Core Viewpoint - The National Financial Regulatory Administration has established the "Interim Measures for the Supervision and Management of Custody Business of Commercial Banks" to enhance the supervision and management of custody services, ensuring standardized and healthy development of the business [1] Group 1: Regulatory Framework - The new measures clarify the basic rules for commercial banks to conduct custody business, emphasizing bottom-line requirements and detailed management standards for key aspects [1] - The measures aim to promote the integrity of legal contracts, improve internal governance, enhance service capabilities, and effectively manage risks [1][3] Group 2: Custody Business Principles - Commercial banks must adhere to principles of honesty, diligence, independence, and risk isolation when providing custody services [2] - The measures specify that banks should conduct thorough assessments of the capabilities and service levels before engaging in custody for non-standard assets [2] Group 3: Prohibited Responsibilities - The measures outline prohibited responsibilities and actions for banks, including taking on credit or market risks of custody products and providing guarantees for principal or returns [2][3] Group 4: Supervision and Management - Continuous supervision by the National Financial Regulatory Administration and its branches is mandated, with a focus on compliance and prudence in custody business [3] - Banks are required to establish a robust governance structure for custody business, addressing management systems, business independence, and data protection [3][4] Group 5: Risk Management and Independence - Banks must develop a risk management system that aligns with the scale and complexity of their custody business, ensuring effective separation from other business operations [4] - There is a need for stringent due diligence and management of custody products and partner institutions, with clear standards for client qualifications and product types [4]

Core Viewpoint - The Financial Regulatory Bureau has issued the "Supervision and Management Measures for Custody Business of Commercial Banks (Trial)" to enhance supervision and promote the healthy development of custody business in commercial banks [1][2]. Group 1: Key Provisions of the Measures - The Measures consist of five chapters and 49 articles, clarifying the concept and basic principles of custody business, detailing the responsibilities of custodians, and establishing management requirements [1]. - It emphasizes the need for a sound governance structure and outlines the supervisory responsibilities of regulatory authorities regarding custody business [1]. - The Measures also specify transitional provisions for implementation, aiming to strengthen risk management and promote high-quality development of custody services [1]. Group 2: Importance and Implications - The introduction of the Measures addresses the regulatory shortcomings in the custody business of domestic commercial banks, highlighting the importance of clearly defining roles and responsibilities [2]. - It aims to prevent the transfer of risks from custody products to the banks themselves, thereby enhancing financial stability [2]. - The Measures prohibit banks from assuming certain risks associated with custody products, such as credit and market risks, and from providing guarantees or liquidity support [2][3]. Group 3: Market Impact - The Measures aim to eliminate the misconception that bank custody equates to implicit guarantees, thereby establishing a clear risk isolation framework [3]. - Following the implementation of the Measures, competition among banks will shift towards asset security, operational efficiency, and transparency in information disclosure, moving away from reliance on implicit credit enhancement [3].

Core Viewpoint - The introduction of the "Supervision and Management Measures for Custody Business of Commercial Banks (Trial)" aims to strengthen the supervision and management of custody business in commercial banks, promoting standardized and healthy development in this sector [1][2]. Group 1: Key Provisions of the Measures - The Measures consist of five chapters and 49 articles, clarifying the concept and basic principles of custody business, detailing the responsibilities of custodians, and establishing management requirements [1]. - It emphasizes the need for a robust governance structure and outlines the supervisory responsibilities of regulatory authorities regarding custody business [1]. - The Measures also specify transitional provisions for implementation, ensuring a clear framework for commercial banks to follow [1]. Group 2: Importance and Implications - The Measures address the regulatory shortcomings in the custody business of domestic commercial banks, highlighting the importance of clearly defining roles and responsibilities [2]. - It aims to prevent the transfer of risks from custody products to the banks themselves, thereby enhancing financial stability [2]. - By prohibiting certain actions such as providing guarantees or engaging in investment decision-making, the Measures create a clear boundary between custodial duties and other financial responsibilities [3]. Group 3: Market Impact - The implementation of the Measures is expected to shift the competitive landscape, moving away from implicit guarantees towards a focus on asset safety, operational efficiency, and transparency [3]. - This transition will encourage banks to enhance their professional service capabilities rather than relying on channel dependencies [3].

