Wealth management company regulatory ratings are divided into levels 1-6 and S-level, with downgrades limiting business expansion.

How Can AI Regulatory Ratings Become a Guide for Wealth Management Companies’ Transformation?

On March 16, the China Banking and Insurance Regulatory Commission issued the “Interim Measures for the Supervision and Rating of Wealth Management Companies” (hereinafter referred to as the “Measures”), which took effect immediately upon release.

The Measures consist of five chapters and 26 articles, covering general provisions, regulatory rating factors and methods, organizational implementation, application of rating results, and supplementary provisions. They set out the overall requirements for the supervision and rating of wealth management companies, including rating factors, basic procedures, and classification regulation.

The supervision and rating of wealth management companies refer to the regulatory process in which the China Banking and Insurance Regulatory Commission and its dispatched agencies evaluate the overall risk and management status of these companies based on daily supervision data, in accordance with the Measures. This process forms the basis for implementing classified regulation. Classification regulation involves regulatory agencies applying different policies regarding market access, supervisory measures, and resource allocation based on the rating results of wealth management companies.

According to the Measures, the rating factors for wealth management companies include corporate governance, asset management capability, risk management, information disclosure, investor protection, and information technology. These are composed of qualitative and quantitative rating indicators. The Measures assign weights of 10%, 25%, 25%, 15%, 15%, and 10% to the six modules respectively, and incorporate scoring adjustments such as bonus points, deduction points, and level adjustments to comprehensively evaluate the company’s operations and risk profile.

The basic procedure for ratings includes self-assessment by the institution, preliminary evaluation, review, and feedback of results. After the rating is completed, if the regulatory authorities discover significant information that was not available during the rating period, or if there are major changes in the company’s risk or management status, they may adjust the rating results dynamically.

The Measures specify that the rating results are categorized into levels 1-6 and S-level, with higher scores indicating greater risk and requiring increased regulatory attention.

Specifically, a score of 90 points or above is rated Level 1; 80 to 89 points is Level 2; 70 to 79 points is Level 3; 60 to 69 points is Level 4; 50 to 59 points is Level 5; and below 50 points is Level 6. Wealth management companies rated at Levels 5 or 6 are considered high-risk. Companies undergoing restructuring, takeover, or market exit, as recognized by the China Banking and Insurance Regulatory Commission and its dispatched agencies, are directly classified as S-level and are not subject to the current year’s regulatory rating.

Regarding the application of rating results, the Measures clarify that the ratings reflect the company’s operational management and risk level comprehensively. They serve as an important basis for the China Banking and Insurance Regulatory Commission and its dispatched agencies to allocate regulatory resources, determine market access, and implement differentiated regulatory measures.

In terms of rating outcomes, Level 1 and 2 companies are generally stable and pose fewer risks, with supervision mainly through non-on-site and routine inspections, prioritizing support for innovative pilot businesses such as pension wealth management. Level 3 and 4 companies have certain or significant risk issues, requiring targeted supervision, corrective measures, risk control of incremental risks, reduction of existing risks, and prevention of risk spread. Level 5 and 6 companies face serious risks, necessitating real-time monitoring of risk changes, strict restrictions, risk mitigation of high-risk activities, and orderly risk disposal or market exit.

The Measures require that if a company’s rating declines to a level that no longer meets the conditions for certain business activities, it must cease to expand those activities. If the next year’s rating remains unchanged or worsens, the company should gradually reduce its existing related business. The rating results are primarily for use by the China Banking and Insurance Regulatory Commission and its dispatched agencies and must be kept strictly confidential by the companies, not disclosed externally or used for advertising, promotion, or marketing purposes.

According to data from the China Banking and Insurance Regulatory Commission, by the end of December 2025, there were 32 wealth management companies with a total of 30.7 trillion yuan in ongoing wealth management products, accounting for 92% of the total market of 33.3 trillion yuan. After more than six years of development, the industry has achieved positive results in standardization and transformation, becoming an important part of China’s asset management sector.

The China Banking and Insurance Regulatory Commission states that the implementation of the Measures will strengthen regulatory guidance, leverage the “guiding role” of ratings, and urge wealth management companies to fulfill their fiduciary responsibilities. It will also accelerate industry transformation, guide companies to improve investment research and risk control capabilities, optimize resource allocation, and enhance regulatory precision and scientificity. Moving forward, efforts will be made to strengthen supervision and guidance, ensure the implementation of the Measures, continuously improve regulatory quality and efficiency, promote steady and compliant development of wealth management companies, and better serve residents’ wealth management needs and the high-quality development of the real economy.