CBIRC published draft rules on the net capital of wealth management subsidiaries of commercial banks. According to the draft rules, the net capital management of financial subsidiaries should meet two criteria. The first criterion specifies that net capital should not be less than CNY 500 million and should not be less than 40% of the net assets. The second criterion states that net capital should not be lower than the venture capital to ensure that financial subsidiaries maintain adequate net capital levels. The deadline for comments is October 27, 2019.
The draft rules consists of four chapters and 20 articles. The chapters cover general rules, net capital supervision standards, supervision and management, and supplementary rules. The board of directors of the financial subsidiaries shall bear the ultimate responsibility for the company's net capital management and the senior management shall be responsible for organizing the implementation of net capital management. The wealth management subsidiary shall regularly submit the net capital supervision report and be responsible for the authenticity, accuracy, and completeness of the relevant statements. Also, the subsidiary shall timely report major changes in relevant regulatory indicators and disclose net capital management in the annual report. For financial subsidiaries that do not meet the requirements of net capital management, CBIRC may adopt relevant regulatory measures in accordance with laws and regulations.
Related Links (in Chinese)
Comment Due Date: October 27, 2019
Keywords: Asia Pacific, China, Banking, Securities, Wealth Management Subsidiary, Governance, Regulatory Capital, CBIRC
Previous ArticleBOE Article Explains Process for Bank Authorization in UK
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting