CBIRC Puts Kibosh on Sale of Bank Wealth Management Products via Online Channels

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The wealth management vehicles of Chinese banks will be excluded from selling their products via online platforms following the launch of a crackdown on Internet finance by Beijing.

On 25 December 2020 the China Banking and Insurance Regulatory Commission (CBIRC) issued the draft version of the “Commercial Bank Wealth Management Company Wealth Management Product Sales Provisional Administrative Measures” (商业银行理财子公司理财产品销售管理暂行办法(征求意见稿)) for the solicitation of opinions from the public.

The Measures do not include online platforms as approved sales venues for the wealth management products (WMP’s) of bank wealth management subsidiaries, and are expected to drive a major shift in their expansion strategies.

21st Century Business Herald reports that wealth management vehicles already began to withdraw their products from online sales channels before the end of last year in response to the release of the draft WMP measures, following earlier efforts to expand into online selling in 2020.

The release of the draft Measures arrives following a major ramping up of pressure on China’s online finance sector due to risk concerns.

This included the scuppering of Ant Group’s mammoth IPO in early November in tandem with the issuance of strict new online lending regulations, followed by the launch of an anti-trust probe into Alibaba at the end of December, and demands from regulators that Ant Group conduct a major “overhaul” of its operations to focus primarily upon its original business of payments.

In late December leading Chinese tech giants including Alipay, JD.com, Du Xiaoman and Tencent also began to withdraw their online deposit products in response to regulatory pressure.

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