BEIJING, June 18 (Reuters) - China has given the power to approve asset-backed securities (ABS) to the provincial offices of its bank regulator, three sources said on Thursday, the latest measure aimed at quickening the development of a nascent securitisation market.
Three people with direct knowledge of the matter said the China Banking Regulatory Commission (CBRC) has relaxed the rules for ABS by allowing its provincial branches to give the regulatory green light for new issuance.
This means that Chinese city commercial banks can now turn to their local provincial bank regulator to sign off on their ABS plans, a move that will shorten the time taken by regulators to approve deals, one of the people said.
However, big commercial Chinese banks are still required to seek approval from CBRC’s headquarters in Beijing for new ABS issuance, the source said.
The CBRC was not immediately available for comment.
This is the latest step taken by China to simplify rules for the ABS sector. The government in December announced that companies would no longer be subjected to close scrutiny for each new ABS issuance, as long as the firms are properly registered as approved issuers.
China’s bid to encourage securitisation is part of broader plans to deepen its financial market, which could lower the financing cost for companies, and increase investment avenues for ordinary savers. (Reporting by Koh Gui Qing; Editing by Richard Borsuk)