On April 18, according to media reports, according to informed sources, China has postponed the announcement of a new regulation aimed at supervising the $16 trillion asset management industry.
According to a report from the China Securities Journal, a few days ago, the Guiding Opinions on Regulating the Asset Management Business of Financial Institutions was passed. According to industry insiders, on the one hand, asset management of securities firms actively adapts to regulatory requirements and timely adjusts existing businesses while vigorously exploring businesses that encourage the development of new regulations and companies that have comparative advantages. On the other hand, private equity funds are also actively expanding their channels for individual investors and expect that the new rules will increase individual investors' preference for equity products and thus seize opportunities for development. As a whole, the new asset management regulations will have multiple effects on asset management organizations and will reshape the industry's ecology.
On the afternoon of March 28, the first meeting of the Central Deepening Reform Commission was held. The meeting reviewed and adopted a series of documents including the “Guiding Opinions on Regulating the Asset Management Business of Financial Institutions” (hereinafter referred to as the “New Rules for Asset Management”). According to the unified supervision and management standards of asset management products, fair market access and supervision will be implemented. It is necessary to eliminate regulatory arbitrage space to the greatest extent and promote the standardized development of asset management business. It is necessary to strengthen the supervision of non-financial companies investing in financial institutions and adhere to the problem-oriented approach to complementing supervision over supervision. What will happen to various financial institutions after the introduction of new asset regulations?
Huang Mingyao, vice president of Base Rock Capital, said in an interview with the media that the “New Regulations on Asset Management” has just broken the currency, and has had a greater impact on the solid-income products of banks, brokers, trusts and other institutions. The impact on equity products is relatively small, including private equity funds and public funds. Public offerings of these equity products will have more opportunities. In the past, investors saw that there was a freshly-matched product, and they tended to invest in just-matched products. Now that asset management products cannot be immediately exchanged, investors will instead prefer equity products.
Limiting the Public Offering Funds to Re-issue Graded Products May Be Possible
Public offerings and graded products have grown wildly in the bull market and have become one of the favored products of investors. However, due to the imperfections of its own mechanism and the effect of fueling the decline, it caused a huge loss during the stock market disaster and caused investors to abandon it.
As of November 10, 2017,Grading FundThe scale of the parent fund is only 8.508 billion yuan, and the scale of the graded fund sub-fund is 67.317 billion yuan. For this reason, there are two major trends in the public offering of graded fund products. One is liquidation, and the other is the transition to other types of fund products.
Earlier, the publicly-graded fund “de-leverage” has gradually landed. In addition to raising the threshold for investment in graded funds to 300,000, stock bond rating funds have restricted subscriptions at regular opening hours, and have gradually reduced their liquidity by guiding the size of their products. The stock classification fund has always been open to operation, and it has not been affected until now, despite the increase in the threshold.
Graded products may face the possibility of restructuring or forced liquidation. Public funds may not be divided into shares. This rule limits the possibility of re-issuing classified products by public funds. In addition, the current stock products are mainly classified funds, and there are ambiguities in the interpretation of the disposal of stock products that violate the regulations after the end of the transition period. One explanation is that after the end of the transitional period, there is a high probability that it will face a transition or forced liquidation; another understanding is that graded products are mostly sustainable, and that such products do not need to be renewed, and the guidance does not give a clear disposition. In this regard, it may still be necessary to wait for the introduction of rules. However, under strict supervision, graded products may face greater transformation or forced liquidation after the transition period. With this in mind, the current discount rating A or will usher in opportunities.
The influence of the performance of the listed banks on the market is expected to have limited impact on the market
Looking at the current situation, the annual revenue from bank banking in 2016 is probably less than 150 billion yuan, which is relatively low compared to the total revenue of nearly 4 trillion yuan in listed banks that year. Most listed banks have less than 5% of their wealth management business income in total revenue. Therefore, the scale may decline next year, affecting wealth management business income, but the impact on revenue is expected to be no more than 1 percentage point, with a small impact.
ICBC President Gu Yi said: “The asset management business last year was a year of strong supervision. With the introduction of new regulations on asset management, this trend will continue. ICBC has taken a positive view of these effects.”
“After the introduction of the new regulations on asset management, ICBC will not be subject to major shocks.” Gu Yan introduced that ICBC is confident that the asset management business will achieve more standardized and better development. Specifically, the first source of funds, to create a net product system; the second investment side, continue to do non-standard transfer research, to find more standardized investment products; the third risk control, and constantly simplify the product system, reduce Nesting makes the product more permeable. In addition, in respect of the internationalization of its asset management business, ICBC established a subsidiary company in Hong Kong, China, last year - ICBC (Global), which is responsible for the internationalization of assets management.
CITIC BankPresident Sun Deshun also stated that banks will have to respond to their own assets and that asset management operations must return to their original sources. "From the structure point of view, our current low value of net-type products is the next step for development. This is also the future growth point."
