China’s top securities regulator has issued a final draft of new regulations regarding wealth management products sold privately as a means of raising huge sums of capital to purchase company stock, Caixin reports.
The rules, effective immediately, mark a quick turn around from the splurge of pledges and commitments by senior officials last week in the wake of disappointing growth data and panicky markets.
The aim of the guidelines fits in line with Beijing’s broader aims of stomping out financial risk in China’s enormous $16 trillion asset management industry. Regulations on a similar theme were published in April, but some of these have been subject to an “appropriate relaxation,” according to the China Securities Regulatory Commission (CSRC), after fears of a slowdown began to mount.
Stabilising its volatile markets and restoring confidence in investors is a priority for the financial sector, said head of the CSRC Liu Shiyu. Included in the latest rules is a one-year transition period to prevent fund managers making hasty sell-offs in order to meet liquidity requirements.