Blockbuster!Trust business classification solicitation draft issued, asset management trust into the four categories

2022-06-11 0 By

The reform of trust business classification, which has attracted much attention, has made substantial progress.It was exclusively learned that some trust companies have received the “Notice on The Adjustment of Trust Business Classification (Draft for Comments)” (hereinafter referred to as “Draft for Comments on Trust Business Classification”) issued by the regulatory authorities, which clearly shows the upcoming reform framework of trust business.According to the draft of category of trust business, trust business will be divided into asset management of trust assets, services, and public welfare charitable trust / 3 kinds, among them, the trust asset management under a fixed income classes of trust among those asset management, production management, product and financial derivatives and mixed type of asset management category of asset management to accept the trust and so on four categories;There are four categories of asset service trust, namely, administrative management trust, asset securitization trust, risk disposal trust and wealth management trust, and there are still sub-categories under these four categories.It is worth mentioning that the reform framework displayed in the Draft for Consultation on Trust Business Classification does not include financing trusts.In accordance with the requirements, the trust company shall conduct a comprehensive review of all existing businesses and formulate a rectification plan for existing businesses.Private fund management and other businesses based on trust relationship shall be liquidated in an orderly manner in accordance with the method of strictly prohibiting new addition and natural expiration of stock.For other trust businesses that do not meet the classification requirements, an order shall be placed under the asset management trust item for trust business to be rectified, and relevant businesses shall be classified into this category, and rectification shall be carried out in an orderly manner according to the business characteristics.Industry observers believe that the classification reform of trust business carried out by the regulatory authorities will help trust companies get rid of the traditional path of dependence, clarify the transformation direction of trust business, standardize asset management business in the way of trust business, and explore various new businesses of asset service trust and public welfare/charitable trust.According to the Definition of The Draft for Comments on Classification of Trust Business, asset management trust is a self-benefit trust business that trust companies provide investment management financial services to investors of trust products in accordance with trust legal relations.Such businesses should adhere to the positioning of private equity and belong to private equity asset management services, which are different from private equity investment banking services that create financing instruments and raise funds for financiers.When engaging in this kind of trust business, the trust company raises funds through private offering of pooled fund trust plan and carries out investment management to implement net value management.The trust plan investor shall meet the standard of qualified investor and be both the principal and the beneficiary in the trust relationship.According to the Draft for Soliciting Opinions on Trust Business Classification, there are four categories under asset management trust.First, the fixed income asset management trust means that the proportion of the trust plan’s investment in creditor’s rights such as deposits and bonds is not less than 80%.Second, equity asset management trust means that the proportion of the trust plan’s investment in equity assets such as stocks and the equity of unlisted enterprises is not less than 80%.Third, commodity and financial derivatives asset management trust means that the proportion of the trust plan’s investment in commodities and financial derivatives is not less than 80%.Fourth, hybrid asset management trust means that the trust plan invests in debt assets, equity assets, commodities and financial derivatives assets and the investment proportion of any asset does not reach the standards of the first three products.Assets trust service “four big classification exploits classification” in accordance with the classification of the trust business “draft” definition, asset service trust refers to trust legal relationship based on trust, entrusted by the principal, and according to client requirements tailored for its custody, risk isolation, risk management, wealth planning and trust between generations and other professional services.This kind of trust business does not involve fundraising activities, shall not carry out debt business under the trust, shall not issue trust loans with entrusted funds, nor shall it provide channel services for all kinds of illegal activities.Such trust business can be a self benefit trust or an other benefit trust.According to the Draft for Soliciting Opinions on The Classification of Trust Business, there are four categories under the asset service trust, and each of these four categories has a detailed item.First, administrative management trustee service trust.As an independent third party, trust companies provide accounting valuation, capital settlement, risk management, information disclosure and other administrative management services.According to the types of trust property and services, it can be divided into five categories: stakeholder social fund entrusted service trust;Asset management products entrusted service trust;Bond collateral fiduciary service trust;Enterprise/Occupational annuity trustee service trust;Other administratively managed assets service trust.Second, asset securitization trustee service trust.Trust companies provide entrusted services as specific purpose carriers of the underlying assets of asset securitization. According to the types of underlying assets and service objects, trust companies can be divided into four categories: credit asset securitization entrusted service trust;Enterprise asset securitization trustee service trust;Non-financial enterprise asset-backed notes trustee service trust;Other assets securitization trustee services trust.Third, risk disposal trustee service trust.Trust companies, as trustees, accept the entrustment of enterprises facing debt crisis, restructuring or bankruptcy process to improve the efficiency of risk management.According to the risk disposal methods, it can be divided into two categories: enterprise market-oriented restructuring trustee service trust and enterprise bankruptcy trustee service trust.Fourth, wealth management trustee service trust.The trust services provided by trust companies for the wealth management of residents, enterprises and other organizations can be divided into five categories according to the different service contents and objects, including family trust, insurance trust, testamentary trust, special needs trust and other wealth management trust.The draft for soliciting opinions on trust Business classification emphasizes that the amount or value of family trust property should not be less than 10 million yuan.The beneficiaries shall be family members including the trustor, but the trustor shall not be the sole beneficiary.The main purpose of trust is simply to maintain and increase the value of trust property, and the trust business with the property of special account financial management and asset management is not a family trust.At the same time, it is clear in the Draft that the amount or value of other wealth management trust properties shall not be less than 5 million yuan.Sorting out the existing businesses and implementing the reform of trust business classification by the regulatory authorities has been brewing for a long time.In recent years, trust business of trust companies has been developing continuously and its business forms have been innovating. However, the current classification system of trust business has been in operation for many years, which does not meet the needs of the current trust industry to return to its roots and transform and develop. There are also defects such as multiple classification dimensions, unclear business boundaries and fuzzy service connotation.Industry observers believe that the classification reform of trust business carried out by the regulatory authorities will help trust companies get rid of the traditional path of dependence, clarify the transformation direction of trust business, standardize asset management business in the way of trust business, and explore various new businesses of asset service trust and public welfare/charitable trust.We learned that at the trust supervision work conference held in February this year, the relevant person in charge of CBRC once stated that the reform of business classification would be promoted as the key work of the trust industry in 2022.The newly issued “trust business classification draft” stressed that the trust company shall, in accordance with requirements of the new classification of the trust business setting boundary trust business, it is forbidden to new channels and non-standard pool business, insist on pressure drop shadow banking risk outstanding financing kind of trust business, shall not conduct private funds form the trust asset management business.Until the reform of business classification is officially launched, trust companies must formulate the rectification plan of stock business on the basis of sorting out stock business.According to the Draft for Soliciting Opinions on The Classification of Trust Business, private fund management and other businesses based on trust relationship shall be liquidated in an orderly manner in the manner of strictly prohibiting new addition and natural expiration of stock.For other trust businesses that do not meet the classification requirements, an order shall be placed under the asset management trust item for trust business to be rectified, and relevant businesses shall be classified into this category, and rectification shall be carried out in an orderly manner according to the business characteristics.Is close to the regulation, people familiar with the matter told the trust the guy send reporters, “in order to cooperate with new business classification, regulators will improve the trust of the company’s capital management, liquidity management, regulation rating, protection of the trust fund to pay, supervision mechanism, such as trust products registration will also be changes to the off-site supervision report, in order to ensure the smooth reform.”Source: Securities China review: Sun Shijian