China orders videotaping of retail investment sales

China’s banking regulator has issued new regulations requiring financial institutions to make video and audio recordings of all funding product income, pronouncing they were had to “similarly adjust marketplace order and protect purchaser rights”.

The recordings may also assist kingdom-owned banks and the authorities fend off repayment needs from retail customers when their investments turn sour.

If investors make irrational choices after sales personnel have definitely explained the dangers,

retail

then they will should be given the consequences,” stated Zhao Xijun, a finance professor at Renmin University in Beijing. “In the occasion there is a dispute, the recordings can be used as evidence.”

Most wealth management products in China are bought through banks on behalf of third-party issuers. Although the banks do now not assure third-birthday party WMPs, traders regularly expect that the bank or authorities will compensate them for any losses.

The new surveillance guidelines issued by means of the China Banking Regulatory Commission require financial institutions to preserve the recordings for six months after the relevant funding product has expired. Banks are also no longer allowed to market investments to customers who refuse to be recorded.

 

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The CBRC guidelines coincide with a larger authorities marketing campaign, ordered by President Xi Jinping, to discover and mitigate the myriad economic dangers that have been building in the International’s second-biggest economic system.

The cost of superb WMPs has soared from Rmb4.6tn ($690bn) on the give up of 2011 to Rmb29tn remaining 12 months, consistent with records from Wind Information. But yr-on-year increase moderated in 2016 to 23 according to cent, compared to a fifty six in line with cent growth within the value of splendid WMPs in 2015.

Data for the cost of WMP  retail products orders  bought this year aren’t yet sales to be had. In extent phrases,

orders

 

Chinese monetary institutions bought forty three according to cent extra WMP contracts via August 25 compared to the same duration a 12 months earlier.

“The monetary product enterprise has developed rapidly over current years and funding merchandise have become more and more complex,” the CBRC said. “This has caused deceptive sales behaviour and sales of unauthorised financial merchandise in some banks.”

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China’s banking regulator isn’t always the primary to order surveillance of funding sales staff and retail clients. The Hong Kong Monetary Authority requires audio taping of banks’ sale of funding products in certain instances. This rule changed into implemented after retail investors inside the metropolis misplaced money on “mini bonds” linked to Lehman Brothers, sparking protests.

The CBRC guidelines will upload to the mountain of surveillance photos already amassed by using the ruling Chinese Communist Party within the Global’s most populous united states. Authorities are rolling out camera networks in city centres across the united states, in particular in regions together with Tibet and Xinjiang in which ethnic tensions regularly run high.

At the alternative quit of the danger spectrum, officers inside the southern border metropolis of Shenzhen have set up cameras that become aware of jaywalkers and then venture their private records on close by display displays.

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