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On 08 December 2004,
the China Securities Regulatory Committee (CSRC) together with the
China Banking Regulatory Committee (CBRC) announced the "Management
to the fiduciary qualification of security investment fund".
The new measure has alleviated the limitation of entrance requirements
for the fund fiduciary bank.
1. The entrance requirement
of actual paid-in capital amount has been lowered
The original regulation stipulated that the actual paid-in capital
amount of fund fiduciary bank should not be less than RMB8 billions,
which limited the entrance requirement significantly. The new measure
emphasizes on the principle of " net capital and capital adequacy
ratio meet related regulation" other than the concept of actual
paid-in capital.
2. The size of the
capital amount has been lowered
The new measure stipulated that commercial bank applies the fiduciary
qualification of fund should hold net assets not less than RMB2
billions in the latest 3 financial years. Also, the company's capital
adequacy ratio should meet the related requirement of monitoring
bureau.
According to this notice, the prospect of the fiduciary fund business
is prosperous because it has been regarded as an important business
activity to the commercial bank. However, the present service standard
in China is far below the international standard that making China
becomes less competitive to the world. Before China opening up the
free market of banking service to outsiders in the world, it is
necessary to introduce the new fiduciary fund service provider.
This can help to improve the competitiveness of banking service
in China.
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