Core Viewpoint - The recent draft of the "Asset Management Trust Management Measures" by the Financial Regulatory Bureau signifies a shift towards a more refined regulatory framework for the trust industry, addressing the need for updated regulations after 18 years of existing rules [1][2] Regulatory Framework - The draft enhances the regulatory chain for the trust industry, following previous regulations that clarified business boundaries and strengthened full-process supervision [1][2] - It emphasizes the private equity nature of asset management trusts, limiting investor numbers to a maximum of 200 and imposing stricter qualifications for high-risk products [2] Business Challenges - 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 [2][3] - Trust companies are required to enhance their operational capabilities, including building comprehensive research systems and improving IT infrastructure for daily valuation and net asset value disclosures [3] Growth Opportunities - The draft opens avenues for high-quality development in the trust industry, with a focus on standardized trust products becoming a core area of competition [3][4] - Trust companies can leverage their institutional flexibility to create differentiated products, such as family trusts and asset allocation services, to compete with public funds and securities asset management products [4] Long-term Development - The regulatory body will monitor the progress of asset management trust business rectifications, urging companies to reduce existing business steadily [4] - The industry is expected to achieve sustainable development only by genuinely transforming into professional investment management institutions [4]

Core Insights - The total asset management scale of the trust industry in China is projected to reach 32.43 trillion yuan by June 2025, marking an increase of 2.87 trillion yuan from the previous year, which represents a growth rate of 9.7% [1] - This is the first time that the trust scale has surpassed 30 trillion yuan, positioning it as the third largest asset management sector, following insurance asset management and public funds [1] - The transformation of trust companies has shown positive results, shifting from traditional non-standard financing to more diversified and specialized services such as asset service trusts, asset management trusts, and charitable trusts [1] Industry Trends - The trust industry is experiencing a structural optimization, with a significant shift in business models from traditional financing trusts and channel businesses to asset management trusts and asset service trusts [1] - The "three-category" policy for trust business has led to asset management trusts, asset service trusts, and asset management trusts becoming the dominant business models driving the current growth in trust asset scale [1]

Group 1: Regulatory Changes - The National Financial Supervision Administration revised the "Trust Company Management Measures," effective from January 1, 2026, to guide the transformation of the trust industry towards high-quality development[2] - The revised measures emphasize the role of trustees, focusing on core responsibilities and adjusting the business scope to include asset service trusts, asset management trusts, and charitable trusts[2][8] Group 2: Business Scope Adjustments - The new business scope reduces the previous five types of trusts to three, enhancing the focus on wealth management and administrative services while weakening the financing function of trust companies[9][10] - Trust companies are prohibited from guaranteeing the safety of trust assets or minimum returns, breaking the rigid repayment model[10] Group 3: Governance and Risk Management - Trust companies are required to strengthen corporate governance, integrating party building with governance, and establishing internal assessment and incentive mechanisms[11][12] - The minimum registered capital for trust companies is raised to 500 million RMB, enhancing capital and reserve management[12][13] Group 4: Strategic Development Directions - Trust companies can choose different strategic directions based on their strengths, including boutique private banking, multi-asset investment services, and administrative service providers[16][17][18] - The shift towards wealth management and asset management services allows trust companies to cater to high-net-worth clients and provide comprehensive financial services[19] Group 5: Risks and Challenges - There is a risk of trust companies being overly reliant on past business models, which may delay necessary transformations[20] - The pace of professionalization in the trust industry may not meet expectations, potentially leading to unsuccessful transitions[20]

Core Viewpoint - The revised "Trust Company Management Measures" will take effect on January 1, 2026, marking the first comprehensive update since its implementation in 2007, aimed at enhancing risk prevention, transformation, and effective regulation of trust companies [1][3]. Group 1: Key Revisions - The revised measures focus on four main areas: emphasizing the core responsibilities of trust companies, strengthening corporate governance, enhancing risk prevention, and reinforcing regulatory requirements [3][4]. - Trust companies are now required to establish a Chief Compliance Officer as per regulatory guidelines, a move that aligns with earlier regulations introduced in March 2023 [6][7]. Group 2: Business Scope Adjustments - The business scope of trust companies has been adjusted to include three main categories: trust business, proprietary asset liability business, and other services [4][11]. - The trust business has been refined to consist of asset service trusts, asset management trusts, and charitable trusts, while proprietary asset liability business now allows for liquidity loans from shareholders and related parties [4][5]. Group 3: Risk Management and Compliance - Trust companies must enhance their risk management frameworks, focusing on compliance and operational risks, and are required to establish a risk reserve management mechanism [10][11]. - The measures prohibit trust companies from promising asset safety or guaranteed minimum returns, and they must ensure that investment products align with investors' risk tolerance [10][11]. Group 4: Governance and Accountability - The revised measures emphasize the importance of corporate governance, requiring independent directors to lead key committees related to audit, nomination, and remuneration [12]. - Trust companies are mandated to manage shareholder behavior and related transactions rigorously, ensuring fair market practices and preventing regulatory arbitrage [12].

