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 …
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’ …
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…
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…
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…
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…
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 …
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…
PBoC-linked report urges extension of transition period for compliance with new asset management rules
When the draft of the asset management regulations was first published in November 2017, it sent waves of trepidation through the industry. The sheer volume of WMPs held by banks meant that…
SAFE appoints veteran administrator as deputy director
On July 6, SAFE announced that it had appointed SAFE veteran Wang Chunying as its new deputy director. Wang is taking up a position vacated by …
Draft amendment of Criminal Law increases penalties for financial crime
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Ant Financial rebrands as “Ant Technology”
Ant Financial’s rebranding appears to be aimed at deflecting attention from its financial services operations and highlighting the company’s technology and non-financial operations in an attempt to ward off increased scrutiny from financial regulators. In the past two years, other major fintech firms have …
Update on unlisted banks’ compliance with CBIRC requirements for shareholder registration
China’s three-year campaign to rein in risks in the financial sector has been partly aimed at addressing lax oversight of smaller banks, particularly unlisted institutions. And regulators have been especially keen to stamp out illegal practices by bank shareholders after a string of scandals that exposed how they were…
CBIRC names and shames 38 shareholders for corporate governance violations
The naming and shaming of bad shareholders is just the latest effort by regulators to bring about much-needed improvements in the corporate governance of financial institutions and reduce risks in the financial system. The publication of this list immediately after Guo’s op-ed sends a clear message that …
Regulators issue final definition of standard credit assets for wealth management products
These latest regulations draw a line in the sand between standard and nonstandard assets that will help eliminate regulatory arbitrage in the asset management sector and prevent banks from investing in …
CSRC chairman urges cross-border regulatory cooperation
Yi’s claim that the Chinese side has never stood in the way of US regulators’ attempts to check the audits of Chinese companies has raised eyebrows as it differs substantially from US regulators’ claims that they have not been allowed to review necessary documents or question auditors about their internal practices. These discrepancies aside, it is clear from Yi’s comments that he is trying to offer some kind of…
State Council allows local governments to use SPBs to recapitalize banks
Employment has become the government’s key concern this year as economic growth has slumped and small businesses are the most important sector when it comes to job creation so keeping them afloat is a top priority. Although policymakers have for several years been working to …
Guo Shuqing urges financial institutions to improve corporate governance
As China continues to open up its financial sector to the world, there is an increasing need for domestic financial institutions to follow a rules-based system in order to win the trust not only of foreign investors but also domestic companies who do business with or invest in financial institutions. Policy makers are well aware that lack of trust, abuse of regulations, and insufficient punishment for transgressions can breed…
NPC Standing Committee reviews first draft of data security law
Data security is a global issue, and China is to some extent playing catchup. The digital economy is booming and China has big plans to drive sectors like artificial intelligence and Big Data, but there are growing concerns about…
CBIRC issues trial measures for evaluation of commercial banks’ financial services to MSEs
China’s financial regulators have been pushing inclusive finance for several years to try and overcome bottlenecks and obstacles that exclude low-income individuals, the rural population, and small companies from the conventional banking system and access to financial services. But they have not been satisfied with…