PBOC: Highly indebted firms wont allowed to invest in asset management products

On Friday, China's central bank (PBOC) published the following draft guidelines for the new regulations.

Financial institutions will be punished for providing implicit guarantees for asset management products.

Financial institutions need to provision 10% of asset management products fee income as risk reserves.

Financial institutions not allowed to use asset management products to invest in commercial banks' credit assets.

Forbids fin institutions from conducting asset pools to manage asset man products.

Will control leverage levels for asset man products to curb asset price bubbles.