The State Council issued a draft regulation on the management of pawnshops to adapt to the fast development of China's pawnbroking business, according to an announcement by the Ministry of Commerce released Tuesday, the China Securities Journal reported.

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The regulation says the establishment of pawnshops should get approval from provincial commerce departments, and pawnbroking business should be managed as a special trade.

The regulation clearly defines that pawnshops are not allowed to take deposits from the public, or do so in a different form. They are also banned from issuing credit. The loans pawnshops get from commercial banks should not exceed their net assets, the report said.

It also has clear regulations on the types of pawns, according to the report.