China’s banking and insurance regulator issued new rules specifying how insurance companies can invest asset management product funds and spelling out the qualifications for investors in such products, reported Caixin.
The regulations, taking effect May 1, clarify requirements for a $390 billion market and are part of a long-running project by financial regulators to erect a framework for an industry that manages billions of dollars of investors’ funds.
The asset management rules create industry-specific policies to supplement sweeping new regulations issued in 2018. The overarching regulatory framework covers all financial institutions including banks and insurers and is scheduled to take full effect next year after a grace period for institutions to come into compliance. But an official from the China Banking and Insurance Regulatory Commission (CBIRC) recently signaled a possible delay as some enterprises may have trouble meeting the original deadline partly because of the Covid-19 outbreak.
In line with the general rules, the policy document specifies that insurers can invest asset management products in government bonds, central bank bills, corporate bonds, deposits, interbank deposit certificates, mutual funds, securities and other equity assets.