Name: Detailed Implementing Rules for Specific Client Asset Management Business of Securities Companies (Interim) (Draft for Consultation) (证券公司定向资产管理业务实施细则（暂行）（征求意见稿）), (“Draft Rules”)
Issuing authority: China Securities Regulatory Commission (“CSRC”)
Consultation period: Ending on 15 February 2008
Subject: Asset management business
The CSRC issued the Trial Procedures for the Client Asset Management Business of Securities Companies (“Trial Procedures”) on 18 December 2003. Pursuant to the Trial Procedures, the client asset management business of securities companies is divided into the specific client asset management business (ie, asset management business for single clients), the collective asset management business and the asset management business for special projects. Among these new divisions of asset management businesses, the collective asset management business has been the focus of the CSRC so far.
The Draft Rules, once issued and effective, will be the first set of rules specifically governing the asset management business for single clients. The Draft Rules and the recently issued rules enabling fund management companies to manage assets for specific clients will create more overlap between the asset management business of a securities company and that of a fund management company.
Highlights
- Permitted clients under the asset management business for single clients include natural persons, legal persons and other organisations.
- Assets that clients may entrust to securities companies to manage include cash, bonds, asset-backed securities, securities investment funds, stocks, financial derivatives and other financial assets as permitted by the CSRC. Under the Trial Procedures, the minimum net asset value for each client is RMB1 million. The Draft Rules allow securities companies to set a higher threshold.
- The scope of permissible investments for the asset management business for single clients includes bank deposits, central bank notes, short-term notes, bonds and bonds repo, asset-backed securities, securities investment funds, collective asset management schemes, stocks, financial derivatives and other investment products permitted by the CSRC.
- Client assets are required to be segregated from the assets of the securities company as well as from the assets of the securities company’s other clients and to be held in the custody of a qualified financial institution.
- Securities companies are required to set up internal control and risk management procedures for the asset management business for single clients.
Please contact Zili Shao ( zili.shao@linklaters.com tel: +86 21 2891 1868) or Fang Jian ( jian.fang@linklaters.com tel: +852 2901 5320) if you would like further details.
