China regulates risks in trust sector

(MENAFN) The Chinese banking regulator asked trust companies to reinforce risk management, stressing the important role of shareholders and stopping shadow banking business, Xinhua reported. According to a guideline released by the China Banking Regulatory Commission (CBRC), trust companies should implement comprehensive risk control in product design, supervise risk and disclose information. The guideline ruled all investment businesses related to shadow banking which are not following standards, such as cash pooling, and motioned companies to provide similar services to draft and submit plans, which allows regulators to rectify their products by the end of June. The CBRC recommended trust companies to restructure their business and services, focusing on conventional services such as equity investment, mergers and acquisition services and assets management.