Abstract: The self-settled trust structure in the channel business is the localization variation that occurs after the trust institution has been imported into China, which is different from the third-party benefit structure of the Anglo-American express trusts. The characteristics of its settlor control and trustee exemption, although different from the traditional express trusts, still fit the trust law theory and demonstrate the institutional flexibility of trusts in commercial field. The trust company’s channel business originates from the arbitrage impulse of China’s commercial banks to evade financial regulation, and is the primary mode of China's shadow banking. Its key issues in financial regulation are to prevent systemic financial risks and national industrial policy goals from failing. The misplaced strategy of the people's courts and financial regulation departments in China’s trust company’s channel business shows the regulatory competition between the judicial power and financial regulation power in the financial sector. As the passive neutrality of judicial power and the negative externalities of financial activities, the people's courts should treat the regulatory logic of financial regulatory power seriously based on the principle of respect specialty when handling financial disputes.