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UPDATE 1-China begins managing asset-backed securities issues via new system-sources
November 20, 2014 / 10:48 AM / 3 years ago

UPDATE 1-China begins managing asset-backed securities issues via new system-sources

(Adds details)

BEIJING/SHANGHAI, Nov 20 (Reuters) - China’s banking regulator has started to manage issuances of asset-backed securities (ABS) through a registration system, simplifying the process, sources with direct knowledge of the situation said on Thursday.

The move represents another major move by Chinese regulators to establish market-oriented mechanisms for securities issuances.

Officials at the China Banking Regulatory Commission could not be immediately reached for comment.

The sources, who declined to be identified as they are not allowed to speak to media, said the new registration system had already been applied to one issue but did not provide details.

Under the previous approval system, issuers had to deliver written applications of all details for regulators to review and obtain approval before issuance.

China is expanding asset securitisation on an unprecedented scale as the government looks to increase bank liquidity without expanding the money supply.

At the end of last year, Chinese financial institutions had issued a combined 140.9 billion yuan ($23 billion) of ABS products since the programme was launched in 2005, according to local media.

ABS are securities created by packaging together a pool of underlying assets, typically small loans that are difficult to sell individually.

In another move by Beijing to reform its financial markets, there are also plans to migrate the management of initial public offerings to a registration-based system, similar to those used in major developed markets, from the current approval system.

$1 = 6.1230 Chinese yuan Reporting by Xie Heng, Xu Yong and Kazunori Takada; Writing by Lu Jianxin; Editing by Jacqueline Wong

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