China orders banks to register WMPs

Tightens oversight of controversial financial product.

The China Banking Regulatory Commission, the banking regulator, has ordered Chinese commercial banks to provide detailed information of each wealth management product on a newly set up electronic platform 10 working days before they begin selling the product to the public. The new rule is now in effect

Banks need to submit detailed information on each product, including product maturity and an indication which projects will use the funds. They need to wait until they receive a registration number issued through the electronic platform before formal sales can begin.

The move will help boost transparency of WMPs, which are a popular alternative to traditional but low yielding bank deposits, offering higher returns but also bringing increased risk.

Banks that fail or delay the submission of data or misstate information could be barred from selling wealth management products, the notice said.

By the end of July, banks must also submit the same information on all wealth management products issued after Jan. 1, 2011, CBRC said.