April 27 11:07
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- China Pushes Back Compliance Deadline for New Asset Management Rules by 18 Months
China on Friday published the final version of unified regulations for the country's $15 trillion asset-management industry, pushing back the deadline for compliance by more than a year.
The draft rules, which aim at taming excessive leverage and risks in the sector, have been circulating since November 2017 for public comment. They ran into months-long resistance from financial institutions including banks, which face profitability and liquidity pressure as the new regulations force them to set aside more cash to migrate off-balance assets back onto their books.
In an apparent concession by policymakers, the final version extends the grace period for compliance by 18 months to the end of 2020, from the previously deadline of June 30 next year. It also provides a detailed definition of the implicit guarantee for asset management products, as well as penalties for violators.
The rules were jointly published by the People's Bank of China, the newly formed banking and insurance regulator, the securities watchdog and the State Administration of Foreign Exchange, after being approved in March by the State Council, the country's cabinet.