China Securities Watchdog Orders More Shadow-Banking Disclosure

China’s securities regulator told publicly traded banks to publish more information about savings vehicles known as wealth management products as the government tightens supervision of lending outside the banking system.

The China Securities Regulatory Commission revised rules dating from 2008 to strengthen supervision, including additional disclosure requirements for trusts and wealth management products, the regulator said on its official microblog today, without giving details.

Authorities have sought greater control over less-regulated types of financing known collectively as shadow banking on concern they may destabilize the economy as slowing growth spurs defaults. Such lending may have reached 36 trillion yuan ($5.95 trillion), or 69 percent of China’s 2012 gross domestic product, according to an estimate from JPMorgan Chase & Co.

The regulator also said today it would step up supervision of brokerages’ involvement in shadow banking, adding that related risks in the securities industry are manageable.

China’s State Council imposed new controls on the shadow banking industry, three people familiar with the matter said earlier this week, while the banking regulator warned Jan. 6 about the risks from wealth management products that violate regulations.

To contact Bloomberg News staff for this story: Aipeng Soo in Beijing at asoo4@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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