To further strengthen the supervision of commercial bank custody businesses and promote standardized and healthy development, the National Financial Regulatory Administration has recently formulated the "Interim Measures for the Supervision and Administration of Commercial Bank Custody Business."
In recent years, commercial banks have provided custody services for wealth management products, capital trusts, securities investment funds, asset management products of securities companies, insurance asset management products, social security funds, and pensions. The scale of these services has steadily expanded, with increasing service types and growing innovation, effectively meeting diverse needs in asset safekeeping, product accounting, and asset valuation.
However, as China continues to advance the construction of a high-standard market system and deepen market-oriented reforms of production factors, higher requirements have been placed on the professionalism, precision, standardization, and risk management capabilities of commercial bank custody businesses.
According to an official from the Financial Regulatory Administration, the "Measures" clarify the basic rules for commercial banks to conduct custody businesses, reinforce bottom-line requirements, and refine management standards for key processes. This encourages banks to uphold the legal spirit of integrity, improve internal governance and systems, enhance service capabilities, increase transparency, and effectively manage risks to safeguard property rights, thereby promoting high-quality development of the custody business.
Custody refers to commercial banks acting as independent third parties to provide asset safekeeping and related services for various financial products and special funds. Banks must adhere to principles of integrity, diligence, independence, and risk isolation to ensure the independence of custodial assets.
The "Measures" stipulate that when the investment scope of a custody product includes non-standardized assets such as non-standardized credit assets or unlisted equity, commercial banks should conduct thorough assessments of their capabilities and service levels before providing custody services. Assessments should cover the capital strength, corporate governance, compliance, risk control, disclosure, and market influence of product managers, as well as the transaction structure, investment targets, exit mechanisms, and valuation methods of the products. Banks must also take reasonable measures to fulfill custody duties and manage risks in accordance with laws, regulations, and custody agreements.
To address unclear responsibility boundaries that may lead to excessive risk-taking, the "Measures" list prohibited duties and behaviors for commercial banks, including assuming credit or market risks of custody products, providing direct or indirect guarantees, or promising principal protection or guaranteed returns.
Li Guangzi, Director of the Banking Research Office at the Chinese Academy of Social Sciences, noted that custody is a fiduciary business where banks only provide safekeeping and related services without assuming product risks or offering guarantees. The "Measures" clarify responsibility boundaries to prevent risk contagion from clients to banks, enhancing financial system stability.
For supervision, the "Measures" require the Financial Regulatory Administration and its branches to strengthen ongoing oversight, improve inter-departmental coordination, and include compliance and prudence in regulatory ratings.
Industry experts emphasized that banks must establish robust governance frameworks for custody businesses, covering management systems, business independence, authorization controls, access standards, marketing, and data protection. Regulators should enhance continuous supervision, penalties, and reporting requirements.
Strengthening custody supervision helps mitigate risks, but banks must also improve internal management. Key measures include establishing risk management systems tailored to business scale and complexity, ensuring business independence through segregation of personnel, locations, accounts, and data, enhancing data protection, and conducting due diligence on custody products and partners.
Moving forward, commercial banks can provide services such as account opening, asset safekeeping, settlement, accounting, valuation, disclosure, and investment oversight in line with laws and custody agreements. Custody contracts must be signed, with clear compliance terms, full risk disclosure, and defined responsibilities and rights.
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