Core Points - The revised "Trust Company Management Measures" marks the first amendment after 18 years, aiming to promote the trust industry's core principles, deepen reform, and effectively prevent risks, set to take effect on January 1, 2026 [1] Group 1: Business Scope Clarification - The new regulations define the business scope of trust companies into three categories: trust business, asset liability business, and other businesses [2] - The previous five types of trust business have been consolidated into three: asset service trust, asset management trust, and public welfare trust [2] - The regulations allow trust companies to apply for liquidity support loans from the Trust Industry Guarantee Fund Company and clarify the prohibition of providing external guarantees [2] Group 2: Governance Mechanism Enhancement - The revised measures require trust companies to strengthen shareholder behavior management and conduct regular evaluations of major shareholders [3] - Trust companies must appoint a Chief Compliance Officer to oversee compliance management and internal control systems [3] - The board of directors is held accountable for compliance management and risk control effectiveness, enhancing corporate governance and operational transparency [3] Group 3: Prohibited Behaviors - The new regulations explicitly prohibit trust companies from promising profit guarantees, providing channel services, and engaging in fund pool operations [4] - Trust companies are not allowed to invest trust funds directly in commercial bank credit assets or in industries prohibited by laws and regulations [4] - The measures aim to guide trust companies back to their core business of asset and wealth management, avoiding excessive diversification and promoting sustainable industry development [5]

Core Points - The revised "Trust Company Management Measures" aims to promote the core essence of trust, deepen reform and transformation, and effectively prevent risks, set to take effect on January 1, 2026 [1] Business Scope - The new measures clarify that the business scope of trust companies includes three categories: trust business, asset liability business, and other businesses [1] - The previous five types of trust business have been adjusted to three: asset service trust, asset management trust, and public welfare trust [1] - The measures allow trust companies to apply for liquidity support loans from the Trust Industry Guarantee Fund Company and specify that they can provide investment advisory, consulting, and custodial services for financial institutions and their managed asset management products [1][2] Governance Mechanism - The revised measures require trust companies to strengthen shareholder behavior management and conduct regular evaluations of major shareholders [2] - Trust companies must report any violations by shareholders or actual controllers to the financial regulatory authority and implement corrective measures [2] - The board of directors is held responsible for compliance management and risk control, and a Chief Compliance Officer must be appointed to oversee internal control and compliance management systems [2] Prohibited Behaviors - The revised measures explicitly prohibit trust companies from promising guaranteed returns, providing channel services, and engaging in fund pool operations [3][4] - Trust companies must ensure that the management and disposal of trust assets comply with legal regulations and the terms of trust documents, and they cannot invest trust funds directly in commercial bank credit assets [3][4] - Various other prohibited actions include misleading investors, engaging in improper transactions with related parties, and using trust assets for non-trust purposes [4] Industry Implications - The new measures are expected to enhance the governance structure of trust companies, improving operational transparency and supporting high-quality development in the trust industry [3] - By clarifying business scope and operational rules, the measures guide trust companies to focus on core businesses such as asset management and wealth management, promoting healthy and sustainable development in the industry [4]

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, emphasizing a return to core responsibilities and risk-controlled development [1][2][7]. 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 eliminating unrelated intermediary businesses [3][4]. - New provisions allow trust companies to apply for liquidity support from the trust industry guarantee fund and provide investment advisory and technical services for financial institutions [3][4]. 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 [4][5]. - The shift towards a "trust management" model aims to foster innovation and high-quality development in areas such as wealth management and family trusts, while reducing leverage and hidden risks [4][5]. Enhanced Governance and Risk Management - The new regulations set a minimum registered capital requirement of 500 million RMB and mandate the establishment of a chief compliance officer to strengthen internal controls and compliance management [5][6]. - Trust companies are required to conduct annual external audits and improve risk management mechanisms to prevent systemic risks [6][7]. Transition and Rectification of Existing Businesses - Trust companies must identify and rectify existing non-compliant businesses according to the new regulations, with a focus on orderly reduction of problematic business scales [7][9]. - The industry is expected to undergo significant restructuring, with traditional high-leverage models facing pressure, while compliant and innovative companies may gain competitive advantages [7][8]. Industry Differentiation - There is a noticeable disparity in the compliance levels among trust companies, particularly regarding registered capital and information disclosure practices [8][9]. - Companies are encouraged to develop a scientific rectification roadmap and enhance transparency to protect beneficiary rights during the transition [9].