Core Viewpoint - The newly released regulatory framework for commercial bank custody services aims to enhance risk management, service quality, and transparency in the industry, with a transition period for existing businesses until February 1, 2029 [1][3][12] Group 1: Regulatory Framework - The National Financial Supervision Administration has issued the "Supervision and Management Measures for Commercial Bank Custody Business (Trial)" which will take effect on February 1, 2026, and includes a three-year rectification period for existing businesses [1][7] - The new measures require banks to identify and assess risks accurately, strengthen risk management systems, and enhance the independence of custody services [1][3] Group 2: Basic Services - The measures specify seven types of basic services that banks can provide, including account opening, asset custody, clearing and settlement, accounting, asset valuation, information disclosure, and investment supervision [2][8] - Banks must sign custody contracts that clearly outline compliance, risk disclosure, and the rights and obligations of all parties involved [2][8] Group 3: Prohibitive Duties - The measures outline eight prohibited duties and behaviors for banks in custody operations, aiming to clarify responsibilities and prevent excessive risk-taking [4][10] - New prohibitions include not providing liquidity support or financing commitments for custody products and not disclosing information on behalf of product managers [11] Group 4: Market Impact - The implementation of these measures is expected to reshape the custody business ecosystem by eliminating "pseudo-custody" practices and promoting competition based on service quality rather than risk coverage [4][10] - The measures aim to correct the misconception that bank custody equates to implicit guarantees, thereby establishing a clear risk isolation framework [5][11] Group 5: Transition and Compliance - Banks are required to conduct a comprehensive review of existing businesses, establish a problem ledger, and develop a phased rectification plan by February 1, 2029 [12] - Internal systems must be improved, operational processes revised, and staff trained to ensure compliance with the new regulations [12]

Core Viewpoint - The implementation of the new regulatory framework for commercial bank custody services aims to enhance risk management, improve service capabilities, and ensure compliance within the industry, addressing long-standing issues of unclear responsibilities and risk control standards [1][3]. Group 1: Regulatory Framework - The National Financial Regulatory Administration has issued the "Supervision and Management Measures for Commercial Bank Custody Business (Trial)" which will take effect on February 1, 2026, with a three-year transition period for existing businesses [1]. - The new measures require banks to identify and assess risks accurately, strengthen risk management systems, and enhance the independence of custody services [1][3]. Group 2: Service Specifications - The measures specify seven basic services that commercial banks can provide, including account opening, asset custody, clearing and settlement, accounting, asset valuation, information disclosure, and investment supervision [2]. - Banks must sign custody contracts that clearly outline compliance, risk disclosure, and the rights and obligations of all parties involved [2]. Group 3: Risk Management and Responsibilities - The new regulations introduce eight prohibited responsibilities and actions for banks in custody operations, aiming to clarify responsibilities and prevent excessive risk-taking [4]. - Prohibitions include providing liquidity support or financing commitments for custody products, which helps to establish a clear boundary between bank responsibilities and product risks [5]. Group 4: Transition and Compliance - A three-year transition period is set for existing businesses to comply with the new regulations, requiring banks to classify asset risks and make necessary provisions [6]. - Banks are advised to conduct a comprehensive review of existing businesses, update internal procedures, and enhance monitoring systems to align with the new regulations [6].

Core Viewpoint - The National Financial Supervision Administration has established the "Supervision and Management Measures for Custody Business of Commercial Banks (Trial)" to enhance the supervision and management of commercial banks' custody business, promoting its standardized and healthy development [1] Group 1: Regulatory Framework - The newly implemented measures aim to fill the regulatory gap in the custody business of commercial banks, which has seen significant growth and diversification in recent years [1] - The measures consist of five chapters and 49 articles, covering general principles, custody responsibilities, management requirements, supervision and management, legal responsibilities, and supplementary provisions [1] Group 2: Business Requirements - The measures define the concept of custody business and outline the basic principles for conducting such business, requiring commercial banks to establish a sound governance structure and management system for custody services [1] - Banks are expected to provide appropriate custody services based on their capabilities and service levels [1] Group 3: Supervision and Compliance - The measures reinforce continuous supervision, regulatory penalties, data reporting, and self-regulation arrangements to ensure compliance within the custody business [1]

Core Viewpoint - The Financial Regulatory Bureau has officially released the "Supervision and Management Measures for Custody Business of Commercial Banks (Trial)" to strengthen the supervision of custody business and promote its standardized and healthy development [1][3]. Group 1: Overview of the Measures - The Measures consist of five chapters and 49 articles, covering general principles, custody responsibilities, management requirements, supervision and legal responsibilities, and supplementary provisions [1]. - The Measures clarify the concept and basic principles of custody business for commercial banks [1]. - It specifies the responsibilities that commercial banks must undertake when conducting custody business, emphasizing the accountability of custodians [1]. Group 2: Management and Supervision Requirements - The Measures establish basic management requirements for custody business, mandating the establishment of a sound governance structure [1]. - It outlines the supervisory responsibilities of regulatory authorities regarding the custody business of commercial banks and the legal liabilities involved [1]. - The Measures also detail the internal management requirements for custody business and reinforce continuous supervision, regulatory penalties, data reporting, and self-regulatory arrangements [1]. Group 3: Prohibited Responsibilities and Actions - To address unclear boundaries of responsibilities leading to excessive risk-taking, the Measures list prohibited responsibilities and actions for commercial banks in custody business [2]. - Prohibitions include assuming credit risk, market risk, providing guarantees, and participating in investment decision-making for custody products [2]. - The Measures aim to ensure that commercial banks do not mix custody product assets with other assets and maintain clear operational boundaries [2]. Group 4: Importance and Future Directions - The custody business of commercial banks plays a crucial role in enhancing market supervision, standardizing investment operations, and preventing moral hazards [3]. - The implementation of the Measures is expected to fill the regulatory gaps in the custody business and promote high-quality development [3]. - The Financial Regulatory Bureau will continue to supervise commercial banks to improve their management and risk prevention capabilities, ensuring the custody business develops in a standardized and healthy manner [3].

