China -  Chinese law firm

Can trust companies enter the bond market

Can trust companies enter the bond market?

Yes, even though their entry into the bond market has been limited to date.  There are four main areas in which trust companies could enter the bond market:
1. Trusts can distribute, or even issue enterprise bonds, which can be issued by any state-owned, non-financial institutions that are under regulatory oversight.
2. Trusts may also underwrite and distribute government bonds.  No trust companies currently issue government bonds, though any company with over RMB 800 million in assets is eligible. 
3. Financial bonds, medium-term bonds and commercial bonds are other options for trusts.  These are traded only in the inter-bank market.
4. Trusts have the possibility to underwrite asset-backed and mortgage-backed securities, though these have generally remained in the domain of commercial banks.



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