Financial asset investment companies welcome China Banking and Insurance Regulatory Commission to support the new regulations for docking asset management in the trillion-dollar debt-to-equity swap ma

　　With the introduction of new regulations on asset management business of financial asset investment companies, the trillion-dollar debt-to-equity swap market will also usher in many changes. On May 6th, China Banking and Insurance Regulatory Commission issued the Notice on Matters Related to the Asset Management Business of Financial Asset Investment Companies (hereinafter referred to as the Notice), which clarified the matters related to the asset management business of financial asset investment companies (AIC) from the aspects of fund raising, investment operation, registration and custody, information disclosure and submission, which also marked a breakthrough in the realization system of asset management business of financial asset investment companies.

　　Financial asset investment company is the implementation institution of bank debt-to-equity swap, which has emerged as a new financial format since June 2018. According to the Notice, the debt-to-equity swap investment plan of a financial asset investment company can apply for registration as a shareholder of the target company of debt-to-equity swap according to law. Insurance funds and pensions can be invested in the debt-to-equity swap investment plan according to law. When conducting asset management business, a financial asset investment company shall abide by the principles of calculable cost, controllable risk and full disclosure of information, and pay investors income according to the agreed conditions and actual investment income, without guaranteeing the principal payment and income level, and investors shall bear the investment risks and obtain income.

　　"In fact, this is a part of the unified asset management policy. All kinds of asset management institutions can issue asset management products to qualified investors." According to the analysis of the asset management industry, this new regulation should be mainly aimed at aligning with the new asset management regulations for institutions such as financial asset investment companies, unifying standards, and further enriching the sources of funds for debt-to-equity swaps.

　　Liao Yuanyuan, deputy director of China Banking and Insurance Regulatory Commission Innovation Business Supervision Department, pointed out that the overall idea and main contents of the Notice are consistent with the core principles of the new asset management regulations. At the same time, the Notice focuses on solving the realistic needs of market-oriented fund-raising of financial asset investment companies, and puts forward more targeted regulatory provisions in combination with their own characteristics of asset management business, combining unified supervision with differentiated supervision, which not only ensures that asset management business can better support the implementation of debt-to-equity swap projects, but also has a significant role in promoting the healthy and orderly development of asset management business of financial asset investment companies.

　　China Banking and Insurance Regulatory Commission data show that in the past two years, financial asset investment companies have actively and orderly carried out their business, and the amount of debt-to-equity swaps has exceeded 1 trillion yuan. Experts believe that the "Notice" is beneficial to both the capital end and the business end of financial asset investment companies, which is conducive to the better development of debt-to-equity swap business.

　　Ceng Gang, deputy director of the National Finance and Development Laboratory, said that broadening the business scope of financial asset investment companies can alleviate the problem of funding sources that debt-to-equity swaps have been facing. Debt-to-equity swap requires relatively diversified funds, appropriate cost and long term, and can introduce more social funds, which is of course meaningful to the sustainable development of debt-to-equity swap.