the trust industry, addressing the need for updated regulations after 18 years of existing rules, and emphasizing the importance of returning to the core functions of trust services [1][2] Regulatory Framework - The draft further clarifies the boundaries of asset management trusts, emphasizing private asset management characteristics, limiting investor numbers to a maximum of 200, and enforcing stricter qualifications for high-risk products [2] - It prohibits any form of guaranteed returns, mandating that sellers are responsible for their actions and buyers bear their own risks, thus breaking the previous rigid repayment structure [2] - The draft also bans channel business and fund pool operations, requiring trust companies to manage assets actively and transparently [2] Challenges in Non-standard Assets - The draft imposes strict limitations on non-standard asset investments, which may lead to a decrease in financing trusts and pressure on companies reliant on non-standard business models [3] - Trust companies are urged to enhance their research capabilities and operational structures to meet the new demands for standardized products and net asset value management [3] Opportunities for Growth - The draft opens avenues for high-quality development in the trust industry, with standardized trusts expected to become a key focus area [4] - Trust companies can leverage regulatory flexibility to create differentiated products, such as family trusts and insurance fund mandates, to compete with public funds and securities asset management products [4] - The asset securitization sector presents significant potential, with trusts benefiting from bankruptcy isolation features in areas like REITs and supply chain ABS [4] Service Trusts as a Growth Driver - Service trusts, including family trusts and charitable trusts, are anticipated to become a growth area, as they do not rely on capital consumption and can attract high-net-worth clients [5] - The regulatory authority will monitor the progress of asset management trust business rectifications, encouraging companies to reduce existing business volumes and transition into professional investment management [5]

Core Viewpoint - The "Asset Management Trust Management Measures (Draft for Comments)" was released by the National Financial Supervision Administration, aiming to strengthen regulatory requirements for asset management trusts and delineate new red lines for various business practices [1][2]. Group 1: Background and Purpose - The current regulations for trust companies have been in place since 2007 and require adjustments to align with industry practices. The new measures are a response to previous regulations established in 2018 and 2023, aiming to enhance supervision and risk prevention in the trust industry [3]. - The draft aims to solidify the regulatory framework for the healthy development of asset management trusts [3]. Group 2: Structure and Content of the Measures - The draft consists of five chapters and 85 articles, covering general principles, product establishment, operational management, supervision, and definitions [4]. - It defines asset management trusts as private asset management products based on trust law, emphasizing the need for active management and adherence to market principles [5]. Group 3: Sales Requirements - Trust companies must clearly disclose risks to investors and cannot guarantee returns or obscure actual risk conditions. There are strict requirements for risk disclosure and sales management [7]. - Trust companies are required to assess the risk tolerance of individual investors and match them with appropriate products [7]. Group 4: Investment Management Requirements - Trust companies must manage trust assets legally and transparently, adhering to specified investment scopes and managing different asset categories distinctly [8]. - There are limits on the proportion of single asset investments within trust products [8]. Group 5: Risk Management and Information Disclosure - A comprehensive risk management system must be established, covering various types of risks, including operational, credit, market, and liquidity risks [9]. - Information disclosure requirements are detailed, ensuring transparency in trust asset management [9]. Group 6: Regulation of Key Business Areas - The draft prohibits channel business and fund pool operations, mandating that trust companies take active management responsibility for their products [10]. - It also sets strict guidelines for related party transactions, requiring accurate identification and regulation of such transactions [10]. Group 7: Rectification of Existing Trust Business - Trust companies are required to review existing asset management trust businesses against the new measures, develop rectification plans, and ensure orderly reduction of non-compliant business scales [11].