Featured Product

    CBRC on Capital Approach to Strengthen Supervision of Asset Companies

    December 29, 2017

    CBRC published a notice on the Administrative Measures to strengthen the capital supervision of financial asset management companies and to safeguard the stable operation of these asset companies. These measures enter into force on January 01, 2018. The measures have been formulated in accordance with the "Regulations of the People's Republic of China on Banking Supervision and Administration" and the "Regulations of the Financial Assets Management Companies."

    The notice covers general provisions and specifies that these measures shall apply to a group of assets companies and their affiliates. The key topics covered in this capital approach include capital adequacy ratio calculation and regulatory requirements, risk-weighted asset measurement, group minimum capital requirements measurement, group regulatory requirements for capital, supervision, information disclosure, and by-laws. CBRC has set up a capital regulatory framework for asset-backed companies and has explored the formation of a system of capital measurement and regulatory rules applicable to asset-backed companies. However, the existing regulatory requirements are relatively fragmented and not systematic enough. Therefore, it became necessary to formulate a capital management approach specifically for asset-backed companies. Emphasis is on the following five aspects:

    • First, the bank sets appropriate regulatory standards for capital adequacy in light of the characteristics of the business operations of asset-backed companies, clarifies the regulatory requirements for Pillar II and regulatory requirements for information disclosure, and strengthens the regulatory oversight and market restraint.
    • Second, by setting a differentiated asset risk-weight, asset companies are guided to focus on the main businesses of non-performing assets, in accordance with the principle of "relative concentration and highlighting the major businesses."
    • The third is to impose prudential supervision requirements on non-financial subsidiaries that are not regulated but have investment and financing functions and high leverage in the assets and corporate groups to ensure full coverage of capital controls.
    • The fourth is to leverage the regulatory indicators and requirements into the "capital approach" to form a unified capital regulatory framework.
    • Fifth, it requires the parent companies and related subsidiaries of the Group to include credit risk, market risk, and operational risk in the scope of capital measurement—and in combination with the actual selection of the appropriate risk measurement method by the asset company.

     

    Related Links (in Chinese)

    Effective Date: January 01, 2018

    Keywords: Asia Pacific, China, Securities, Asset Management Companies, Regulatory Capital, Disclosures, Proportionality, CBRC

    Featured Experts
    Related Articles
    News

    BCBS Consults on Principles for Operational Risk and Resilience

    BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.

    August 06, 2020 WebPage Regulatory News
    News

    FSI Note Discusses Challenges Associated with COVID Relief Measures

    The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.

    August 06, 2020 WebPage Regulatory News
    News

    HKMA Announces Repayment Deferment Under Payment Holiday Scheme

    HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.

    August 05, 2020 WebPage Regulatory News
    News

    ESRB Paper Presents Alternative Approach to EBA Stress Test Proposal

    The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.

    August 05, 2020 WebPage Regulatory News
    News

    MAS Announces Key Initiatives to Support Adoption of SORA

    MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.

    August 05, 2020 WebPage Regulatory News
    News

    BoE Updates Template and Definitions for Form ER

    BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.

    August 05, 2020 WebPage Regulatory News
    News

    PRA to Extend Temporary High Balance Coverage Amid COVID Crisis

    PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.

    August 04, 2020 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure and Reporting of MREL and TLAC

    EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.

    August 03, 2020 WebPage Regulatory News
    News

    EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10

    EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.

    August 03, 2020 WebPage Regulatory News
    News

    EC Sets Out Updated Technical Information for Solvency II Calculations

    EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.

    August 03, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5635