PBC Issues Draft Rules for Verification of Standard Debt-Based Assets
PBC launched a consultation on the rules for verification of standard debt-based assets. The proposed rules clarify and list the standard and non-standard debt-based assets, in addition to providing the verification criteria and the related regulatory arrangements. To standardize financial institutions’ investment in asset management products, strengthen investor protection, promote sound development of direct financing, and prevent financial risks effectively, the draft rules have been formulated in accordance with the Guidelines of PBC, CBIRC, CSRC, and State Administration of Foreign Exchange on Regulating Asset Management by Financial Institutions. The deadline for comments is November 10, 2019. The rules shall take effect on the day of their official release. PBC also released questions and answers (Q&As) related to the draft rules.
Under the rules, standard debt-based assets refer to bonds, asset-backed securities, and other fixed-income securities, which are issued according to the relevant regulations. Other fixed-income securities include treasury bonds, central bank bills, local government bonds, financial bonds, debt-financing instruments for non-financial enterprises, bonds issued by international institutions, interbank certificates of deposit, credit asset-backed securities, asset-backed bills, and asset-backed securities listed for trading on stock exchanges. The rules further specify that to be recognized as standard debt-based assets, other debt-based assets are required to meet requirements related to the following:
- Equal division and tradability
- Information disclosure
- Centralized registration and independent custody
- Fair-value pricing and sound liquidity mechanism
- Trading of assets on markets approved by the State Council
Comment Due Date: November 10, 2019
Keywords: Asia Pacific, China, Banking, Securities, Asset-backed Securities, Debt-based Securities, Asset Management, PBC
Previous Article
PRA Consults on Treatment of Restricted Tier 1 Own Funds InstrumentsRelated Articles
PRA and FPC Finalize Changes to Leverage Ratio Framework in UK
The Prudential Regulation Authority (PRA) published the final policy statement PS21/21 on the leverage ratio framework in the UK. PS21/21, which sets out the final policy of both the Financial Policy Committee (FPC) and PRA
CFPB Proposes Rule on Small Business Lending Data Collection
The Consumer Financial Protection Bureau (CFPB) proposed to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act.
PRA Decides to Maintain O-SII Buffers for Another Year
The Prudential Regulation Authority (PRA) decided to maintain, at the 2019 levels, the buffer rates for the Other Systemically Important Institutions (O-SII) for another year, with no new rates to be set until December 2023.
FSB Report Assesses Implementation of Recommendations on Stablecoins
The Financial Stability Board (FSB) published a progress report on implementation of its high-level recommendations for the regulation, supervision, and oversight of global stablecoin arrangements.
APRA Updates Loan Serviceability Expectations for Home Lending
In a letter to the authorized deposit taking institutions, the Australian Prudential Regulation Authority (APRA) announced an increase in the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.
CPMI and IOSCO Consult on Guidance on Stablecoin Arrangements
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) are consulting on the preliminary guidance that clarifies that stablecoin arrangements should observe international standards for payment, clearing, and settlement systems.
EBA and EIOPA Set Out Work Priorities for 2022
The European Banking Authority (EBA) and the European Insurance and Occupational Pensions Authority (EIOPA) have set out their respective work priorities for 2022.
MFSA Issues Reporting Updates and Guidance for Banks
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0, in addition to the reporting module on leverage under the common reporting (COREP) framework.
EC Publishes Decision on List of Equivalent Third Countries Under CRR
The European Commission (EC) published the Implementing Decision 2021/1753 on the equivalence of supervisory and regulatory requirements of certain third countries and territories for the purposes of the treatment of exposures, in accordance with the Capital Requirements Regulation or CRR (575/2013).
EC Rule on Contractual Recognition of Write-Down and Conversion Powers
EC published the Implementing Regulation 2021/1751, which lays down implementing technical standards on uniform formats and templates for notification of determination of the impracticability of including contractual recognition of write-down and conversion powers.
