China's National Financial Regulatory Administration finalizes asset management trust rules with a cap of 200 qualified investors

China's National Financial Regulatory Administration has issued final rules governing trust companies' asset management business, following a consultation launched in 2025. Asset management trusts are defined as privately offered products restricted to no more than 200 qualified investors capable of identifying and bearing investment risks. Trust companies must fully explain those risks and cannot promise principal protection or guaranteed returns. Sales controls cover investor risk assessments, trust documentation and transfers of product interests, alongside oversight of sales personnel, channels and distributors. The rules require risk management systems suited to each business's characteristics and exposures, including controls over concentration, related party transactions and liquidity. They also require asset risk classification, maturity matching and leverage management. Investments must involve genuine, lawful and valid underlying assets and follow portfolio diversification principles. Improper conduit business and fund pooling are prohibited, while investments in other asset management products require oversight of underlying exposures. Each trust product must be managed and accounted for separately, with net asset values reflecting the actual returns and risks of underlying assets. Products whose underlying assets include nonstandard assets and whose direct investors include individuals must undergo external audits of net asset value calculations at least annually. The measures also strengthen information disclosure requirements.