Core Viewpoint - The revised "Trust Company Management Measures" aims to enhance the regulatory framework for trust companies in China, focusing on risk prevention, capital requirements, and business scope adjustments, effective from January 1, 2026 [2]. Summary by Sections Minimum Capital Requirements and Business Restrictions - The minimum registered capital for trust companies is raised from 300 million RMB to 500 million RMB, requiring a one-time cash payment [5]. - Trust companies must focus on their core responsibilities and adhere to the principle of "seller's responsibility, buyer's risk" while breaking the rigid repayment model [5]. - Several business red lines are established, including prohibitions on guaranteeing asset safety or minimum returns, misleading investors, and engaging in regulatory evasion [5]. Business Structure Reconstruction - The business scope of trust companies is redefined to include only asset service trusts, asset management trusts, and public welfare trusts [8]. - New provisions allow trust companies to apply for liquidity loans from shareholders and the trust industry guarantee fund, while prohibiting external guarantees [8]. - Additional services such as investment consulting and technical services for financial institutions are permitted, while unrelated intermediary services are eliminated [8][9]. Corporate Governance Reforms - The establishment of a specialized committee for the protection of client rights is mandated, led by independent directors [12]. - Trust companies are required to conduct regular evaluations of shareholders and report any violations [12]. - Enhanced management of related party transactions and salary structures is emphasized, including conditions for deferred payments and clawbacks [12]. Risk Management and Compliance - Trust companies must strengthen internal controls and risk management, focusing on compliance and operational risks [13]. - A comprehensive management process for trust business is outlined, covering documentation, legality, risk disclosure, and asset management [13]. - Annual external audits are mandated to ensure compliance across all business areas [13].

Core Viewpoint - The National Financial Regulatory Administration has issued a revised "Trust Company Management Measures," marking the first comprehensive revision since its implementation in 2007, effective from January 1, 2026, aimed at enhancing regulatory frameworks and risk management in the trust industry [1]. Summary by Sections Minimum Capital Requirements and Business Restrictions - The minimum registered capital for trust companies has been raised from 300 million RMB to 500 million RMB or its equivalent in freely convertible currency, requiring a one-time cash capital contribution [3]. - Trust companies are mandated to focus on their core responsibilities and adhere to the principle of "seller responsibility, buyer risk," breaking the rigid guarantee of returns [3]. - Multiple business red lines have been established, prohibiting promises of capital protection, misleading investors, and engaging in certain high-risk activities [3]. Business Structure and Operations - The revised measures restructure the business scope of trust companies, limiting operations to asset service trusts, asset management trusts, and charitable trusts [5]. - New provisions allow trust companies to apply for liquidity loans from shareholders and the Trust Industry Guarantee Fund, while prohibiting external guarantees [5][6]. Corporate Governance Reforms - The measures enhance corporate governance by requiring the establishment of a specialized committee for the protection of client rights, led by independent directors [7]. - Trust companies must conduct regular evaluations of shareholders and report any violations, with provisions for whistleblowing by employees and external auditors [7][8]. Risk Management and Internal Controls - The measures emphasize the need for robust internal controls and risk management, focusing on compliance and operational risk [10]. - Trust companies are required to conduct annual external audits covering all business areas, ensuring comprehensive oversight [10]. Cultural and Ethical Standards - Trust companies are encouraged to foster a culture of integrity and compliance, promoting principles such as honesty, prudence, and legal adherence [9].

Core Viewpoint - The Financial Regulatory Administration has revised the "Trust Company Management Measures" to enhance the trust industry's core functions, promote reform and transformation, and effectively manage risks [1][2] Summary by Sections Business Scope - The revised measures outline three main business areas for trust companies: trust business, inherent asset liability business, and other services [1] - Trust business is now categorized into asset service trusts, asset management trusts, and public welfare trusts, reducing the previous five categories to three [1] - Inherent asset liability business now includes provisions for liquidity loans from shareholders and related parties, and allows for liquidity support loans from the trust industry guarantee fund company, while eliminating external guarantee services [1] Other Business Activities - The revised measures remove four intermediary business activities that are unrelated to the core operations of trust companies, including investment fund activities, custody services, and financial consulting [2] - Trust companies must meet relevant qualification requirements set by other regulatory authorities when engaging in activities such as securities underwriting and asset securitization services [2]