China Banking and Insurance Regulatory Commission Issues Stringent Guidelines for Trust Business Standards and Practices

Regulation on the Standards and Practices of Trust Business in China

Issuing Authority: The China Banking and Insurance Regulatory Commission CBIRC

Regulation Number: CBIRC Reg. No. 2023XX

Date Issued: March 20, 2023

Subject Areas: Finance, Economics, Auditing

Doc Type: Circular

The China Banking and Insurance Regulatory Commission hereby announces a series of stringent guidelines med at regulating the operations within Trust Companies across the country.

In light of recent developments in financial practices, it has become imperative to ensure that trust business activities are carried out with due diligence. The issuance of this circular address concerns regarding the size of trust scales, with an emphasis on mntning transparency and integrity in transactions.

This document outlines several key points designed to enhance regulatory standards:

1. Regulatory Compliance: Trust companies must adhere strictly to existing legal frameworks, including but not limited to financial laws and regulations stipulated by the CBIRC. This ensures that all business operations are transparent and within legal bounds.

2. Due Diligence: A rigorous due diligence process is mandatory for every trust operation initiated by any party associated with a trust company. The purpose of this measure is to guarantee that assets, risks, returns, and responsibilities are accurately assessed before any transaction takes place.

3. Size and Scale Control: There will be measures imposed on the size and scale of trust activities to prevent the accumulation of significant financial risks within individual trust companies or across sectors. The CBIRC encourages a balanced development approach that promotes sustnable growth rather than explosive expansion.

4. Transparency Measures: Trust companies are expected to mntn high levels of transparency in their dealings. This includes regular reporting on trust asset management, performance evaluations, and adherence to the principles outlined by the regulatory body.

5. Risk Management and Mitigation: Enhanced guidelines on risk management practices have been introduced. This ensures that trust companies can identify potential risks promptly and take preventive measures agnst them, thereby safeguarding investors' interests.

6. Enhanced Audit Processes: The circular mandates stringent audit procedures to monitor compliance with the regulations by trust companies. Indepent audits will be conducted regularly to assess adherence to guidelines set out in this document.

7. Promoting Responsible Business Practices: Trust companies are encouraged to implement responsible business practices that align with ethical standards and contribute positively to society.

The China Banking and Insurance Regulatory Commission remns committed to upholding robust financial governance practices across the trust sector, ming for enhanced transparency, integrity, and safety for all stakeholders involved.

This circular stands as a testament to the regulatory body's efforts towards fostering an environment where trust business activities are conducted with professional rigor and respect for investors' rights.

For further information or inquiries regarding compliance matters detled in this document, please contact the China Banking and Insurance Regulatory Commission directly through their official channels. We encourage all trust companies to review this circular thoroughly and implement its provisions promptly to ensure regulatory compliance.

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