In a move that reflects the old law that ruled US financial services for many years, China has made it clear that insurance and banking will be kept well away from each other. The Beijing government has banned commercial banks from underwriting securities and insurance policies.

The People’s Bank of China announced that commercial banks should serve only as intermediaries that earn commission when they distribute shares, bonds, dividends and interest.

However, it doesn’t seem to be a full-scale ban, with banks still able to sell securities and policies for brokerages and insurers. But the move does serve as a blow for commercial banks that have been pushing for more cross-sector activities in preparation for increased competition soon to enter the market under the WTO rules.