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, promoting a return to core functions and risk-controlled development [1][3][8]. 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 also clarifying the types of services trust companies can provide [4][5]. - Certain non-core and conflicting business activities have been eliminated, such as acting as initiators of investment funds and providing intermediary services [4][5]. 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 [5][6]. - This shift is anticipated to foster innovation and breakthroughs in high-quality development areas such as serving the real economy, wealth management, family trusts, and charitable trusts [5][6]. Governance and Risk Management Enhancements - New requirements include a minimum registered capital of 50 million RMB, regular evaluations of major shareholders, and the establishment of a chief compliance officer to strengthen internal controls and compliance management [6][7]. - The regulations aim to address concentrated risks in areas like real estate financing and local government hidden debts, enhancing the overall risk management framework [6][7]. Transition and Rectification of Existing Businesses - Trust companies are required to identify and rectify existing businesses that do not comply with the new regulations, with a structured plan for reducing non-compliant business scales [8][10]. - The industry is expected to undergo significant restructuring, with traditional high-leverage models facing pressure, while compliant and innovative companies may gain competitive advantages [8][9]. Industry Differentiation and Compliance - There is a noticeable disparity in compliance levels among trust companies, particularly regarding registered capital and information disclosure practices [9]. - Companies are encouraged to develop a scientific rectification roadmap and enhance transparency in information disclosure to protect beneficiary rights [10].