Hot Reading of New Financial Regulations (November Issue)

1. Overview of the new financial regulations in November

1. New specification and content:

In November, the State Council, the People's Bank of China, the State Administration of Financial Regulation, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, the China Banking Association, the China Securities Association, the AMAC, the Cyberfinance Commission and other regulatory agencies, industry self-regulatory organizations and exchanges issued a total of 32 important new regulations, including 27 formal documents and 5 draft drafts, covering securities and futures business, fund business, green finance, Internet finance, as well as country risk management, case prevention management, capital management and other fields.

2. Important content and images:

• Regulatory reform: With the implementation of the "three determinations" plan of the State Administration of Financial Supervision and the China Securities Regulatory Commission, the new financial regulatory framework of "one committee, one bank, one bureau and one meeting" has been officially finalized
• Commercial banks: Three major new regulations on the banking industry, including the Measures for the Management of Capital of Commercial Banks, the Measures for the Management of Risk Prevention and Control of Criminal Cases of Banking and Insurance Institutions, and the Measures for the Country-specific Risk Management of Banking Financial Institutions, have been released
• Capital market: The China Securities Regulatory Commission, the China Securities Association, and the stock exchange continued to intensively issue new regulations in November, involving the standardization of the securities and futures industry, IPOs, securities trading, and the construction of infrastructure facilities
• Green Finance: The National Development and Reform Commission (NDRC) and the China Municipal Association (CAA) have issued the National Carbon Peak Pilot Construction Plan, the Opinions on Accelerating the Establishment of a Product Carbon Footprint Management System, and the Guidelines for Information Disclosure on the Duration of Green Bonds

3. Key changes and trends:

• "Promoting development and preventing risks": Following the spirit of the recent important financial conferences, the new regulations in November on the one hand promote the cooperation between the private economy, the government and the private sector, as well as provide financial support around the "five major articles", and on the other hand, update and optimize various risk management requirements
• Steadily and rapidly promoting standardization: The China Securities Regulatory Commission (CSRC) and the National Standards Commission jointly issued the Guiding Opinions on Strengthening the Standardization of the Securities and Futures Industry, and the Cyberfinance Commission issued nine standards, including the Guidelines for the Management of Financial Data Assets, showing a regulatory trend of promoting and guiding the standardized development of business with standards
• The capital market continues to promote reform: Focusing on the four important tasks of the capital market, including "promoting the deepening and solidification of the stock issuance registration system, improving the multi-level capital market system, vigorously improving the quality of listed companies, and promoting the high-level institutional opening up of the capital market", new regulations have been issued intensively

2. Important financial work conference in November and key points

In November, a number of important financial-related work conferences were held, which comprehensively reflected the main policy line and regulatory expectations of "promoting development, preventing risks, and emphasizing practical results".

3. Speed reading of key new regulations

Provisions on the Allocation of Functions, Internal Institutions and Staffing of the State Administration of Financial Supervision and Regulations on the Allocation of Functions, Internal Institutions and Staffing of the China Securities Regulatory Commission (Office of the Central Establishment Commission)

Keywords: functional adjustment, institutional setting, staffing

On November 10, 2023, the State Administration of Financial Supervision and the China Securities Regulatory Commission (CSRC) released the "Three Determinations" plan, and the new financial regulatory framework of "one committee, one bank, one bureau and one meeting" was officially implemented.

State Administration of Financial Regulation: The People's Bank of China (PBOC) has newly assigned its day-to-day supervision responsibilities over financial holding companies and other financial groups, its responsibilities for financial consumer protection, and the CSRC's responsibilities for investor protection. Six new departments and bureaus, including the Department of Supervision of Asset Management Institutions, the Department of Science and Technology Supervision, the Department of Financial Institution Access, the Department of Institutional Recovery and Disposal, the Administrative Punishment Bureau, and the Inspection Bureau, were newly established, and the Department of Trust Supervision, the Department of Innovative Business Supervision, and the Department of Insurance Intermediary Supervision were abolished/merged.

