The CBRC local offices, policy banks, state-owned commercial banks, joint-stock commercial banks, postal savings bank, trust companies regulated by the CBRC：

For the purpose of preventing risks involved in the wealth management cooperation between banks and trust companies and ensure its safe and sound development, the CBRC issued this notice based on the previous Notice on Regulating Relevant Matters concerning the Wealth Management Cooperation between Banks and Trust Companies (Decree of the CBRC, No.72, 2010) (hereinafter referred to as “the Notice”).

Firstly, according to the Notice, the commercial banks must transfer the off-balance-sheet assets concerning bank-trust wealth management cooperation into their balance sheets by the end of 2011. Detailed transfer plans should be submitted to the CBRC headquarters or its provincial offices before January 31st  2011. In principle, the bank-trust cooperation loan balances should be reduced by at least 25% quarterly.

Secondly, trust companies should draw 10.5% of the remaining off-balance-sheet bank-trust loans as risk-based capital.

Thirdly, trust companies should not draw dividends if the trust compensation reserves fall below 150% of the non-performing bank-trust loans or 2.5% of the total balance of bank-trust loans.

Fourthly, the CBRC local offices must strictly follow the above-mentioned requirements when supervising banks to transfer off-balance-sheet bank-trust assets into their balance sheets and urging trust companies to reduce the scale of their bank-trust loans.

The Notice should be implemented as soon as it is received. 

January 13, 2011