Measures for the Administration of Net Capital of Trust Companies: Interpretation of the Measures for the Administration of Net Capital of Trust Companies

On March 1 2007, the Measures for the Administration of Trust Companies was formally implemented, which clearly stipulated that trust companies should implement net capital management. In order to implement this regulation, establish a risk control index system with net capital as the core, and strengthen the risk supervision of trust companies, the CBRC combined with the supervision practice of trust companies and learned from the practices of mature overseas markets, and after many times of soliciting opinions and revising and perfecting, formulated the Measures.

Since the mid-1990s, the overseas mature market supervision authorities, represented by the United States, have deeply realized the importance of risk supervision with net capital as the core to the risk control of investment banks and financial institutions. With the development of China's trust industry, the adjustment of trust company's business model and the development of innovative business, trust supervision urgently needs to establish an effective risk supervision system that can fully reflect the potential risks of trust companies. The formulation of the "Measures" meets this urgent need and is of great significance. First, net capital management will make up for the lack of trust supervision tools.

Since the promulgation of the Measures for the Administration of Trust Companies, the scale of assets managed by the trust industry has expanded rapidly, from 360.6 billion yuan at the beginning of 2007 to 2 trillion yuan at the end of 2009, achieving a six-fold increase in three years. In 20 10, the average assets managed by trust companies (excluding companies that are being reorganized and just started business) are about 40 billion yuan, and the trust assets managed by a single trust company are more than 50 times the net assets. At the same time, the internal control and risk management capabilities of some trust companies have not kept up in time, and the risks of individual trust projects have occurred from time to time. In order to effectively control the blind expansion of trust companies and prevent risks, more effective supervision tools are needed to make up for the lack of supervision means, that is, to carry out necessary constraints by implementing net capital supervision.

Two. The promulgation of the Measures will promote trust companies to establish and improve the internal risk early warning and control mechanism.

Through the dynamic monitoring of risk control indicators such as net capital, periodic sensitivity analysis and stress test, risks can be effectively controlled. Effective implementation of regulatory intent through net capital supervision can guide trust companies to make differentiated choices and development according to their own characteristics.