The guidelines, which were first released in November last year in draft form, unify regulatory standards for asset management products and address issues such as regulatory arbitrage, according to a statement released by the People's Bank of China, the central bank (source: Chinanews,com).

The transitional period of the new rules will be from Friday to the end of 2020, compared with the end of mid-2019 as set in the draft guidelines, the report said. The longer timeline gives firms enough time to comply.

The official guidelines also set different leverage ceilings on different asset management products according to their risk levels. To illustrate: the total assets for an open-ended public offering product should not exceed 140 per cent of the product's net assets, while the total assets for a closed-end public offering product should not be greater than 200 per cent of its net assets.

Rapid growth of Chinese asset management, seeing the sector hold a total of $15.8 trillion as at the end of last year, has also prompted worries about arbitrage of the rules and risky levels of leverage.

Last year, the International Monetary Fund fired a warning about practices in the country's banking sector.

A recent report by said that China’s main banks face short-term financial headwinds as bad loans and other practices in the country are cleaned up.