THE central bank has launched a two-month-long examination into online asset managers, China’s latest step to curb financial risk in the US$15 trillion asset management industry, sources with knowledge of the matter said.

Authorities across China will conduct checks from April to end-June in a bid to fend off systemic financial risk and protect social stability, the sources said.

A central bank document stated that online asset management businesses without a proper licence should clean up their existing businesses by end-June 2018.

News of the central bank examination comes as the market is waiting for the People’s Bank of China to release the final version of new rules for asset management businesses as part of widening crackdown on risk in China’s financial system.

President Xi Jinping approved the new rules in March.

The rules are expected to close loopholes that allow regulatory arbitrage, reduce leverage levels to curb asset price bubbles and rein in shadow banking activity.

Selling asset management products without a licence could be deemed as illegal fundraising, illegal acceptance of deposits and illegal issuance of securities, the document stated. (SD-Agencies)