General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
October 19, 2018

CBIRC issued a consultation on the "Administrative Measures for Commercial Banking Financial Subsidiaries." The measures were drafted keeping in mind the "Guiding Opinions on Regulating Financial Asset Management Business of Financial Institutions" and the "Measures for the Supervision and Administration of Financial Banking Business of Commercial Banks." The proposed measures stipulate the regulatory requirements for financial management subsidiaries to conduct wealth management business. Here, a financial subsidiary is referred to as a non-bank financial institution engaged in wealth management business for commercial banks. The deadline for comments is November 18, 2018.

These measures cover establishment of a financial management subsidiary by a commercial bank to conduct the asset management business and are intended to strengthen the risk management of the wealth management business of banks. According to the CBIRC spokesperson, the timing for commercial banks to set up wealth management business through the establishment of financial management subsidiaries is mature, as there are now clear requirements in the “new regulations for asset management." Commercial banks can combine their strategic planning and their own conditions to establish a financial management business through the establishment of a financial management subsidiary, in accordance with the principle of "commercial voluntariness." Alternatively, they can choose not to establish a new financial management subsidiary, but integrate the wealth management business into the already developed asset management business. 

However, a commercial bank will no longer conduct the wealth management business (except for the continued disposal of the stock wealth management products). The financial subsidiaries should operate independently and assume their own profits and losses, effectively preventing business risks from being transmitted to the parent bank. The measures consist of the following sections:

  • The general rules section mainly contains definitions, basic principles, and regulatory arrangements of financial subsidiaries and wealth management business.
  • The section on establishment of changes and terminations mainly stipulates the organizational form, naming rules, and approval procedures.
  • The business rules section stipulates the business scope, sales management, investment operation, management of cooperative institutions, investment management of self-owned funds, product registration, and other related matters of financial subsidiaries.
  • The risk management section stipulates requirements related to corporate governance, business management system, risk isolation, related-party transactions, risk reserve, net capital, internal control audit, and investor protection mechanism.
  • The supervisory management section contains requirements for the implementation of off-site supervision, on-site inspection, information reporting, regulatory measures, and administrative penalties for financial subsidiaries, with the final section focusing on supplementary regulations.


Related Links (in Chinese)

Comment Due Date: November 18, 2018

Keywords: Asia Pacific, China, Banking, Asset Management, Wealth Management Products, Bank Subsidiaries, CBIRC

Related Insights

FSB Report Examines Financial Stability Implications of Fintech

FSB published a report that assesses fintech-related market developments and their potential implications for financial stability.

February 14, 2019 WebPage Regulatory News

US Agencies Amend Regulatory Capital Rule to Allow Phase-In for CECL

US Agencies (FDIC, FED, and OCC) adopted the final rule to address changes to credit loss accounting under the U.S. generally accepted accounting principles; this includes banking organizations’ implementation of the current expected credit losses (CECL) methodology.

February 14, 2019 WebPage Regulatory News

OCC Consults on Company-Run Stress Test Requirements for Banks

OCC proposed amendments to its company-run stress testing requirements for national banks and Federal savings associations, consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

February 12, 2019 WebPage Regulatory News

CFTC Extends Comment Periods for Trade Execution Requirement Proposals

CFTC announced that it is extending comment period for the proposed amendments related to the regulations on swap execution facilities (SEF) and trade execution requirement.

February 12, 2019 WebPage Regulatory News

OCC Proposes to Renew Information Collection Under Stress Test Rule

OCC is proposing to renew its information collection titled “Annual Stress Test Rule” (OMB Control No: 1557-0311). Comments must be received on or before March 13, 2019.

February 11, 2019 WebPage Regulatory News

OSFI Consults on NSFR Disclosure Requirements for D-SIBs

OSFI proposed the draft guideline on the net stable funding ratio (NSFR) disclosure requirements for domestic systemically important banks (D-SIBs).

February 11, 2019 WebPage Regulatory News

EC Amends Its Regulation to Clarify Impairment Requirements for IFRS 9

EC published the EU Regulation 2019/237 that amends Regulation (EC) No 1126/2008 adopting certain international accounting standards, in accordance with Regulation (EC) No 1606/2002 regarding International Accounting Standard (IAS) 28 on Investments in Associates and Joint Ventures.

February 11, 2019 WebPage Regulatory News

FSB Chair Randal Quarles Speaks About the Upcoming Work of FSB

While speaking at the BIS Special Governors Meeting in Hong Kong, Randal K. Quarles, the Chair of FSB and Vice Chair of FED, discussed his views on how the work of FSB must evolve and the key principles that, he believes, should inform that work.

February 10, 2019 WebPage Regulatory News

OSFI Proposes to Amend the Liquidity Adequacy Requirements for Banks

OSFI proposed revisions to the Liquidity Adequacy Requirements (LAR) Guideline for banks. OSFI published the proposed drafts (with proposed changes highlighted in yellow) of Chapters 1,2, 4, and 5 of the LAR guideline.

February 08, 2019 WebPage Regulatory News

HKMA Publishes FAQs on Local Implementation of IRRBB Framework

HKMA published the frequently asked questions (FAQs) related to the local implementation of the interest rate risk in the banking book (IRRBB).

February 08, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2593