Featured Product

    PBC, CBIRC, and CSRC Issue Guidance to Improve Supervision of SIFIs

    November 27, 2018

    PBC, CBIRC, and CSRC jointly issued the "Guiding Opinions on Improving the Supervision of Systemically Important Financial Institutions (SIFIs)." The guidance clarifies the definition and scope of SIFIs, stipulates the annual evaluation process for identification of SIFIs, and sets out additional regulatory requirements for SIFIs. PBC, CBIRC, and CSRC also published questions and answers (Q&A) on the guidance.

    Financial institutions that are deemed to be systemically important shall conduct relevant business activities in compliance with the regulations in the guiding opinions and relevant implementation rules. The guidance improves the supervision of SIFIs by:

    • Setting special regulatory requirements for SIFIs to enhance their ability to continue operations and reduce the possibility of major risks. Relevant departments have adopted the corresponding prudential supervision measures to ensure that SIFIs take risks and avoid blind expansion.
    • Establishing a special "disposal" mechanism for SIFIs, promoting the formulation of recovery and "disposal" plans, conducting disposition assessments, and ensuring that SIFIs can be safely, quickly, and effectively "disposed of" when they have significant risks.

    The guidance also stipulates that SIFIs need to develop a recovery plan, update it annually, and submit it to the crisis management team for review and implementation. The recovery plan is designed to ensure that financial institutions are able to resume normal operations by taking relevant measures under extreme stress scenarios. Recovery plans include, but are not limited to, agency overviews, governance structures for implementing recovery plans, key functions and core business identification, design and analysis of stress scenarios, recovery measures trigger conditions, implementation options, feasibility analysis, implementation barriers, and improvement recommendations. Moreover, the crisis management team will work with SIFIs to develop a disposal plan and update it on an annual basis. Additionally, PBC, along with CBIRC and CSRC, will regularly conduct stress tests on SIFIs and, based on the results of stress tests, impose additional regulatory requirements or take appropriate regulatory measures on SIFIs.

    Keywords: Asia Pacific, China, Banking, Insurance, Securities, SIFI, Systemic Risk, Guidance, Recovery and Resolution, Stress Testing, CBIRC, CSRC, PBC

    Featured Experts
    Related Articles
    News

    PRA Revises Branch Return and Updates Guidance for Regulatory Reports

    PRA published the policy statement PS17/19, which contains the final policy related to changes in the format and content of the Branch Return Form and reporting guidance.

    September 12, 2019 WebPage Regulatory News
    News

    FINMA Outlines Treatment of Stablecoins in Supplement to Guide on ICO

    FINMA published a supplement to its initial coin offerings (ICOs) guidelines, outlining the treatment for stablecoins under the Swiss supervisory law.

    September 11, 2019 WebPage Regulatory News
    News

    Ursula von der Leyen Presents Structure of Next European Commission

    President-elect Ursula von der Leyen has presented her team and the new structure of the next European Commission.

    September 10, 2019 WebPage Regulatory News
    News

    FED Proposes to Revise and Extend Reporting Form on Systemic Risk

    FED proposed to extend for three years, with revision, the Banking Organization Systemic Risk Report (FR Y-15; OMB No. 7100-0352).

    September 10, 2019 WebPage Regulatory News
    News

    EBA Issues Revised List of Validation Rules for Reporting

    EBA published the revised list of validation rules (version 2.9) in its implementing technical standards on supervisory reporting.

    September 10, 2019 WebPage Regulatory News
    News

    Bundesbank Publishes Supplementary Validation Rules for Reporting

    Bundesbank published the updated document containing supplementary validation rules in the context of the implementation of the reporting system at national level.

    September 10, 2019 WebPage Regulatory News
    News

    APRA Licenses Xinja Bank as Authorized Deposit-Taking Institution

    APRA granted Xinja Bank Limited a license to operate as an authorized deposit-taking institution without restrictions, under the Banking Act 1959.

    September 09, 2019 WebPage Regulatory News
    News

    FDIC Proposes Revisions to Regulations on Interest Rate Restrictions

    FDIC proposed revisions to its regulations covering interest rate restrictions that apply to less than well-capitalized insured depository institutions.

    September 09, 2019 WebPage Regulatory News
    News

    EBA Intends to Clarify End-Treatment of Grandfathered Instruments

    EBA announced its intention to clarify the prudential treatment applicable to own funds instruments at the end of the grandfathering period, which expires on December 31, 2021.

    September 09, 2019 WebPage Regulatory News
    News

    IMF Releases Reports on 2019 Article IV Consultation with Saudi Arabia

    IMF published its staff report and selected issues report in context of the 2019 Article IV consultation with Saudi Arabia.

    September 09, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 3799