New Regulations for Financial Management Company Supervision Ratings Implemented: Scale Indicators Yield to Quality, 30 Trillion Market Embraces Quality-Oriented Reshaping

How Will the Weightening of Investor Protection Change the Industry Ecosystem?

The financial management industry continues to face criticism for issues such as performance manipulation, promotional marketing, and declining returns upon purchase. Against this backdrop, significant policies aimed at regulating industry development have been implemented, marking the official departure of the financial management sector from a scale-driven development model.

On March 16, the National Financial Regulatory Administration disclosed that it has recently released the “Interim Measures for the Regulatory Rating of Financial Management Companies” (hereinafter referred to as the “Measures”), which stipulate the overall requirements, rating factors, basic procedures, and classified supervision for the regulatory ratings of financial management companies, effective from the date of publication.

It is noteworthy that the scale indicator has been explicitly excluded from the regulatory rating factors, with asset management capability and risk management collectively accounting for 50%, thereby granting higher weight, while investor protection has also been incorporated as a hard constraint.

Quality of Ratings Over Scale

A responsible official from the National Financial Regulatory Administration stated that it is essential to improve the regulatory framework for financial management companies, to promote their continuous enhancement of capability levels, and to implement the “Measures.” First, it is beneficial for strengthening regulatory guidance. The rating serves as a “guiding stick” to urge financial management companies to establish a prudent and stable business philosophy and to effectively fulfill their fiduciary management responsibilities. Second, it facilitates accelerated transformation and development. It encourages financial management companies to benchmark against industry leaders, identify gaps, and continuously strengthen their capability building, enhancing intrinsic development momentum. Third, it aids in the reasonable allocation of regulatory resources. Through regulatory ratings, it better reflects the risk status and operational characteristics of financial management companies, clarifying key regulatory institutions and areas, thereby improving regulatory precision and scientificity.

The overall direction of the “Measures” emphasizes “quality over scale,” with asset management capability and risk management each accounting for 25%, collectively making up half of the core indicators of regulatory ratings, highlighting the dual emphasis on the funds management capability and risk prevention ability of financial management companies.

The “Measures” establishes six rating modules: corporate governance, asset management capability, risk management, information disclosure, investor rights protection, and information technology, assigning them weightings of 10%, 25%, 25%, 15%, 15%, and 10%, respectively. It also sets specific criteria for bonus and penalty items and grade adjustment factors to conduct a comprehensive evaluation of the operational management and risk status of financial management companies.

Zeng Gang, chief expert and director of the Shanghai Financial Development Laboratory, told Yicai that by listing asset management capability as a 25% primary weight, the “Measures” institutionally sever the pathway of “large scale → high rating.” After the shift in rating orientation, if institutions want to maintain or improve their ratings, they must make substantial investments in research and investment capabilities, risk systems, and product diversification, significantly compressing the space for relying on scale for facade.

The scale orientation has once caused serious “deformation” in the industry. Zeng Gang further remarked that institutions relied on the resources of their parent banks to expand rapidly, using measures to reduce net value fluctuations and indirectly guarantee returns to seize market share, which is contrary to the direction of the asset management new regulations that aim to “break the guarantee, transform to net value, and return to the essence of fiduciary duties.” Excluding scale from ratings is a direct response to this issue. The asset management capability module encompasses indicators such as research and investment levels, product line richness, absolute returns, and performance achievement rates, directly assessing active management capabilities with a clear direction.

A relevant official from the Financial Regulatory Administration indicated that the formulation of the “Measures” adheres to a risk-based and capability-oriented approach, firmly grasping the essence of asset management as “entrusted by others to manage funds,” placing risk management and asset management capabilities at the core of ratings, guiding financial management companies to cultivate intrinsic risk prevention mechanisms and enhance active management and value creation capabilities.

50 Points as the “Life or Death Line” for High-Risk Identification

After more than six years of development, financial management companies have achieved positive results in standardized transformation and have become an important component of China’s asset management industry.

As of the end of December 2025, the 32 financial management companies in the country had a total financial product scale of 30.7 trillion yuan, accounting for 92% of the total market financial product scale of 33.3 trillion yuan.

However, in the past, the financial management industry accumulated three typical problems driven by scale. Zeng Gang pointed out that there was a high degree of product homogeneity, with many institutions concentrated on short- to medium-term fixed income; the net value transformation was merely superficial, with some products using yield smoothing to mask real fluctuations; and there was an emphasis on channels over research and investment, causing core resources to flow towards marketing rather than capability building.

Last year, several bank wealth management subsidiaries received hefty fines for violations. According to incomplete statistics, institutions such as Jiao Yin Wealth Management, Bank of China Wealth Management, Guangyin Wealth Management, and Huaxia Wealth Management were all penalized within the year, with penalties exceeding 10 million yuan. Among them, Jiao Yin Wealth Management was fined 17.5 million yuan for issues such as non-compliance with information disclosure and inadequate post-investment management duties, the highest fine of the year. Other institutions’ violations also involved irregular investment operations, lack of systematic control, and non-compliance with regulatory data reporting, among various aspects.

