CBIRC Guidance on Regulating Non-Licensed Entities in Banking
CBIRC published guiding opinions on regulating non-licensed organizations in banking financial institutions. The term "banking financial institutions" in this guidance refers to financial institutions such as commercial banks and rural credit cooperatives established in the territory of the People's Republic of China as well as the state development banks and policy banks. The guidance became effective on the date of its issuance—that is, December 28, 2018.
The guidance consists of 13 articles, covering the basic principles, normative requirements, regulatory responsibilities, and transitional period requirements. Article 1 clarifies that the non-licensed institutions that regulate the banking financial institutions in different places should follow the basic principles and describes these principles. Articles 2 to 7 cover the definition and classification of off-site non-licensees, in accordance with the substance over form principle, according to different degrees of risk spillover and risk management needs. Articles 8 to 10 clarify that after the completion of the rectification, the local regulatory agency assumes the main supervisory responsibility of the licensee in a different place while the "legal person supervision agency" assumes the supervisory duties of the non-operating organization and the regulatory body to strengthen the supervision linkage. Articles 11 through 13 cover the regulatory requirements for the transition period.
The relevant regulatory requirements for banking financial institutions to establish non-operating institutions abroad are separately provided. Banking financial institutions shall regularly report the relevant situation of non-operating institutions in China to the legal person regulatory agency and the reporting frequency shall not be lower than once a year. The banking financial institutions shall, within three months from the date of issuance of this opinion, report the rectification plan of the non-licensed institutions in different places to the legal person supervision institution and complete the rectification within the transition period after approval. If there is any difficulty, the time limit for rectification may be appropriately postponed with the consent of the "legal person regulatory body."
Related Links (in Chinese)
Effective Date: December 28, 2018
Keywords: Asia Pacific, China, Banking, Guiding Opinion, Regulation of Non-licensed Institutions, Banking Financial Institutions, CBIRC
Previous Article
EC on Rules to Come into Effect in 2019 Under Capital Markets UnionRelated Articles
ECB Allows Temporary Relief in Leverage Ratio Amid COVID-19 Pandemic
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs Launch Survey on Templates for Product Disclosures Under SFDR
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB Finalizes Methodology to Assess CCR and A-CVA Risk of Banks
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA Provides Opinion on Definition of Credit Institution in CRR
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA Consults on Alignment of Daily Liquidity Report for Banks
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED Releases Scenarios for Second Round of Stress Tests on Banks
FED released hypothetical scenarios for a second round of stress tests for banks.
FED to Temporarily Revise FR Y-14 Reports to Conduct Stressed Analysis
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED Revises Information Collection Under Market Risk Capital Rule
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA Seeks Input on ESG Disclosure Practices of Banks
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.