China Securities Regulatory Commission: Newly assigned to the National Development and Reform Commission (NDRC) to review the issuance of corporate (corporate) bonds by non-listed companies. After the adjustment, the CSRC has set up 19 director-level institutions. The Integrated Operations Division was established, the Information Centre and the Investor Protection Department were abolished.

This adjustment breaks through the institutional boundary, incorporates all financial activities of various financial institutions, quasi-financial institutions and non-financial institutions into financial supervision, and comprehensively strengthens the "five major supervisions" such as institutional supervision, behavior supervision, functional supervision, penetrating supervision, and continuous supervision. At the same time, it has strengthened the internal governance of financial supervision and auditing functions.

Measures for the Management of Capital of Commercial Banks (State Administration of Financial Regulation)

Keywords: capital management

The main contents of the revised Measures for the Capital Management of Commercial Banks include: building a differentiated capital supervision system, comprehensively revising the rules for measuring risk-weighted assets, requiring commercial banks to formulate effective policies, procedures, systems and measures, strengthening supervision and inspection, and raising information disclosure standards. The aim is to leverage assets through capital, guide commercial banks to optimize and adjust their asset structure, and implement differentiated capital supervision without lowering capital requirements.

Measures for the Administration of Risk Prevention and Control of Criminal Cases Involving Banking and Insurance Institutions (State Administration of Financial Regulation)

Keywords: criminal cases, risk prevention and control

It emphasized the principle of "prevention first, moving the gate forward, comprehensive coverage, highlighting the key points, legal person taking the main responsibility, hierarchical responsibility, joint prevention and control, each performing its own duties, territorial supervision, and integration into daily life". Highlight the main responsibilities of legal persons, and clarify the responsibilities and tasks of the board of directors, board of supervisors, senior management, etc., in the prevention and control of risks in criminal cases. It clarifies the main tasks of banking and insurance institutions in terms of key systems, key areas, key measures, informatization construction and case prevention assessment.

Guiding Opinions on Strengthening the Standardization of the Securities and Futures Industry (CSRC, National Standards Committee)

Keywords: securities and futures industry, industry standards

The "Guiding Opinions" put forward six main tasks, including: promoting the deep integration of business and standardization, cultivating the awareness of standardization work of industry subjects, strengthening the supply of standards in key areas, improving the standardization work system, strengthening the implementation of standards, and strengthening the training of standardization talents. The "Guiding Opinions" make comprehensive arrangements for the standardization development of the securities and futures industry, and are important guiding documents for the long-term standardization, scientific and sustainable development of the capital market standardization work.

Measures for the Country-specific Risk Management of Banking Financial Institutions (State Administration of Financial Regulation)

Keywords: country risk, risk management

After 13 years, the State Administration of Financial Supervision revised the old version of the "Country-specific Risk Management Guidelines for Banking Financial Institutions" and upgraded it to the "Measures". The Measures further improve the provisions on the measurement of country-specific risk exposure, the division of country-specific risk management responsibilities, the country-specific risk transfer standard, the identification of country-specific risk levels, and the provision of country-specific risk provisions, so as to adapt to the characteristics of the new era in which Chinese-funded commercial banks are "going global" and the degree of globalization continues to increase.

Interim Measures for the Supervision and Grading of Trust Companies (State Administration of Financial Regulation)

Keywords: trust companies, regulatory ratings, hierarchical and categorical supervision

In order to strengthen the differentiated supervision of trust companies and reflect the new regulatory standards and guidance in the regulatory rating, the Measures mainly clarify the elements and methods of regulatory rating, the implementation process of rating organizations, the elements and methods of systemic impact assessment, and the principles and measures of classified supervision. In the future, the rating results and systematic assessment results of trust companies will affect their market access, business scope, regulatory standards, and regulatory resource allocation.