“From the point of view of the whole bank, the proportion of asset management business is only a part of the so-called 'Oriental is not bright in the West.' Even if the new regulations on asset management form short-term pressure on the asset management business, it can be digested from the perspective of the whole bank. Absorption. After the bank's financial transformation in the future, it may also form a new growth point." Peng Xiangdong, deputy general manager of the Asset Management Department of the Agricultural Bank said.
The transformation of the asset management business of brokerage companies is still on the way but has little impact on overall performance
In the short term, the current bullish factors in the bond market are mainly relative to the relative ease of funding, no substantial changes in the stable and neutral monetary policy, and the hedging needs brought about by the uncertainty of Sino-US trade disputes. The "New Asset Management Regulation" will have a far-reaching impact on the bond market. Judging from the information disclosed recently, the transition period of the “New Asset Management Regulations” may be calculated from the date of publication of the official documents. Assuming that the transition period of one and a half years remains unchanged, the transition period will likely be extended to 2019. Year end.
Due to brokerageMargin financingWhereas the asset end has a non-fixed term, brokerage firms generally adopt a combination of non-standard financing such as standardized financing of bond issuance and transfer of income rights, such as flexible time.
If the new regulations require asset management products to be invested in non-standard debt assets, the date of termination of the non-standard debt assets may not be later than the due date or the last opening date of the asset management products. It is expected that the requirement will provide non-standard financing to securities companies. It will definitely affect the future financing methods of securities firms will rely more on long-term bond financing, so the demand for issuing bonds will be higher.
At present, more than 70% of the asset management scale of securities firms is channel and capital pool business. However, due to the low rate of these services, the overall performance of brokerage firms is less affected. In 2017, the total size of the Q3 brokerage assets was 17.37 trillion yuan, of which directional asset management was 14.73 trillion yuan, accounting for 84.77% of the total scale. Under the extreme assumption, the directional assets are all channel services, and the fee rate is about five-tenths of a million. Since this year, the contribution income has been 5.5 billion yuan, accounting for 1.74% of brokerage revenue, so it has little impact on overall performance.
As more than 70% of brokerage asset management scale is channel and capital pool business, if the channel and fund pool business is limited, the total asset size of 17 billion yuan by the asset management industry of the securities industry is difficult to keep, and the total assets of the entire brokerage industry The impact of asset management will be significant.
Trust business: channel business has limited impact on operating income
The balance of the 2017H single-fund trust product is approximately RMB 11 trillion, and if measured by the industry's average one-hundredth of the charging standard, the operating income for the first half of the year will be approximately RMB 11 billion, accounting for approximately 10% of the industry’s operating income. The draft for consultation clarifies old and new. Due to the principle of demarcation, the orderly exit of channel businesses has limited impact on industry revenues and profits. However, the proportion of channel services in the overall asset size is still very large, accounting for nearly half. Once this kind of business is greatly limited, the total assets of the trust industry will be relatively large.
Breaking Gang Dui will help gain the benefits of taking risks. Breaking Gang Dui will make the yield curve steeper, and an excessively flat yield curve will not enable trust companies that take risks to receive sufficient returns on the revenue side, which in the long run will benefit high-quality trust companies.
As compensation reserves and risk reserves are similar in nature, it is expected that this draft of the ED does not have a large marginal impact on the trust industry in terms of provision.
According to the new rules, bank financing funds of public offerings cannot be invested in traditional trust assets of private equity, which will make the trust an important channel for banks to be blocked. This means that trust institutions will face an important source of losing bank financing funds.
At the same time, there is also an impact on breaking the just-funded source of client funds for trust institutions. Traditionally, trust protected products from the retail side will lose space for development while another part of the high net worth client funds will not be affected.
Insurance Asset Management Affected by the Draft Opinions on Asset Management
The insurance asset management mainly invests in fixed income. The asset allocation of insurance funds is divided into strategic allocation and tactical allocation. The strategic allocation determines the characteristics of the upper and lower limits of asset allocation in major categories and generally changes once in three years. Since insurance companies pursue a stable interest rate spread, most of their assets are allocated to fixed income, accounting for 60%-80%%, while equity accounts for 10%-20% of the range. The rest are allocated to cash and real estate. And other fields. The tactical configuration is more flexible in that the style of the market is configured within the allowable range of major assets.
Warburg SecuritiesAnalystLi Zhen analyzed that 2016 is a new starting point for the development of insurance asset management products. In 2017, insurance asset management companies have expanded their product lines. “A lot of products have achieved good results.” In 2018, insurance assets management will face more intense competition. Competitive environment. "As a result, insurance asset management companies should pay more attention to the cultivation of core competitiveness." (Source: Enterprise Watch)
(Original title: News that China will postpone the release of new regulations for the asset management industry)