The "Interim Measures for Asset Service Trust Management (Draft for Comments)" has been issued

Recently, reporters learned that several trust companies have recently received the “Interim Measures for Asset Servicing Trust Management (Draft for Comments)” issued by regulators. The “Measures” contain six chapters and forty-seven articles. They not only clarify the definition of asset servicing trusts, business classification, operating principles, and other matters, but also state that trust companies shall strictly carry out asset servicing trust business in accordance with these Measures and shall not, in substance, conduct asset management trust business in the guise of asset servicing trusts.

Specifically, the “Measures” state that the management, use, and disposition of trust property shall be consistent with the trust purpose and the risk-and-return characteristics of an asset servicing trust. Trust companies shall fully consider the safety and liquidity of trust property, operate in a steady and prudent manner, and must not use it for speculation. Trust companies shall improve the professional level of managing the utilization of trust property, and shall have professional personnel, institutional mechanisms, and risk control capabilities that match the utilization of trust property. When trust companies use trust property to carry out investment activities, they shall not allow the settlor or any third party designated by the settlor to independently be responsible for due diligence or investment operations. They shall also not allow the settlor or any third party designated by the settlor to issue investment instructions or provide substantive investment advice such as specific underlying target assets.

In addition, the “Measures” also clearly require that the investment amount of a single asset by an asset servicing trust shall not exceed 25% of the actually received trust funds, except that bank demand deposits, government bonds, central bank bills, policy financial bonds, and local government bonds are excluded from this limitation. Securities investment made strictly according to the constituent proportions of relevant indices is also excluded. Non-standardized assets of a single entity and its related parties shall be treated as the same asset and consolidated to calculate the above-mentioned ratio. Where an asset servicing trust’s investment in underlying assets involves non-standardized assets in private asset management products, the trust company shall conduct look-through identification of the non-standardized assets and conduct look-through calculation of the above-mentioned ratio. (Shanghai Securities News)