The new crown pneumonia epidemic has had a two-way impact on the asset management business from the capital side and the asset side, especially on the asset side. Some industries and enterprises have increased operating difficulties, and have also made it more difficult to rectify and reform the asset management business. The transition to new asset management regulations How long the delay is more appropriate has become the focus of recent market discussions.

  On July 31, the People’s Bank of China, together with the China Banking and Insurance Regulatory Commission, decided to extend the transition period of the “Guiding Opinions on Regulating the Asset Management Business of Financial Institutions” (hereinafter referred to as the “New Asset Management Regulations”) to the end of 2021, and establish and improve the incentive and restraint mechanism. Improve supporting policy arrangements and promote the standardized development of the asset management industry in a steady and orderly manner.

  In response to a reporter’s question, the central bank pointed out that extending the transition period by one year will allow more stock assets with longer maturities to expire naturally, which will help avoid the pressure on financial institutions from the centralized disposal of stock assets. At the same time, the person in charge also pointed out that the transition period should not be extended too much. The original intention is to ensure the smooth transformation of the asset management business. An extension of one year can encourage financial institutions to "jump up and pick peaches", and promote early rectification of financial institutions while hedging the impact of the epidemic. , Early transformation.

  Has the direction of regulatory reform changed during this postponement? What are the main considerations for the one-year extension? After one year, will the new asset management regulations be extended again according to the situation? What will be the impact if the organization does not complete the rectification on time? What impact will this extension have on the capital market?

  A reporter from China Business News interviewed the person in charge of the relevant department of the central bank and learned that the extension does not involve changes and adjustments in the regulatory standards of asset management business, nor does it mean that the direction of asset management business reform has changed. The main content of the policy arrangement is "appropriate extension + case handling". Appropriate incentives will be given to institutions that complete rectification tasks ahead of schedule, and differentiated punishment measures will be taken for institutions that fail to complete the tasks as scheduled.

More stock assets can mature naturally

  In fact, the market had long expected a one-year extension.

  Earlier, Zhou Xuedong, director of the General Office of the Central Bank and spokesman, said that the new regulations on asset management should be postponed because of the impact of the epidemic this year. It may be more appropriate to postpone one year; Sun Tianqi, director of the Central Bank’s Financial Bureau, said that at present, the global economy has temporarily shrunk due to the impact of the epidemic, and China’s economy is also under downward pressure, which has indeed increased the difficulty of rectifying asset management business standards. The market is very concerned about the policies related to the transition period of the new asset management regulations. Some people suggest that market discipline be strictly enforced, and some people suggest that the transition period be extended by one or two years. Each has its own logic and rationale.

  In April 2018, the "Guiding Opinions on Regulating the Asset Management Business of Financial Institutions" was released, which kicked off the transformation and development of the asset management industry. According to the content, the transition period of the new asset management regulations is until the end of 2020.

  However, since the beginning of this year, due to the impact of the epidemic, the regulatory authorities have drafted a preliminary plan after soliciting opinions from a number of financial institutions.

  "From the perspective of assets to be disposed of, a one-year extension can make a considerable number of long-term stock assets basically expire automatically, avoiding the impact of stock asset disposal." The relevant person in charge of the central bank told China Business News reporter.

  For a long time, the proportion of indirect financing in China is too high, and the proportion of direct financing is relatively low. Residents’ financial asset investment mainly relies on bank deposits, which has formed the characteristics of low risk appetite and high liquidity appetite, and market acceptance of long-term, net worth products The degree is relatively insufficient.

  The above-mentioned person in charge told China Business News that since the release of the new asset management regulations, with the joint efforts of the entire industry, investors have gradually accepted long-term asset management products. However, compared with the real economy’s demand for equity financing and long-term financing, investors still need We will further improve investor education and long-term fund cultivation. On the other hand, my country's financial market is still in a period of development, and the new product investment and research capabilities and innovation capabilities of financial institutions need to be further improved. In the context of accelerating the opening up of the asset management field, a proper extension of the transition period can provide a better environment and conditions for the transformation and upgrading of the asset management industry, which will help support asset management products to increase the allocation of various types of compliant assets.

