BEIJING — The Chinese trust sector has established a professional body in a move to mitigate risks in the industry.
The China Trust Protection Fund Co Ltd (CTPF), which was jointly set up on Dec 19 by the China Trustee Association (CTA) along with 13 other trust companies, has registered capital of 11.5 billion yuan ($1.88 billion).
CTPF, which will be under the supervision of the China Banking Regulatory Commission (CBRC) in terms of market access, will be in charge of raising further capital as well as the management and use of its finances, but it will not be a profit-driven organization.
All business activity carried out by the company must comply with CBRC requirements on capital adequacy and liquidity ratio.
The establishment of the professional management body will ensure risks in the sector are dealt with competently, thus, boosting investor confidence, the CBRC said in a statement on its website.
Sources familiar with the matter told Xinhua that Xu Zhichao, vice-president of China Cinda Asset Management Co Ltd will be likely be named chairman.
The total value of trust assets in China stood at 12.95 trillion yuan as of the end of the third quarter, up 18.7 percent compared to the end of 2013, according to the CTA.