Leading Chinese trust company China Everbright Trust was suspended from the financing trust business because its nonstandard credit business in the first half of 2020 exceeded a regulatory limit, reported Caixin.
Everbright Trust denied such a suspension, but some of its clients turned to other trust companies saying Everbright cannot fulfill its contracts, according to a Shanghai trust firm. In addition, Ever-bright applied to regulators Friday for a financing trust product but was turned down, a Caixin source close to the matter said.
Over the past several years, regulators have taken a series of measures to rein in the fastest-growing shadow banking sector. The China Banking and Insurance Regulatory Commission last month issued draft rules to cap trust companies’ total investments in nonstandard credit assets at 50% of the funds they raise from the public.