Point of View... Bank non-standard wealth management products compliance review points.
Published:
2020-12-18
Due to the impact of the "new capital management rules" and the central bank's strict definition of "non-standard assets", banks are becoming more and more cautious in issuing wealth management products. Recently, a number of banks I serve have asked lawyers to review the legal compliance of non-standard wealth management products to be issued by banks. To this end, I combed the "Bank non-standard financial products compliance review points" for discussion.
1. what is non-standard banking?
Standardized debt assets refer to fixed-income securities such as bonds and asset-backed securities issued in accordance with the law, mainly including treasury bonds, central bank bills, local government bonds, government-backed institutional bonds, financial bonds, non-financial corporate debt financing instruments, corporate bonds, corporate bonds, international institutional bonds, interbank certificates of deposit, credit asset-backed securities, asset-backed bills, and asset-backed securities listed and traded on stock exchanges, and fixed income publicly raised securities investment funds.
The full name of non-standardized assets is non-standardized debt assets, which are debt assets that are not traded in the interbank and stock exchange markets.
Non-standard debt assets: including but not limited to credit assets, trust loans, entrusted claims, promissory notes, letters of credit, accounts receivable, various types of receiving (receiving) rights, equity financing with repurchase provisions, etc.
Therefore, both "standard" and "non-standard" are for the classification of debt assets. Bank non-standard wealth management is a wealth management product that invests in non-standard debt assets.
The main legal basis for 2. review of the legal compliance of non-standard financial management of banks
1. the People's Republic of China Commercial Banking Law
2. the People's Republic of China Banking Supervision and Administration Law
3. Guiding Opinions on Regulating the Asset Management Business of Financial Institutions (New Regulation on Capital Management)
4, commercial banks financial management business supervision and management measures.
5. Standardized rules for the identification of debt assets
3. review points
(I) Qualified Investor Issues
The bank's non-standard wealth management products are issued privately by private placement and need to be issued to qualified investors. Qualified investors must have the corresponding risk identification capabilities and risk tolerance capabilities, and invest in natural persons, legal persons or other legally established organizations that are not less than a certain amount of money in a single wealth management product and meet the following conditions:
1. Having more than 2 years of investment experience, and satisfying that the family's financial net assets are not less than 3 million yuan, or the family's financial assets are not less than 5 million yuan, or the average annual income of the past 3 years is not less than 400000 yuan;
2. Legal persons or other legally established organizations with net assets of not less than 10 million yuan at the end of the latest year;
3. Other circumstances as prescribed by the banking regulatory authority of the State Council.
Issuing subject of (II) financial products
Commercial banks shall conduct financial management business through subsidiaries with independent legal personality. If the conditions are not available for the time being, the head office of a commercial bank shall set up a specialized department for financial management business to implement centralized and unified management of financial management business.
(III) classification management and other requirements
1. The property of commercial bank wealth management products is independent of the manager and custodian's own assets;
2. The claims arising from the management, use and disposition of wealth management product property by the manager of a commercial bank shall not be offset against the debts incurred by the manager or custodian institution due to its own assets; the claims and debts arising from the management, use and disposition of different wealth management product property by the manager shall not be offset against each other.
3, honest and trustworthy, diligent and dutiful to perform the entrusted, on behalf of the financial management duties, investors bear the investment risk and obtain income.
4. Commercial banks shall abide by the principles of calculable cost, controllable risk and full disclosure of information in carrying out wealth management business, strictly abide by the requirements of investor suitability management, and protect the legitimate rights and interests of investors.
5, in the national banking financial information registration system for centralized registration of financial products.
6. Commercial banks shall carry out financial management business through subsidiaries with independent legal personality.
7, commercial banks to carry out financial management business should be separated from other business.
(IV) should be consistent with the determination of non-standardized debt assets
The new asset management regulations require that standardized debt assets should meet five conditions at the same time: first, equal differentiation and tradable; second, sufficient information disclosure; third, centralized registration and independent custody; fourth, fair pricing and liquidity The mechanism is perfect; fifth, it is traded in the inter-bank market, stock exchange market and other trading markets established with the approval of the State Council. For these five conditions, the Standardized Rules for the Determination of Debt Assets are refined.
Debt assets that do not meet the conditions listed in the recognition rules are non-standardized debt assets, except for deposits (including large certificates of deposit) and assets formed by reverse repurchase of bonds and interbank lending.
The financial direct financing tools of the Banking Financial Management Registration and Trusteeship Center Co., Ltd., the credit asset transfer and income right transfer related products of the Banking Credit Asset Registration and Circulation Center Co., Ltd., the debt financing plan of Beijing Financial Assets Exchange Co., Ltd., the income certificate of China Securities Inter-Agency Quotation System Co., Ltd., the debt investment plan and asset support plan of Shanghai Insurance Exchange Co., Ltd, and other types of financial products that provide debt financing for a single enterprise that do not also meet the conditions set out in Article 2 of these Rules are non-standardized debt assets.
Assets that are not included in the statistical scope of non-standardized debt assets of the financial supervision and administration department prior to the issuance of these rules may be exempted from the regulatory requirements of the Guidance on term matching, limit management, concentration management, information disclosure and other regulatory requirements of non-standardized debt asset investments during the transition period of the Guidance. Those that are still in existence after the end of the transition period shall be properly handled in accordance with the relevant provisions.
(V) investment restrictions
Section 3 of the measures for the Supervision and Administration of Financial Management Business of Commercial Banks makes specific provisions on the management of investment operation, stipulates the objects that shall not be invested directly or indirectly by listing, stipulates the requirements that commercial banks' financial products should meet when investing in asset management products, and stipulates the requirements that commercial banks' financial products should meet when investing in non-standardized debt assets. When reviewing the legal compliance of non-standard wealth management products of banks, they can be reviewed one by one in comparison with the provisions of the Measures for the Supervision and Administration of Wealth Management Business of Commercial Banks.
(VI) shall not be paid rigidly
The measures for the supervision and management of the financial management business of commercial banks stipulate that financial products are non-principal-protected financial products in which commercial banks pay income to investors in accordance with the agreed conditions and actual investment income, and do not guarantee the payment of principal and the level of income.
The new capital management rules also stipulate that financial institutions shall not undertake to protect capital and income when conducting asset management business. In the event of payment difficulties, financial institutions shall not make any form of advance payment. Financial institutions shall not conduct asset management business on the table.
Protection of the interests of (VII) investors
Although the product itself does not violate laws and regulations and relevant management regulations, it is also necessary to review whether the product issuance has set up investor interest protection measures, whether the transaction structure has uncertain risks, and whether the transaction structure can be handled in accordance with the agreement in the actual operation of the transaction structure. In the case of overdue or breach of contract by the borrower, whether the obligee has sufficient and effective remedies.
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