Chinese banks to be haunted by these 5 regulatory tightening rules in 1H13

Regulations on wealth management products came sooner than expected.

Barclays believes regulatory tightening rules on WMPs have come sooner than the market expects, and detailed guidelines on banks' wealth management business may be released in 1H13.

Here's more from Barclays:

We expect further regulatory moves to be rolled out in 1H13, possibly including:

1) stopping usage of asset pools in managing WMP funds; 2) reducing/stopping asset allocation into risky investments; 3) requiring more detailed disclosure of the asset allocation of the WMPs;

4) standardizing banks' internal procedures in sales of WMPs; and 5) reducing distribution of high risk/high return trust products (note that distribution of PE products through bank branch channels has already been curbed by CBRC), and specifying what products can be distributed through bank channels.