China bank regulator orders finance firms to comply with investment ceiling rule |
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Published
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Thu, 08 Feb 2007 07:26
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BEIJING (XFN-ASIA) - The China Banking Regulatory Commission (CBRC) has issued an order requiring finance firms to comply with its regulations on financiers' short-term securities investments, the 21st Century Business Herald reported.In 2004, the CBRC amended its regulations, to stipulate that short-term securities investment positions must not exceed 40 pct of a finance firm's capital.However, it did not detail what constituted a short- term securities investment.The newspaper said in a new order issued to CBRC branches and finance firms, the regulator has said that short-term securities investments include stocks, bonds and central bank bills.The order requires finance firms to comply with the 40 pct ratio.The newspaper reported that most finance firms are exceeding the 40 pct limit, holding bonds and central bank bills.The report noted that the CBRC has not set a deadline for compliance and plans to consult with firms after Chinese New Year, since some firms are arguing that the bonds and central bank bills they hold are not high risk investments and should not fall under the 40 pct ceiling requirement.The newspaper noted that the regulator's key concern is investments in the stock market, given fears of a bubble developing with the recent sharp run up in prices.kai.guo@xfn.com
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China insurance regulator to push restructuring, investment in banks 