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China Clampdown Signals ‘New Era’ for $15 Trillion in Funds

  • China announced new asset-management product rules on Friday
  • Once adopted, the regulations will end implicit guarantees
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China’s latest plan to rein in its shadow banking system is winning early plaudits from analysts, despite concern that it could fuel short-term market turbulence.

The country’s financial watchdogs unveiled a proposal on Friday to overhaul regulation of asset-management products, which hold about $15 trillion and are seen as threats to stability in Asia’s largest economy. The draft rules, set to take effect in 2019 after a consultation period, mark the “beginning of a new era” in Chinese financial supervision, according to Citic Securities Co.