To promote healthy industry development, regulatory authorities have prioritized the regulatory rating of financial management companies, making the rating results a crucial basis for allocating regulatory resources, conducting market access, and implementing differentiated regulatory measures. A score of 50 points has become the “life or death line” for identifying high risk.

The rating results are specifically divided into levels 1-6 and S level, with scores of 90 points and above classified as level 1, 80 to 90 points as level 2, 70 to 80 points as level 3, 60 to 70 points as level 4, 50 to 60 points as level 5, and below 50 points as level 6. A higher score indicates higher risk for the institution, with level 5 and 6 institutions directly identified as high-risk financial management companies; S level applies to institutions in restructuring or takeover situations.

The regulatory rating results essentially determine what financial management companies can and cannot do. For instance, level 1 institutions will receive priority support for innovative pilot businesses, primarily under off-site supervision. Level 5 institutions will face strict restrictions and mitigation of high-risk operations, with timely initiation of disposal plans; level 6 institutions cannot restore normal operations solely through self-rescue and need to implement orderly risk handling or market exit.

Wang Yifeng, chief analyst of the financial industry at Everbright Securities, stated that the “Measures” aim to leverage the rating as a “guiding stick,” urging financial management companies to adopt a prudent and stable business philosophy and encouraging them to benchmark against advanced peers while continuously strengthening their capability building.

Industry Differentiation and Accelerated Transformation

Promotional marketing, declining yields upon purchase, and other issues in the financial management industry have long been criticized by the market, and multiple regulatory policies aimed at standardizing industry development have been implemented intensively, with strict regulation becoming the main theme of industry development.

In December 2025, the Financial Regulatory Administration released the “Management Measures for Information Disclosure of Asset Management Products of Banking and Insurance Institutions,” requiring truthful and accurate disclosure of net values, yields, and investment asset conditions. In February 2026, the “Measures for the Appropriateness Management of Financial Institution Products” came into effect, explicitly prohibiting financial institutions from misleading or inducing clients to purchase related products through performance manipulation or improper presentation, as well as exaggerating product yields.

Against this background, the logic of growth in the financial management industry’s scale has changed. Wang Yifeng analyzed that in 2025, the scale of financial management, supported by multiple favorable factors, increased by 3.34 trillion yuan to 33.29 trillion yuan for the year. However, a year-on-year decrease in industry scale in 2026 is highly probable, with estimated increments of 2 to 3 trillion yuan. As 2026 approaches, the “disintermediation” of deposits still has support, but growth in the financial management scale may not be “smooth sailing,” with a high probability of year-on-year decreases.

In his view, the growth of financial management scale will face at least three new challenges: a decline in financial management scale in the first quarter will drag down total scale increments, and the financial management yields in 2026 may weaken the client experience compared to the previous year; after the “ranking” products are opened, there may be pressure on scale as actual yields decline.

The implementation of the regulatory rating measures will also promote structural differentiation in the industry, with the head effect continuing to stand out. Zeng Gang believes that large bank-affiliated financial management companies, with their significant advantages in corporate governance, risk management, and information technology, will likely be rated at levels 1-2 and will preferentially obtain qualifications for innovative businesses. In contrast, small and medium-sized city and rural commercial banks’ financial management companies, due to shortcomings in research and investment capabilities, system construction, and information disclosure, are likely to fall into a negative cycle of “low rating → limited business → shrinking scale.” The sustainability of some institutions will come under pressure, and industry concentration will further lean towards the leaders, accelerating the cleaning process of small institutions.

It is worth noting that investor protection has been included as a hard constraint in the industry, accounting for 15% of the weighting in regulatory ratings, becoming an important consideration for the operational development of financial management institutions.

“Appropriateness management, complaint handling, and sales compliance directly affect institutional ratings. If an institution is penalized due to concentrated consumer complaints or ineffective execution of appropriateness, it will lead to restrictions on business qualifications, forming a positive constraint of ‘protecting investors → maintaining ratings → sustaining business,’” Zeng Gang analyzed. From the perspective of institutional design logic, the “Measures” elevate consumer protection from a post-event remedy to a pre-event constraint on institutional behavior, representing a significant step in the “big consumer protection” policy system. For institutions that rely on vague disclosures and exaggerated expected returns to attract clients, the new rating framework will create ongoing institutional pressure, pushing the industry to shift from selling products to providing services.

It should also be mentioned that the “Measures” differ slightly from similar regulatory ratings by assigning 15% weight to both information disclosure and investor rights protection, collectively accounting for 30%, the highest among similar ratings, and it is the first rating measure to establish investor protection as an independent core weighting module.

Currently, regulatory ratings for trust companies include corporate governance, capital requirements, risk management, conduct management, and business transformation; while the ratings for insurance asset management companies include governance and internal control, asset management capability, comprehensive risk management, transaction and operational guarantees, and information disclosure.

Zeng Gang believes that this design is directly aligned with the “big consumer protection” policy orientation, reflecting the policy intent of balancing capability building and investor protection in the post-new asset management regulation phase.

(This article is from Yicai.)