CBIRC published a three-year action plan (2020-2022) to improve corporate governance in the banking and insurance sectors. The key topics covered in the action plan include general requirements with respect to governance (including guiding ideology, basic principles, overall objectives, and assessment), shareholder code of conduct, board of directors and other governance entities’ performance of duties, and regulatory capacity building. The plan proposes certain targeted improvements and includes the implementation timeline for these improvements. CBIRC also published a set of questions and answers (Q&A) on the three-year action plan.
In addition, Zhou Liang, a Member of the Party Committee and the Vice Chairman of CBIRC, elaborated on the progress achieved with respect to the governance of "joint-stock banks," the existing issues in governance, and the ways to improve corporate governance of joint-stock banks. The following are the key highlights of the three-year action plan on governance in the banking and insurance sectors:
- Clarify and strictly implement requirements for the integration of party leadership into corporate governance in 2020. CBIRC will continue to explore ways and paths for the organic integration of party leadership and corporate governance in 2021 and 2022.
- Ensure that initial comprehensive assessment of corporate governance of bancassurance institutions has achieved the required results in 2020. Next, in 2021, the focus will be on the application of assessment results and rectification of difficult issues while, in 2022, the focus will be on improving the evaluation system and mechanism.
- Rectify the problem in equity and related-party transactions while striving to improve the behavioral restraint mechanism of major shareholders in 2020. The focus, in 2021, will be on improving the protection mechanism for the rights and interests of small and medium shareholders and promoting the rectification of the stock issue of shareholders. In 2022, CBIRC will focus on further exploring and improving the shareholder governance mechanism of bancassurance institutions.
- Regulate the performance of duties of directors, supervisors, and senior executives in 2020. Then, in 2021, focus will be on improving the operating mechanism of the board of directors, supervisors, and senior management. In 2022, CBIRC will further promote the establishment and strict implementation of high standards of professional ethics and continue to optimize the working mechanism of each governance body.
- Implement performance appraisal and salary management regulations at bancassurance institutions in 2020. CBIRC will focus on improving the remuneration mechanism and internal auditing mechanism in 2021, in addition to further exploring diversified incentive and restraint methods in 2022.
- Improve regulatory disclosures. In 2021, CBIRC will focus on improving the regulatory requirements for information disclosure in the banking and insurance sectors. Additionally, in 2022, the focus will be on strengthening the daily supervision of the quality of information disclosure.
- Promote establishment of a corporate governance regulatory system and information system in 2020. Then, CBIRC will focus on improving the working mechanism of corporate governance supervision and exploring and improving differentiated supervision in 2021. Finally, in 2022, focus will be on strengthening domestic and international exchanges and cooperation and improving regulatory capabilities and standards.
Related Links (in Chinese)
Keywords: Asia Pacific, China, Banking, Insurance, Action Plan, ESG, Remuneration, Disclosures, Governance, CBIRC
Previous ArticleBank of Finland Issues Updates on AnaCredit Reporting
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.
The Australian Prudential Regulation Authority (APRA) updated the list of authorized deposit-taking institutions, granting license to Barclays Bank PLC and Crédit Agricole Corporate and Investment Bank to operate as foreign authorized deposit-taking institutions under the Banking Act 1959.
EU published, in the Official Journal of the European Union, a corrigendum to the Delegated Regulation 2015/35, which supplements Solvency II Directive (2009/138/EC).
The European Banking Authority (EBA) published an Opinion on the scale and impact of de-risking in European Union and the steps that competent authorities should take to tackle unwarranted de-risking.