Case handling prevents the formation of policy games

  A reporter from China Business News learned that this extension does not involve changes and adjustments in the regulatory standards for asset management business, and does not mean that the direction of asset management business reform has changed. The main content of the policy arrangement is "appropriate extension + case handling".

  This means that after the end of 2021, the new asset management regulations will in principle no longer extend the transition period, and relevant financial institutions will be dealt with individually if they are not completed.

  The central bank stated that for individual financial institutions that are still unable to complete rectification before the end of 2021, the financial institution will deal with individual cases after explaining the reasons and agreeing with the financial management department, setting out the resolution plan, monitoring the implementation month by month, and implementing differentiated regulatory measures. .

  Previously, the China Wealth Management 50 Forum and Wudaokou School of Finance of Tsinghua University suggested in the "China Asset Management Business Supervision Research" project report that after the transition period is extended, regulators should ensure the seriousness of regulations, do a good job in anticipation management, and strictly enforce law. Prevent the formation of a policy game again.

There are incentives and punishments

  For the main policy arrangements after the transition period has been extended for one year, the central bank and regulatory authorities will improve the incentive and restraint mechanism to provide supporting support to achieve orderly rectification and transformation.

  "Before, many commercial banks had obstacles to return to the balance sheet, and the asset management business was separated from the on-balance sheet business. This supporting measures provided policy support and space for the return of stock assets to the balance sheet." The person in charge of the close regulatory department told China Business News.

  For example, incentives are reflected in the following: for financial institutions that complete the rectification tasks before the end of 2020, or the rectification will be postponed to the end of 2021, but the progress is faster than planned, and the financial institutions that can complete the rectification tasks ahead of schedule, they will conduct regulatory ratings, macro-prudential assessments, issuance and development of capital supplement tools Provide appropriate incentives for innovative businesses.

  Punishment measures are reflected in: for financial institutions that fail to complete the rectification tasks by the end of 2021 as planned, in addition to punitive measures in terms of regulatory ratings, macro-prudential assessments, and innovative business development, they also adopt regulatory talks, regulatory notifications, and follow-ups as appropriate. Measures such as issuing regulatory letters, suspending business operations, and increasing deposit insurance rates. Regarding acts such as fraud by individual institutions or selective implementation of relevant requirements, the regulatory authorities will adopt regulatory penalties.

  The above-mentioned "China Asset Management Business Supervision Research" project report also suggested that supervision should strengthen the progress management of the pressure drop of old products, balance the distribution of pressure, and promptly take punitive measures to correct the institutions that fail to reach the progress.

  It is worth noting that the central bank, in conjunction with the regulatory authorities, will improve supporting measures for the disposal of stock assets. Specifically, the central bank encourages the orderly disposal of stock assets in a variety of ways such as new product acceptance, market-based transfers, contract changes, and return of accounts. Allow credit assets to be returned to the balance sheet when they meet credit conditions, and appropriately increase regulatory tolerance. After the defaulted credit assets are returned to the balance sheet, they can be disposed of by means of verification, batch transfer, etc. Encourage the disposal of equity assets through market-based transfers and other methods. Properly dispose of the stock assets of the bank's wealth management investment, and avoid rectification by simply selling. Optimize the issuance environment of banks' capital supplementary instruments to further enhance the capital strength of financial institutions. Promote the development of the financial market, improve the ability to continue new products, and guide the asset management industry to provide long-term stable financial support for the capital market.

After the postponement, how much impact will it have on the stock market?

  Regarding the implementation of the appropriate extension of the transition period, the market is generally concerned about the policy effect that it will bring?

  Industry experts believe that after the postponement, in the bond market, more time can be given to financial institutions to issue new products to invest in bond assets, to avoid contraction in bond market demand, and at the same time help stabilize the scale of long-term bond investment; in the stock market, it is also conducive to Stabilize market sentiment and boost confidence.

