CBIRC Finalizes Measures for Financial Management Services of Banks
CBIRC published final measures for the supervision and administration of financial management business of commercial banks. The publication of these final measures followed a consultation, the comment period for which ended on August 19, 2018. These measures become effective from the date of promulgation—that is, September 26, 2018.
These measures are consistent with the regulations on asset management, which were issued on April 27, 2018, and are positioned to regulate non-guaranteed wealth management products of banks. The measures focus on the following key factors:
- Strictly distinguishing between public and private wealth management products
- Strengthening the appropriate management of investors
- Standardizing product operations and implementing net worth management
- Standardizing the operation of fund pools to prevent “shadow banking” risks
- Removing channels and strengthening penetration management
- Limiting and controlling concentration risk
- Strengthening liquidity risk management and control and controlling leverage level
- Strengthening management of financial investment cooperation institutions, strengthening information disclosure, and protecting the legitimate rights and interests of investors
- Implementing centralized product registration and strengthen the management of financial products’ compliance
The transition period requirements of the measures are consistent with those of the “New Regulations for Asset Management” and the transition period runs from the implementation of the measures to December 31, 2020. During the transition period, the newly issued wealth management products of commercial banks shall comply with the provisions of these measures; for stock wealth management products, commercial banks may issue unexpired assets invested by old products in connection with stock wealth management products, but shall strictly control the overall scale of the stock products. After the end of the transition period, commercial bank wealth management products shall be fully regulated and managed in accordance with these measures and the “Guidance Opinions,” except for cases where the factor company has not been established and cannot meet the requirements for independent third-party custody; commercial banks may not re-issue or remain inconsistent with the guidance.
Related Links (in Chinese)
Effective Date: September 26, 2018
Keywords: Asia Pacific, China, Banking, Wealth Management Products, Asset Management, CBIRC
Related Articles
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
FSB Sets Out Work Priorities for 2021
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU Publishes Corrigendum to Revised Capital Requirements Regulation
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs Issue Statement on Application of Sustainability Disclosures Rule
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC Consults on Crisis Management and Deposit Insurance Frameworks
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Addresses Banks in Scope of First Resolvability Assessment
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.
