22 Jul 2020

PBoC releases details of regulatory sandbox pilot program in Shanghai

Chinese regulators recognize the efficiency that fintech can bring to the financial system, but they continue to err on the side of caution when it comes to implementing nascent technologies. Authorities will closely monitor these projects to satisfy …


21 Jul 2020

PBoC inks agreements with Didi Chuxing and Meituan-Dianping to test its digital currency

With millions of daily users, Didi Chuxing and Meituan-Dianping occupy central roles in China’s digital lifestyle ecosystem. Successful collaboration with these two consumer services behemoths would vastly …


21 Jul 2020

Regulators take over nine financial institutions linked to missing tycoon Xiao Jianhua

Financial regulators are currently feeling their oats. The CBIRC and the CSRC have become increasingly assertive, empowered, and willing to take relatively draconian measures to fulfill their …


20 Jul 2020

CBIRC vice chairman talks corporate governance for financial institutions

China Inc. has been badly bruised by a series of corporate scandals over the past few months, including accounting fraud at Luckin Coffee Inc. and gold fraud at Nasdaq-listed Wuhan Kingold Jewelry Inc., so it’s hardly surprising that …


20 Jul 2020

CSRC encourages mergers of brokerages and mutual fund houses

This move is financial Supply-Side Structural Reform (SSSR) in action. In 2016, the original SSSR program was used to great effect to consolidate various upstream industries. Policymakers have been discussing financial SSSR for a couple of years now, but with little indication as to how it would work …


20 Jul 2020

PBoC and CSRC announce plans to connect China’s bond markets

Following the rapid expansion of China’s bond markets over the past decade, this development is long overdue. Allowing all investors to trade all types of bonds will help improve …


20 Jul 2020

CBIRC finalizes measures to regulate internet lending

The measures mark another effort by financial regulators to manage risks in the fast growing fintech sector in China. However, formulating rules and regulations is a challenging task as …


17 Jul 2020

CSRC pledges crackdown on securities fraud

The CSRC’s statement is yet another signal from financial regulators that they are determined to tackle financial fraud and that this will be a key theme in the capital markets for …


17 Jul 2020

Supreme People’s Court issues guidelines for dealing with bond disputes

The SPC’s guidelines are a direct response to the rise in bond defaults and disputes in recent years and the lack of clear guidelines, responsibilities, and accountability for issuers, investors, and the courts. These shortcomings are throwing up significant obstacles to the resolution of disputes, often delaying agreements for …


16 Jul 2020

State Council to scrap restrictions on insurers’ equity investments, CBIRC eases investment cap

As of the end of May, China’s insurers collectively held nearly RMB 22 trillion in assets. As such, lifting of restrictions on equity investment for insurers is likely to …


15 Jul 2020

CBIRC signals return of shadow banking crackdown

This notice is a shot across the bow of the financial sector and a timely reminder from the CBIRC that the loosening of monetary policy to counter the impact of the COVID-19 pandemic on the economy is not …


14 Jul 2020

PBoC official gives details of RMB 1.5 trillion profit sacrifice demanded of financial institutions

The PBoC’s strategy to reduce the financial burdens on borrowers is largely in line with the “fee-slashing” approach that Chinese policymakers have adopted to combat the economic fallout of COVID-19. While Beijing’s ability to directly dictate terms to financial institutions gives the PBoC more flexibility in responding to economic …


14 Jul 2020

Regulators to set up working group to weed out financial fraud

This isn’t the first time the FSDC has vowed to take a “zero tolerance” policy toward fraud and financial crime – it’s been a phrase used frequently over the past few months, notably since the accounting scandal at Luckin Coffee Inc. broke at the beginning of April. But the latest meeting of the committee used unusually …


14 Jul 2020

CBIRC orders insurers to conduct internal reviews of credit insurance business to identify risks

The inspection campaign is a follow-up of measures issued in May aimed at mitigating potential systemic risks created by the significant growth in insurance companies’ …


13 Jul 2020

CBIRC warns of surge in nonperforming loans

Central regulators have been engaged in a slow-moving cleanup of the banking system since 2016. Now the pandemic is unwinding some of that progress by…


13 Jul 2020

CSRC and CBIRC allow foreign banks to run fund custody businesses

Under the phase one US-China trade agreement inked in January, China agreed to allow branches of US financial institutions to provide custodian services for funds by June 2020, as part of a wider opening of the financial sector. These draft measures should…


13 Jul 2020

PBoC eases interest rate burden for distressed banks

The cut to the financial stability relending facility came as the PBoC also reduced relending and rediscount lending rates. However, the 50 basis-point cut was double the size of the reduction in rates on the other facilities, which suggests…


13 Jul 2020

CSRC adds to funds’ risk management tools with introduction of side pocket accounts

As China’s financial markets mature, regulators are gradually introducing more sophisticated risk management tools for institutional investors and fund managers. While side pocket mechanisms can play an important role in risk management, they have also gained a bad reputation for a range of reasons including…


08 Jul 2020

Plan to issue securities licenses to commercial banks gets cool reception from finance veterans

The lukewarm response to the CSRC’s proposed pilot by finance veterans like Zhu and Fang is worth paying attention to, since industry leaders rarely disagree openly with regulators on matters of policy. Both Zhu and Fang expressed reservations about leveraging commercial banks to service the needs of …


08 Jul 2020

Veteran regulator Xiao Gang promotes capital market reform

The development of China’s capital markets is a key part of the government’s strategy to expand its influence in the global financial system. There are essentially two pillars to this strategy…


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