24 May 2021

CBIRC issues new licensing system for financial institutions

On May 7, the China Banking and Insurance Regulatory Commission (CBIRC) issued the “Banking and Insurance Institution Licensing Administrative Measures” which updates regulations on its financial licensing system with the aim of consolidating and simplifying it…

24 May 2021

Guangdong government highlights financial development measures for GBA

On April 25, the Guangdong provincial government released a draft of the province’s “14th Five-Year Plan (2021-2025) for Economic and Social Development and the Long-range Objectives Through the Year 2035.” The draft plan outlines several goals related to the financial development of the Greater Bay Area (GBA) in general and of Guangdong province in particular…

21 May 2021

NPC deliberates Futures law

As in other areas of its financial markets, China is trying to balance greater liberalization of derivatives trading with sufficient regulation to maintain overall financial stability and offer ample protection to investors. The draft Futures Law is an attempt to put guardrails in place to guide the further development and opening of the derivatives market…

20 May 2021

Beijing expands QFLP program

The expansion of Beijing’s QFLP program is part of a broader push to open up the services sector in Beijing. In September 2020, the State Council approved a plan, formulated by the municipal government and the Ministry of Commerce, to set up demonstration zones and pilot programs to further open the capital’s services sector. The plan included liberalizing the scope of public market investment through the QFLP pilot program…

18 May 2021

PBoC, NDRC and CSRC release unified catalogue of industries and projects eligible for green bond funding

The updated Catalogue is a major step forward in implementing China’s climate change commitments to reach peak emissions by 2030 and carbon neutrality by 2060. Bringing the three regulators together behind one set of classifications and rules is no mean feat –– having one single reference point will have a significant impact on the domestic green bond market and play a key role in helping Beijing ramp up its support for green finance…

18 May 2021

PBoC releases updated anti-money laundering measures

Aside from complying with the requirements of the FATF, the PBoC’s efforts to upgrade and improve anti-money laundering regulations are also key components of the government’s financial derisking campaign and efforts to combat financial crime. The inclusion of nonbank financial institutions (NBFIs) in the regulations is aimed at addressing the criticisms in the FATF’s evaluation report, and ensuring that they are subject to the same level of regulatory supervision as banks and have adequate internal control systems and risk management policies in place…

18 May 2021

CBIRC issues measures to encourage lending to micro and small enterprises

Inclusive finance has been high on the government’s agenda for several years as it works to improve financial support for groups traditionally underserved by banks who see them as less financially rewarding and riskier. MSEs have long been shunned by banks partly because they have little collateral to pledge when they apply for loans, hence the CBIRC’s emphasis on promoting the use of movable property as security…

18 May 2021

Guangdong regulators issue draft rules for GBA wealth connect program

Once implemented, the WMC will be a major step forward in the financial integration of the GBA. However – as indicated by the draft rules – regulators will initially take a conservative approach to managing money flows within the region…

26 Apr 2021

PBoC tells interbank bond market agencies to improve access and services to foreign institutional investors

Foreign investors have been pouring money into China’s bond markets over the past two years for four reasons. First, regulators have allowed greater access. Second, CGBs have started to be included in global benchmark bond indexes …

26 Apr 2021

CBIRC seeks feedback on proposals to expand personal insurance market for the elderly and children

Demographic and economic trends are set to put significant pressure on the country’s fiscal resources Policymakers’ drive to develop commercial insurance into a key supplement to existing social safety nets is an attempt to address these pressures. The special focus on providing adequate elderly care through commercial channels reflects concerns about the sustainability of China’s overburdened pensions and social welfare systems …

26 Apr 2021

PBoC appoints new deputy governor with an eye to IMF role

Promoted to his second vice-ministerial position at the age of 48, Li has all the hallmarks of a rising star in China’s financial system. There is speculation that Li’s appointment is a prelude to him taking a top job at the International Monetary Fund (IMF) …

26 Apr 2021

CSRC revises pre-IPO evaluations for STAR Market

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26 Apr 2021

Citigroup to seek license for new wholly owned securities business

Rules on foreign ownership of securities businesses were eased in 2020, after which several foreign lenders,including JPMorgan Chase & Co.; Goldman Sachs Group Inc.; and Credit Suisse Group AG, gained approval from regulators to take majority ownership of their securities joint ventures. Most are now seeking to increase their stakes further, with some aiming for 100% ownership …

26 Apr 2021

CBIRC approves DBS Bank’s purchase of stake in Shenzhen Rural Commercial Bank

In the early 2000s, as China cracked open the door to its financial services sector, a few foreign banks took the plunge and bought big stakes in Chinese city and rural commercial banks. But those forays didn’t work out well as the foreign banks struggled to influence the local management and were frustrated by cultural differences …

26 Apr 2021

Guangzhou Futures Exchange officially opens

The GFE is the country’s first new futures exchange to open in 14 years and is one of the key financial initiatives in the Greater Bay Area master plan. Launching an exchange without any clarity about what exactly will be traded is somewhat unusual and disappointing …

26 Apr 2021

Governor Yi Gang reiterates PBoC’s commitment to green finance

This is the third public speech Yi has given in less than a month focused on climate change and green finance, reflecting the importance the central bank is now attaching to the issue in the wake of Xi Jinping’s pledges last year to reach peak emissions by 2030 and carbon neutrality by 2060. Yi’s repeated statements drive home the message that the central bank is serious about making an impact on carbon emissions and the environment through the financial system …

26 Apr 2021

CSRC chairman flags risks of ‘hot money’ to stability of domestic capital markets

Yi’s wide-ranging speech gives us good insight into what’s on the mind of stock market regulators – and there’s plenty to keep them occupied. Yi isn’t the first regulator to publicly express concern about the potentially destabilizing impact of hot money on China’s capital markets – on March 2, banking regulator Guo Shuqing warned that the aggressive stimulus policies undertaken by many developed countries were fueling asset bubbles that could spill over into China’s financial markets …

26 Apr 2021

CBIRC issues rules to improve management of bank liabilities

The new rules are consistent with other regulatory efforts to improve oversight of bank funding as part of a broader campaign to de-risk the financial system. Still, the new measures will not cause a big headache for most banks, although some smaller lenders that rely on regulatory workarounds to meet their funding needs might struggle in the short term …

26 Apr 2021

Reports say SAFE to expand QDLP outbound investment program to Guangdong province

Over the past few months, financial regulators have repeatedly said that they intend to pursue further two-way opening of China’s capital account this year. With so much foreign money flowing into the mainland bond market, Beijing sees a window of opportunity to cautiously open the outbound capital spigot …

26 Apr 2021

PBoC steps up anti-money laundering regulations with revisions to Know Your Customer rules

Members of the FATF are required to meet certain standards and obligations, and the 2019 report, which exposed serious shortcomings in China’s anti-money laundering regulatory framework and enforcement, was a wake-up call for China’s financial regulators to get their act together …

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