The National Financial Regulatory Administration issued the Asset Management Trust Management Measures (hereinafter referred to as the Measures) on October 30, to take effect on January 1, 2027.

As an important institutional document governing trust companies' asset management operations, the Measures set out systematic provisions covering product establishment, sales, investment management, risk control, and information disclosure, further clarifying the private placement nature of asset management trusts and trust companies' active management responsibilities.

From the Measures for the Administration of Collective Fund Trust Plans of Trust Companies implemented in 2007, to the unified regulatory standards established by the 2018 new asset management rules, and now to the introduction of dedicated measures for asset management trusts, the regulatory framework for trust companies' asset management business has been further improved.

For trust companies in a period of transition and adjustment, what changes will the new rules bring, and how should they adapt to the new business rules?

Active Management Capability Faces Scrutiny

The Measures position asset management trusts as private asset management products based on trust legal relationships, issued non-publicly to qualified investors with risk identification and tolerance capabilities, while explicitly upholding the principle of "seller diligence, buyer responsibility; seller negligence, compensation according to law."

Industry observers believe that by further clarifying the business boundaries of asset management trusts, regulators signal that trust companies' past operating models, which partly relied on channel business, fund pools, and implicit guarantees, will become unsustainable.

Specifically, the Measures impose clearer requirements on trust product investment, sales, and risk management.

Xing Cheng, a specially invited lecturer of the China Trustee Association, told the Financial Times in an interview that the new rules' impact on trust companies is mainly reflected in the following aspects: first, cutting off the old model's path; second, rigid constraints reshaping product design; third, making investment management more autonomous and look-through; and fourth, shifting risk control from a "backstop mentality" to a full-process systematized approach.

Tighter business rules place higher demands on trust companies' professional capabilities.

Especially under net value management, product returns will more directly reflect underlying asset conditions, and experience accumulated from non-standardized business cannot fully meet the requirements of standardized investment.

"Investment research capability is the biggest shortcoming trust companies need to make up for in the future. Trust companies have long been deeply engaged in non-standardized assets, with weak macroeconomic judgment, industry research, and asset allocation systems, and their equity investment and quantitative capabilities significantly lag behind public funds and securities firms."

At the same time, Xing Cheng believes that trust companies' real capability in net value management will be tested, as the customer experience previously sustained by smoothing measures will become unsustainable, and net value fluctuations will directly reveal underlying asset performance.

In addition, trust companies' digital operating systems urgently need reconstruction, as existing middle and back office systems were mostly designed for long-cycle non-standardized business and struggle to support the high-frequency valuation, risk control, and information disclosure needs of standardized products.

This means trust companies need to accelerate efforts in investment research teams, valuation and accounting, risk management, and digital systems.

Particularly for institutions lacking securities investment experience, building mature asset allocation and portfolio management capabilities requires sustained investment of time and resources.

Investor Protection Further Refined

As asset management business develops in a standardized manner, the funding side also needs to adapt to new requirements.

Yuan Tian, a specially invited researcher of the China Trustee Association, believes that the comprehensive and strict regulation of asset management trust products and business under the new rules will also substantively affect trust investors' perceptions and behavior, providing a rich "toolbox" for protecting trust investors' rights and, in the long run, helping the trust industry cultivate and accumulate more professional qualified investors and promote high-quality industry development.

Yuan Tian further stated that investors' understanding of trust products will become more professional, as what they buy will no longer be trust wealth management products based on a single project, but asset allocation products meeting diversified investment requirements.

This also means trust investors need a deeper understanding of trust products' underlying assets, familiarity with portfolio investment allocation strategies and basic logic, and simultaneous improvement in investment thresholds and professional knowledge.

Regarding investor rights protection, the new rules also make more specific arrangements.

Xing Cheng said the Measures significantly strengthen risk disclosure.

Trust documents must disclose risks in a conspicuous manner, and those intending to invest in other asset management products must explain on a look-through basis the underlying strategies and risk-return characteristics, with any form of principal-protection or return-guarantee wording strictly prohibited; in addition, information disclosure and net value authenticity are better guaranteed.

Products must be managed separately, accounted for separately, and calculated separately, and net value generation for non-standardized products and those involving natural persons must undergo external auditing on a product-by-product basis, so the net value information investors receive will be closer to the true condition of underlying assets.

Yuan Tian also believes the new rules require trust companies to establish a full-process investor rights protection system, through a special committee for the protection of settlor and beneficiary rights, to conduct special deliberations on major matters concerning investor rights protection, providing more targeted organizational and institutional safeguards for investors to participate in protecting their own rights.

At the same time, information disclosure has also been given a more comprehensive investor protection function.

Yuan Tian said information disclosure is both an objective standard for evaluating whether a trustee has fulfilled its duties diligently and an important channel for trust investors to safeguard their rights.

The new rules dedicate a section to regulating trust product information disclosure, including core provisions on disclosure content, methods, and frequency, aiming to help trust investors strengthen the means and channels to protect their rights, and also urging trust companies and asset management institutions to operate transparently and withstand professional scrutiny.

It should be noted that strengthening information disclosure and suitability management does not mean investment risks disappear.

Asset management trusts still have private product attributes, and investors need corresponding risk identification and tolerance capabilities.

As one industry insider put it: "Only when the professionalism of trust products on the asset side matches the professionalism of qualified investors on the funding side can seller diligence and buyer responsibility truly be achieved."

Industry Competition Landscape May Change, Small and Medium-Sized Trust Companies Need to Find Differentiated Space

After the new rules take effect, trust companies' competitive logic will also change accordingly.

In recent years, the trust industry has continued to compress traditional financing business, and asset management trusts have gradually become an important direction of transformation and development.

However, standardized business does not lack competitive barriers.

Securities firms, fund companies, bank wealth management subsidiaries, and other institutions have already accumulated strong advantages in investment research systems, product management, and customer resources, so trust companies entering related markets still face considerable competitive pressure.

Xing Cheng believes that after the new rules are introduced, the trust industry will substantively enter a comprehensive period of transformation and development, with market positioning and business models accelerating toward product standardization, niche markets, institutionalized clients, and mainstream services.

In the next three to five years, trust companies' securities investment trusts will face competitive pressure from securities firms, fund companies, private funds, wealth management subsidiaries, and many other institutions with greater scale, specialization, and obvious first-mover and policy advantages, and whether securities investment standardized trusts can continue to be the core carrier and growth engine of asset management trusts is highly uncertain.

At the same time, industry concentration may further increase.

Xing Cheng said leading companies will further expand market share relying on shareholder resources, active management capabilities, and risk control advantages, while small and medium-sized institutions need to avoid homogeneous competition, seek differentiated survival, and find new profit growth points as soon as possible.

For small and medium-sized trust companies, blindly following leading institutions in securities investment business may not create competitive advantages.

Combining their own shareholder backgrounds, regional resources, and professional accumulation to find investment areas and client groups with comparative advantages may be more practical.

In addition, some industry insiders believe competitive barriers will shift from "licenses and channels" to "investment research and net value management."

Whether an institution can continuously provide standardized portfolios matching risk and return under net value management will become the core watershed distinguishing asset management trust competitiveness, and trust companies lacking investment research accumulation will be forced out of the active management track.

For the trust industry, the implementation of the new rules is only the institutional starting point of transformation and development.

How to translate regulatory requirements into daily operating capabilities and how to form sustainable product supply while controlling risks still need trust companies to provide answers in business practice.