Home » The liquidity risk management measures for wealth management products are released!Improving the ability to redeem funds to prevent passive realization of assets and reduce product net value

The liquidity risk management measures for wealth management products are released!Improving the ability to redeem funds to prevent passive realization of assets and reduce product net value

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The China Banking and Insurance Regulatory Commission’s website reported on December 17 that in order to strengthen the liquidity management of wealth management products and protect the legitimate rights and interests of investors, the China Banking and Insurance Regulatory Commission formulated the “Measures for the Management of Liquidity Risks in Wealth Management Companies’ Wealth Management Products.”

The Measures further clarify and refine the liquidity risk management rules of wealth management products, require wealth management companies to establish effective corporate governance and management and control mechanisms, improve various management systems and implement them effectively, and emphasize the integration of liquidity risk management throughout the operation of wealth management business. whole process.

The person in charge of the relevant department of the China Banking and Insurance Regulatory Commission stated that regulating the liquidity management of wealth management products, improving the ability to redeem funds, preventing passive realization of assets and reducing the net value of products is not only conducive to protecting investors’ rights to redeem products, but also conducive to protecting investors’ legitimate rights and interests. Damage and be treated fairly.

  Further improve operability

From September 8 to October 9, 2021, the China Banking and Insurance Regulatory Commission publicly solicited opinions on the “Measures” and carefully studied the feedbacks one by one to further improve the “Measures.”

Li Lijie, vice president of CCB Wealth Management, said that the “Measures” have optimized and improved the relevant provisions, further improving operability, and helping wealth management companies to conduct liquidity risk management more efficiently.

Li Lijie introduced that the “Measures” provide corresponding exemptions for liquidity restricted assets and 7 working days realizable asset management requirements for wealth management products issued to a single investor, which is more suitable for the particularity of such products and handles investors flexibly. Demands and related adjustments are also consistent with the requirements of similar asset management products. The “Measures” provides a conditional exemption for the requirement that “products with high liquidity assets cannot be less than 5%” for fixed-open products. For products with a maturity of more than 90 days, only 7 working days before the opening date of the product and the opening period must meet the requirement of high liquidity assets not less than 5%. The “Measures” fully considers the requirements for the rationality of the investment structure of wealth management business, and protects the legitimate rights and interests of investors, making it more operative.

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  Require wealth management companies to establish effective corporate governance mechanisms

The “Measures” require wealth management companies to establish effective corporate governance and management and control mechanisms, improve various management systems and implement them effectively.

First, wealth management companies should establish and improve the liquidity risk management system and governance structure of wealth management products, and designate departments to set up special positions and be equipped with sufficient and competent personnel to be responsible for the liquidity risk management of wealth management products.

The second is that the person in charge of the department responsible for the management of the investment and operation of wealth management products assumes the main responsibility for the liquidity risk management of the wealth management products.

Third, a wealth management company should designate a department to be responsible for the stress test of the liquidity risk of wealth management products, and to maintain relative independence from the investment management department.

Fourth, wealth management companies should take effective measures to strengthen the management of third-party cooperation to ensure timely and adequate access to relevant information to meet the liquidity risk management needs of wealth management products.

  Put liquidity risk management throughout the entire process of wealth management business operation

The “Measures” emphasizes the integration of liquidity risk management throughout the entire process of wealth management business operations.

First, wealth management companies should comprehensively evaluate factors such as the liquidity of investment assets, investor types and risk preferences during the design phase of wealth management products, prudently determine open and closed product operation methods, and rationally design subscription and redemption arrangements.

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Second, wealth management companies should continue to do a good job in the investment management of low-liquidity assets, liquidity-restricted assets and high-liquidity assets, and improve the degree of matching between asset liquidity and product operation methods.

Third, wealth management companies should continue to monitor the liquidity risk of wealth management products, carefully evaluate the valuation and liquidity of various assets invested in the product, and fully consider the possible impact of reputational risk, credit risk, market risk, and counterparty risk, and make advance decisions. Response arrangements.

  Strengthen the management of subscription and redemption of wealth management products

The “Measures” require wealth management companies to strengthen the management of the subscription and redemption of wealth management products, and to rationally use the liquidity management measures of wealth management products in accordance with laws and regulations and the agreement of the wealth management product contract to better protect the legitimate rights and interests of investors. The rational use of management measures can also help maintain the relative stability of investment strategies and obtain long-term investment and value investment returns for investors.

The Measures also strengthened the requirements for prior agreement and information disclosure. Clarify that wealth management companies should agree in advance with investors the liquidity management measures that wealth management products may use in the future, and disclose to investors the main liquidity risks faced by wealth management products, management methods, and actual use of measures in accordance with regulations, so as to protect investors The right to know promotes the formation of reasonable expectations and rational decision-making.

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In terms of information disclosure,BankAccording to Zhang Jin, director of the Statistical Research Department of the Financial Management Registration Center, the financial registration center will continue to build a unified information disclosure channel for the financial management industry, improve the standardization of information disclosure, and effectively protect the legitimate rights and interests of investors.

  Set a five-month transition period

In order to facilitate the organization to prepare for various work such as business system, system construction, and product rectification, the “Measures” will be implemented five months after the date of promulgation.

Dong Ximiao, chief researcher of China Merchants Finance, believes that wealth management companies should revise and improve their systems as soon as possible, and strengthen system construction and product rectification.Wealth management companies and agency sales agencies should also strengthen investorseducate, Strive for the understanding and support of investors. Investors should carefully read the contracts of wealth management products, fully understand the main liquidity risks faced by wealth management products and the management measures that financial institutions may take, and properly manage their own investment arrangements and liquidity management.

Li Lijie stated that the “Measures” set aside sufficient time for the preparation of wealth management companies in the implementation arrangements. CCB Wealth Management will make various work arrangements in accordance with the requirements of the “Measures”, and is confident that under the unified guidance of the regulatory authorities, it will fully meet the requirements on time. Regulatory requirements. The company will further consolidate the foundation of risk management, implement the main responsibility of the organization, continue to improve the internal control and mechanism of liquidity risk, and actively explore the empowerment of financial technology to continuously improve the quality and efficiency of risk monitoring and the ability to resist risks.

(Source: ChinaSecuritiesNewspaper)

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