CBIRC Issues Rules on Related-Party Transactions and Outsourcing Risks
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules on related-party transactions and outsourcing risks while its Consumer Rights Protection Bureau set out the first issue of risk warnings in 2022, reminding consumers to pay attention to prevent "routine" behaviors that violate financial consumers' right to know, independent choice, fair trade, and property security. CBIRC formulated the rules on related-party transactions of banking and insurance institutions, which shall be effective from March 01, 2022. The regulator has published questions and answers related to the rules and plans to issue shortly a notice clarifying the transitional arrangements for implementation of these rules. Also published are the measures, or rules, on supervision of information technology outsourcing risks of banking and insurance institutions, along with a set of questions and answers on the measures; the measures shall come into force as of the date of promulgation.
The key provisions of the measures on information technology outsourcing relate to outsourcing governance, outsourcing access, monitoring, evaluation, and risk management associated with outsourcing. The measures set out
- banking and insurance institutions should establish an information technology outsourcing management system that is compatible with their own information technology strategic goals, incorporate information technology outsourcing risks into a comprehensive risk management system, and effectively control risks arising from outsourcing.
- requirements on the organization and responsibilities of banking and insurance institutions, outsourcing strategies, outsourcing prohibitions, service provider management strategies, outsourcing classification, outsourcing hierarchical management, and exit strategies in the governance of information technology outsourcing.
- regulatory requirements for the access of information technology outsourcing and put forward additional requirements for off-site centralized outsourcing, cross-border outsourcing, inter-bank and related outsourcing.
- put forward requirements for outsourcing risk identification and assessment, business continuity management, information security management, concentration risk management, off-site outsourcing on-site inspection, annual risk assessment, and audit.
- provisions on the implementation of outsourcing supervision and management by regulatory agencies, including pre-reporting requirements, major event reporting, regulatory assessment and supervision and inspection, risk monitoring, regulatory intervention, on-site inspection, and regulatory accountability.
Related Links (in Chinese/English)
- Press Release on Related-Party Transactions
- Rules on Related-Party Transactions
- Q&A on Rules on Related-Party Transactions
- Press Release on Outsourcing Risk
- Measures on Outsourcing Risk
- Q&A on Outsourcing Measures
- Press Release on Risk Warning for 2022
Keywords: Asia Pacific, China, Banking, Insurance, Related Party Transactions, Reporting, Disclosures, Outsourcing Risk, Regtech, Cloud Service Providers, Operational Risk, Operational Resilience, CBIRC
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