The Central Economic Working Conference, held in December 2017, recognized that the prevention and control of financial risks are vital in the battle to prevent and resolve major risks, and requested financial services to be the main focus of supply-side structural reforms in order to form a virtuous cycle between the financial industry and the real economy, the financial industry and the real estate sector, as well as within the financial system. Subsequently, the China Banking Regulatory Commission ("CBRC") on 22 December 2017 issued the Circular on Regulating Bank-Trust Business (the "Circular") which is intended to streamline business co-operation between commercial banks and trust companies (the "Bank-Trust Business"), and particularly the so-called “channel business” between them (the "Bank-Trust Channel Business").
How does the Bank-Trust Channel Business relate to the basic trust concepts under the PRC Trust Law? This newsletter begins with the newly-promulgated regulatory requirements under the Circular and briefly analyzes the regulatory trends of the Bank-Trust Business, particularly the Bank-Trust Channel Business, in the context of the current phase of the trust industry.