CSRC calls for comment on proposed derivatives trading supervision rules
As the CSRC points out, these measures are largely aimed at getting China’s over-the-counter derivatives market aligned with international standards, as agreed upon by G20 leaders in 2009. Just as was the case with the Futures and Derivatives Law, this piece of complementary regulation serves to ensure the development of a more sophisticated, robust, and secure Chinese derivatives market…
CSRC issues draft of proposed rules to supervise futures firms
These measures, like the Measures for the Supervision of Derivatives Transactions, are complementary regulations that provide more detailed rules to implement the Futures and Derivatives Law, a key piece of legislation to build a more sophisticated capital markets system that aligns with international standards…
CBIRC summons insurers over guaranteed returns
The problem facing China’s insurers is the opposite of the one recently confronted by Silicon Valley Bank (SVB). As US interest rates rose, the value of SVB’s stock of treasury holdings declined, making it increasingly difficult for the lender to manage its liquidity needs…
CBIRC issues final rules on classification of trust companies’ trust business
These regulations are part of the CBIRC’s multi-year efforts to clean up the trust sector, which used to be at the heart of China’s shadow banking system. Following the implementation of new asset management rules in 2018, trust companies’ shadow banking activities – such as capital pooling and illicit channeling – were put under stricter scrutiny and reduced significantly in size…
Shanghai and Shenzhen stock exchanges release guidelines encouraging insurance asset management firms to engage in ABS, REITs businesses
These Guidelines have two major objectives. First, to support the government’s broader efforts to develop the market for infrastructure REITs and guide more private capital into infrastructure investment…
CBIRC abruptly suspends bond quote data feeds
The abruptness and opacity of the move won’t help engender trust in China’s financial regulatory apparatus – something that’s a key goal for policymakers – nor is it an encouraging sign for foreign financial firms operating on the mainland, either…
Hong Kong Stock Connect expands by nearly 40%
This is financial opening with Chinese characteristics…
China creates two new Party-led financial planning commissions
Xi Jinping was clearly unhappy with the ability of the existing institutional structure to deal with mounting financial risks – including property and local government debt on the domestic side, and sanctions on the international side – and wanted the Party more firmly in control. Xi himself is likely to head the CFC, as he does the other four Party commissions…
PBoC cuts RRR by 0.25%
RRR cuts aren’t stimulus. The PBoC uses them to lower bank funding costs and ensure that there is sufficient liquidity in the financial system…
State Council overhaul of financial regulatory system strengthens central oversight of local watchdogs
A key challenge facing regulators at all levels over the next few years will be managing the excessive debt accumulated by local authorities. The problem emerged partly because local financial supervision bureaus let local governments get away with too much…
Yi Gang keeps his job as PBoC governor, Liu Kun stays on as finance minister
This is positive news for the economy. Liu and Yi are competent, professional, and respected. Both possess the political capital needed to drive policy amid a period of government transition, financial-sector restructuring, and economic uncertainty…
PBoC emphasizes need to reduce financial sector risk
Policymakers and regulators have done an impressive job cleaning up a chaotic sector that was arguably once the most prominent risk to the economy. Beijing now views this campaign as largely successful – and largely complete…
CBIRC calls for financial firms to “return to their roots”
Over the past five years, regulators have dismantled shadow banking, recapitalized problematic banks, and in general made the financial system far less risky. Recent developments have led us to believe that the next few years will be similarly tumultuous, however the focus on cleaning up the excesses of the system will diminish…
Two Sessions reports highlight need to control financial risk
Policymakers and regulators have done a bang-up job cleaning up a chaotic sector that was arguably once the most prominent risk to the economy. The objectives in the Two Sessions reports are largely aimed at tying up that campaign…
Financial regulators likely to see big pay cuts in overhaul of regulatory system
These salary cuts – if they happen – are more the consequence of the administrative overhaul than anything, but they also fit nicely into Xi Jinping’s narrative of Common Prosperity and an ongoing campaign to control oversized pay packets in the financial sector…
Chicago Mercantile Exchange to launch USD/CNH options in April
This is a boost for RMB internationalization, no doubt. CME is the world’s largest regulated FX marketplace and gaining its blessing will boost the attractiveness of holding and trading CNH. But, RMB’s internationalization is a marathon, not a sprint…
State Council to overhaul financial regulatory system
We expect the reforms will change the way Beijing approaches financial regulation, concentrating prudential supervision with the PBOC while building a new, robust agency focused on supervising the conduct of all financial institutions outside of the securities sector…
February foreign financial institution approvals and specific financial opening developments
Morgan Stanley; UBS; Van Eck; Warburg Pincus; Standard Chartered; Alvarez & Marsal
CSRC issues interim rules for “important” money market funds
These rules are part of a broader campaign by China’s financial regulators to clean up the capital markets and reduce systemic risk. They are also an effort to bring MMFs …
Cross-border RMB transactions hit record high in 2022
The proportion of cross-border transactions denominated in RMB is likely to increase in the coming years as China …