Featured Product

    IMF Publishes Technical Notes on FMIs and AML/CFT in China Under FSAP

    June 26, 2018

    IMF published two technical notes on China as part of the Financial Sector Assessment Program (FSAP). One technical note addresses systemic oversight of financial market infrastructures (FMIs) while the other note assesses the anti-money laundering and combating the financing of terrorism (AML/CFT) framework in the country.

    Technical note on FMIs. China’s landscape for Financial Market Infrastructures (FMIs) is one of the largest and most complex in the world. It consists of a range of payment, clearing and settlement systems, including several interbank payment systems, securities settlement systems and central counterparties (CCPs). FMIs in China have been analyzed from a supervision, oversight, and systemic risk management perspective.Since the previous FSAP, the supervision and oversight of FMIs has strengthened through the adoption of the CPSS-IOSCO Principles for FMIs (PFMI); the full implementation of the PFMI is the next step. The mission found weaknesses in the legal framework for FMIs regarding finality and netting of transactions, which potentially expose FMIs and their participants to significant credit and liquidity risks. Cyber risk has been identified by authorities as an important supervisory topic in relation to FMIs. The mission also recommends that China should develop recovery and resolution planning in line with international guidance. Finally, resilience of FMIs can be strengthened through the provision of central bank services to all solvent, systemically important FMIs.

    Technical note on AML/CFT. This technical note sets out the findings and recommendations made in the FSAP for China in the area of anti-money laundering and combating the financing of terrorism (AML/CFT). It summarizes the findings of a targeted review of the progress of China in addressing vulnerabilities with respect to the anti-corruption framework as it relates to money laundering and the supervision of financial institutions, with a focus on the banking sector. The People’s Bank of China (PBC) has taken a number of measures to strengthen its supervisory arrangements. A significant development is the initial implementation of a risk-based approach to supervision by requiring institutions to undertake self-assessments and by developing its own internal methodology for prioritizing institutions for supervisory oversight. However, there is room to strengthen the existing arrangements. In developing its supervisory priorities, PBC should increase its focus on group-wide risk. PBC and the sector supervisors should strengthen their cooperation to ensure the effectiveness of overall supervisory activities. PBC is also encouraged to expedite the roll out of its internal risk assessment mechanisms to banks across the country. Finally, the authorities should strengthen the sanctions that can be imposed on financial institutions for breaches of the Anti-Money Laundering Law 2007 to make them more dissuasive, especially for the large banking institutions.

     

    Related Links

    Keywords: Asia Pacific, China, PMI, Banking, FSAP, FMI, AML/CFT, IMF

    Related Articles
    News

    FASB Proposes Taxonomy Changes Related to Topics 848 and 470

    FASB proposed taxonomy improvements for the proposed Accounting Standards Update on topic 848 on facilitation of effects of reference rate reform on financial reporting.

    September 16, 2019 WebPage Regulatory News
    News

    BoE Statement on Recalculating Transitional Measures Under Solvency II

    BoE notified that it will be willing to accept applications from firms to recalculate transitional measure on technical provisions (TMTP) as at September 30, 2019.

    September 16, 2019 WebPage Regulatory News
    News

    BoE Paper on Market-Implied Systemic Risk and Shadow Capital Adequacy

    BoE published a working paper that presents a forward-looking approach to measure systemic solvency risk.

    September 13, 2019 WebPage Regulatory News
    News

    HKMA Consults on Policy Module on Pillar 2 Supervisory Review Process

    HKMA is consulting on the revised Supervisory Policy Manual module CA-G-5 that sets out the HKMA approach to conducting the supervisory review process under Pillar 2.

    September 13, 2019 WebPage Regulatory News
    News

    PRA Publishes Waiver by Consent of Continuity of Access Rules

    PRA published a new waiver by consent to waive the Continuity of Access requirements contained in the Depositor Protection Part of the PRA Rulebook (DPP).

    September 13, 2019 WebPage Regulatory News
    News

    EBA Single Rulebook Q&A: Second Update for September 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to three questions.

    September 13, 2019 WebPage Regulatory News
    News

    PRA Revises Branch Return and Updates Guidance for Regulatory Reports

    PRA published the policy statement PS17/19, which contains the final policy related to changes in the format and content of the Branch Return Form and reporting guidance.

    September 12, 2019 WebPage Regulatory News
    News

    ISDA Guide on Collateral Management Under Smart Derivatives Contracts

    ISDA published the third in a series of legal guidelines for smart derivatives contracts.

    September 12, 2019 WebPage Regulatory News
    News

    ESA Report Highlights Risks of No-Deal Brexit in EU Financial System

    ESAs published a Joint Committee report on risks and vulnerabilities in the EU financial system.

    September 12, 2019 WebPage Regulatory News
    News

    ECB Modifies New Targeted Longer-Term Refinancing Operations

    The Governing Council of ECB decided to modify some of the key parameters of the third series of targeted longer-term refinancing operations (TLTRO III) to preserve favorable bank lending conditions (Decision (EU) 2019/1558).

    September 12, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3819