Regulators Want Chinese Banks to Stop Selling Commodity-Linked Products to Retail Investors

Posted on 05/27/2021

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The China Banking and Insurance Regulatory Commission’s asked lenders in China to cease selling investment products linked to commodities futures to retail investors. Many of these commodity products have exposed retail investors to greater investment losses due to volatile commodity prices. For example, in 2020, Bank of China sold crude-oil linked investment products to retail investors who incurred losses.

The Chinese regulator asked the banks to fully unwind their existing books for these products, which they manufacture and sell to individual investors.