Summary: China's Trust and Investment Companies (TICs) developed as providers of credit and services not offered by the banking system They enjoyed more flexibility in lending terms, and had access to financing from a variety of sources. Their range of activities had been wide, encompassing deposit taking, merchant banking, investments in industrial companies, real estate, securities brokerage services and underwriting. Many were offshoots of banks, and many were closely affiliated to local government, where their key role was local development project financing. Some of the largest, the International TICs, were authorized to borrow from overseas, on behalf of local governments, or later, on their own account. Following the Commercial Bank law of 1994 and its principle of bank and non-bank separation, regulatory concerns grew about the TICs, and their links to the banking system. While the government has made significant moves towards removing the affiliation of such companies to banks, the question remains, how is their future role to be defined? The present paper traces the development of TICs and their links the banking system and interbank market. It describes the legal and regulatory framework in which these companies operate, and the regulatory framework for securities companies and mutual funds; fiduciary financial activities which TICs also undertake. It evaluates proposed new legislation in this area, and assesses present supervision practices.
Official, scanned versions of documents (may include signatures, etc.)