GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

China banks to improve product disclosure

Monday 10 October 2011 - by Karina Whalley

China's financial regulator has set out to tighten regulations on banks' wealth investment products by beefing up disclosure requirements.

China Daily, the state-controlled newspaper, reported on Sunday that the China Banking Regulatory Commission is introducing new curbs on one of the banking industry's most profitable business areas.

"[According to the CBRC] commercial banks have seen rapid development of their wealth investment businesses in recent years," reported the paper, "but some problems have also appeared along with the robust growth, including misleading and falsified sales of products to clients."

The CBRC claims that these problems have damaged the interests of clients and have hurt the banking industry's integrity, according to the newspaper. "Chinese commercial banks used to lure investors to buy their wealth investment products by touting how profitable they might be," it reported.

The CBRC has ordered commercial banks to improve the information disclosure system so that clients are made aware of the risks inherent in the wealth investment products industry.


Wealth investment product documents will have to include information on investment risk. Banks will also now need to make assessments of clients' ability to take on risk as well as giving them results of worst-case scenarios.

The CBRC wants client risk profile assessments to be based on age, financial statements and investment experience.


WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don't know

View results

FIND A REGION world regions