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By Timmy Shen / Feb 18, 2019 11:46 AM / Finance

Another major bank in China has won approval to set up a wealth management unit, a move that could shake up the $4.4 trillion wealth management product (WMP) industry.

The Industrial and Commercial Bank of China (ICBC), the largest lender in the world by assets, has gained approval from the China Banking and Insurance Regulatory Commission (CBIRC) to establish WMP units, the regulator said Sunday in a statement.

“The ‘big five’ banks that have been approved to set up wealth management subsidiaries are making efforts to prepare for operations and to expand their lineups of institutional investors,” said the CBIRC.

The other four major banks – Bank of China, China Construction Bank, Agricultural Bank of China and Bank of Communications – have all been approved to establish such units.

The approvals come after the CBIRC unveiled in December long-awaited rules governing commercial banks’ asset management subsidiaries, taking a relaxed stance on how banks can invest wealth management funds.

In the past, banks had to sell wealth management products through a mutual fund partner, but now commercial banks are allowed to directly invest in stocks by creating wealth management subsidiaries, which has also triggered a race between banks and mutual fund firms for talent with stock investment experience. Analysts have said the measure was aimed at helping rescue the Chinese mainland’s slumping stock markets.

Related: Two ‘Big 4’ Banks Approved for Wealth Management Units

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