Core Viewpoint - The National Financial Regulatory Administration has issued the "Supervision and Management Measures for Custody Business of Commercial Banks (Trial)" to enhance the supervision and management of custody business, promoting its standardized and healthy development [1][2]. Group 1: Regulatory Framework - The Measures consist of five chapters and 49 articles, covering general principles, custody responsibilities, management requirements, supervision and legal responsibilities, and supplementary provisions [2]. - The Measures define the concept of custody business and the basic principles for conducting such business, requiring commercial banks to establish a sound governance structure and management system for custody services [2]. Group 2: Implementation and Oversight - Commercial banks are mandated to provide appropriate custody services based on their capabilities and service levels, while the Measures also strengthen ongoing supervision, regulatory penalties, data reporting, and self-regulation [2]. - The National Financial Regulatory Administration will continue to urge commercial banks to enhance their management levels and risk prevention capabilities, promoting standardized, healthy, and high-quality development of custody business [3].

Core Viewpoint - The article discusses the implementation of the "Supervision and Administration Measures for Custody Business of Commercial Banks (Trial)" by the Financial Regulatory Bureau, which aims to clarify the concept and basic principles of custody business, enhance governance structures, and establish management systems for commercial banks [1][3]. Group 1: Regulatory Framework - The new regulations will take effect on February 1, 2026, with a three-year transition period for existing businesses that do not meet the requirements [1]. - The measures emphasize the need for commercial banks to provide appropriate custody services based on their capabilities and service levels, and to strengthen internal governance and risk management [3][8]. Group 2: Custody Business Definition and Scope - Custody refers to the act of commercial banks providing asset safekeeping and related services as an independent third party for various financial products and investment portfolios [3]. - The article highlights the growing scale and diversity of custody services offered by commercial banks, including for wealth management products, trust funds, and pension funds [3]. Group 3: Risk Management and Responsibilities - The measures introduce a negative list to clarify prohibited responsibilities and behaviors for commercial banks, including the prohibition of assuming credit and market risks for custody products [6]. - Commercial banks are required to conduct thorough assessments of their capabilities and the risks associated with non-standard assets before providing custody services [5][6]. Group 4: Internal Management and Compliance - The regulations outline internal management requirements for custody business, including establishing a robust risk management system and ensuring the independence of custody operations [8]. - Continuous supervision by the Financial Regulatory Bureau will focus on the compliance and prudence of custody business, which will be included in regulatory ratings [8].

Core Viewpoint - The National Financial Supervision Administration has announced a trial regulation for the supervision and management of custodial services by commercial banks, effective from February 1, 2026, aimed at ensuring the healthy development and compliance of custodial business practices. Group 1: General Provisions - The regulation aims to promote the standardized and healthy development of custodial services by commercial banks and strengthen supervision based on relevant laws [2] - Custodial services are defined as the act of commercial banks providing asset custody and related services as an independent third party within China [2] - The products that commercial banks can manage include various financial products and special funds, such as social security funds and enterprise annuities [2] Group 2: Custodial Responsibilities - Commercial banks are required to provide services such as account opening, asset custody, settlement, accounting, asset valuation, information disclosure, and investment supervision [4] - A custodial contract must be signed, detailing the rights and obligations of all parties involved, as well as the responsibilities and terms of the contract [4] - Banks must evaluate the capital strength, governance, compliance management, risk control, and market influence of product managers before providing custodial services [4][10] Group 3: Management Requirements - Commercial banks must establish a governance structure for custodial services, ensuring that the board and senior management are responsible for these operations [15] - A risk management system must be in place that is commensurate with the scale and complexity of the custodial business [15] - Banks are required to maintain effective separation between custodial services and other business operations to prevent conflicts of interest [30] Group 4: Supervision and Legal Responsibilities - The National Financial Supervision Administration will conduct ongoing supervision of custodial services, with the authority to enforce corrective measures for non-compliance [41] - Violations of the regulations may result in penalties, including the suspension of related business activities [42] - Banks must report significant matters related to custodial services to the National Financial Supervision Administration in a timely manner [45]