Secondly, due to the characteristics of closed management, trust funds will not be affected by the bankruptcy of trust companies. In addition, the trust fund is deposited in a special account of the bank. Even if the trust company goes bankrupt, the client has the right to choose a new institution to manage it.

When a general trust company violates laws and regulations, the punishment process is basically: informed criticism, fine and closure.

202 1 The new asset management regulations and deleveraging policies were released, and more and more trust companies were punished. What's more, trust companies will be punished by suspending business for rectification and carrying out internal rectification within a time limit, but this punishment will not cause any losses to investors.

Small probability of bankruptcy

In this regard, the choice of trust network can also clearly tell investors that the possibility of bankruptcy of trust companies is still very small and almost non-existent.

The reason is also very simple. In addition to normal operation and investment, the trust license held by the trust company itself is a very valuable asset.

The trust license covers all areas of finance. There are only 68 trust companies in China, and the CBRC has stopped issuing new trust licenses, which are even scarcer than bank licenses. When a trust company has financial difficulties, it usually obtains new incremental funds by replacing equity.