It aims to boost market confidence amidst a cooling economy.
Reuters reports that the China Banking and Insurance Regulatory Commission (CBRIC) has finally given approval for the wealth management arms of domestic commercial banks to directly invest in Chinese shares.
The regulator first unveiled the plan in October as part of an effort to boost market confidence in light of China's slowing economy.
The outstanding amount of wealth management products sold by banks have hit US$4.26t (RMB29.54t) as of end-2017, according to official data.
The current business model of Chinese banks’ wealth management business is unsustainable in the long run as authorities double down to overhaul the outdated model, accounting firm PwC said in an earlier report
“The implementation of the new asset management regulation in 2018 has posed stricter requirements on the future development and transformation of the wealth management business of banks,” EY Greater China banking & capital markets leader Kelvin Leung said in a previous statement.
Here's more from Reuters:
Do you know more about this story? Contact us anonymously through this link.