The National Financial Regulatory Administration has released the Administrative Measures for Asset Management Trusts. A responsible official from the NFRA's relevant department stated that trust companies conducting asset management trust business must provide investors with a thorough explanation of risks and are prohibited from promising capital preservation or guaranteed returns in any form.

The Measures set out four main requirements. First, the scope of institutions permitted to act as distribution agents is restricted. At the current stage, only trust companies, commercial banks, insurance companies, and securities companies are allowed to distribute trust products on an agency basis. Other institutions and individuals are prohibited from engaging in disguised trust product sales.

Second, risk disclosure requirements are tightened. Trust documents must disclose risks associated with trust products and the principles of risk assumption in a prominent manner. For trust products that plan to invest in other asset management products, the investment strategy and risk-return characteristics of the underlying asset management products must be disclosed on a look-through basis.

Third, sales management is strictly regulated. Trust companies are required to strengthen the management of sales channels, documents, and personnel, and to clearly delineate responsibilities with distribution agents. The Measures specify prohibited conduct for both trust companies and distribution agents during the product sales process.

Fourth, the principle of risk matching must be upheld. Trust companies shall assign a risk rating to each trust product individually and define the scope of investors suitable for purchasing it. They must also assess the risk tolerance level of each ordinary investor, including natural persons, on an individual basis, and sell trust products that match the investor's risk tolerance.