Trustee Business -- Innovation and Regulation

Author: Ding Jianchen / Wang Weidong (Editor-in-Chief)
Publisher:
Publish Date: 2003-10-06
Features: For a long time, China's "trust industry" had once fallen into a distorted development cycle due to the lack of corresponding institutional safeguards. Asset inflation, interest inflation, and unreal capital were persistent problems in the entire trust industry. To rectify the situation, after five rounds of cleanup and regulation, the "One Law and Two Regulations" were formulated and promulgated, establishing the basic legal framework for trust activities in China. This ended the trust industry's 20-year period of and provided a strong legal guarantee for its sound operation and innovative development. At the beginning of the new century, China's trust industry stood at a new starting point, taking business cleanup and re-registration as an opportunity. Through the [beneficiary system of separation between the ownership of trust property and the right of benefit, it began to establish a limited liability and bankruptcy isolation system based on the independence of trust property, as well as a risk disclosure and information disclosure system for fund trusts. This further protected the safety of shareholders' assets and the stability of investors' expectations, gradually strengthening corporate governance and business innovation. The application of trust is as limitless as human imagination. Law is the cornerstone of a country's system, and innovation and regulation are eternal themes of the market economy. As one of China's four major financial pillar industries, the trust industry, with the promulgation and implementation of the "One Law and Two Regulations" and the basic completion of the governance and regulation of the trust industry, will undoubtedly usher in a more brilliant future through business innovation and standardization.