  "Wealth management subsidiaries will have more time to improve the investment and research system and bring incremental funds to the stock market. The outflow of funds from the stock market that may be caused by the withdrawal of asset management funds will be significantly reduced, avoiding an impact on the market." The industry insider said.

  "The appropriate extension of the transition period will effectively hedge the impact of the epidemic on the real economy and financial markets, and will help further prevent and defuse risks." The head of the relevant department of the central bank said to China Business News.

  First, more stock assets will expire naturally, which will help avoid credit shrinkage caused by the centralized disposal of stock assets, ease the pressure of centralized repayment of financiers, and continue the impact on the real economy when the epidemic impacts aggregate demand and aggregate supply. Financial support also reduces the capital pressure on banks brought by the return of assets to the balance sheet.

  The second is that China’s asset management business is still undergoing a period of transformation and upgrading, and the transition period is appropriately extended, which can give financial institutions more time to cultivate long-term funding sources, innovatively issue new products, and improve the ability to take over stock assets, which is conducive to stabilizing the financial market. The scale of investment should avoid excessive contraction of market capital supply and maintain the stable operation of China’s financial market.

  Third, an appropriate extension of the transition period will also help the real economy make full use of the actual results of China’s financial reform and opening up, actively transform financing models, expand financing sources, transform growth drivers, and create a better environment and conditions for the smooth transition of asset management businesses. .

  "From the current situation, under the impact of the new crown pneumonia epidemic, the overall scale of China's asset management products has maintained a steady growth, and support for financing of the real economy has increased. As China's economy gradually returns to normal, the asset management business will With continued positive development, shadow banking risks will be further reduced, and China's financial market will develop more healthily and steadily." said the person in charge of the central bank.

Stick to the original intention

  A key content of the "New Asset Management Regulations" is to combat channel business and regulatory arbitrage, and reduce cross-financial risks. Among them, it is clear that financial institutions shall not provide channel services for the asset management products of other financial institutions that circumvent investment scope, leverage constraints and other regulatory requirements.

  In this context, the scale of brokerage asset management, trust and fund subsidiaries, which account for a relatively high proportion of non-standard assets and channel businesses, continues to shrink; while the scale of public funds and insurance asset management, which mainly invest in standardized assets, continues to grow positively.

  Data from the central bank showed that the scale of non-standardized debt continued to decrease. At the end of May, the scale of non-standardized debt-related assets invested in asset management products fell by 7.6% year-on-year, down 1.2 percentage points from the beginning of the year. The overall risk of asset management products is further converging.

  In the past month, the Central Bank and the China Banking and Insurance Regulatory Commission have repeatedly emphasized the need to be vigilant against the risk of shadow banking resurgence, and notified outstanding problems in shadow banking and cross-financial businesses. In terms of improper risk isolation, ineffective management and control of non-standard investment businesses, etc., work requirements for standardized rectification were put forward.

  The person in charge of the relevant department of the central bank told China Business News that the current asset management business is gradually returning to its original source, and positive progress has been made in standardizing the transformation. The asset management industry has formed a consensus of “entrusted by others and managing wealth on behalf of others”. Financial institutions have strengthened the construction of active management capabilities based on their own industry characteristics, increased the issuance of long-term, net-worth products, expanded the layout of multiple product lines, and continued to optimize product forms , The industry has shifted from disorderly regulatory arbitrage to orderly cooperation and competition, and has entered a sound development track.

  In addition, the quality and efficiency of supporting the real economy has been steadily improved. On the one hand, while gradually reducing the stock of non-standard assets, by increasing investment in non-financial corporate bonds and stocks to support the development of direct financing, it has better made up for the financing gap of the pressure drop in non-standard assets. On the other hand, the investment amount of asset management products in financial bonds and certificates of deposit has increased significantly, supporting the use of on-balance sheet funds and indirectly supporting the financing of the real economy.

  Author: Duchuan