CFIC Introduction
In order to thoroughly implement the spirit of the Central Financial Work Conference, effectively prevent and resolve the risks of enterprise group finance companies (hereinafter referred to as finance companies), further promote financial companies to adhere to their main responsibilities and main businesses, conscientiously implement national macro policies, adhere to differentiation, specialization and professional development, play a necessary and beneficial supplementary role in serving social and economic development, and enhance the sustainability of financial support for the real economy, the State Administration of Financial Supervision has formulated and issued the "On Promoting the Standardized and Healthy Development of Enterprise Group Financial Companies". The Guiding Opinions on Improving the Quality and Effectiveness of Supervision (hereinafter referred to as the "Guiding Opinions") shall come into force on the date of issuance.
The Guiding Opinions are divided into 5 parts and 20 articles. The first part puts forward the guiding ideology, basic principles and development goals of the standardized and healthy development of the financial company industry. The basic principles mainly include adhering to functional positioning, deepening reform, differentiated development, and bottom-line thinking. The second part, "Sticking to the Characteristic Functional Positioning", aims to guide financial companies to adhere to the functional positioning of "relying on the group and serving the group", give full play to the advantages of being close to the industry, continue to increase support for key national areas, and continuously improve the quality and efficiency of serving the real economy. The third part, "Deepening the Reform of Corporate Governance Mechanism", clarifies the requirements for the leadership of the Party, shareholder equity management, and the construction of corporate governance mechanism. The fourth part, "Strengthening Risk Prevention and Control in Key Areas", requires financial companies to prevent and control credit risks, pay close attention to liquidity risks, focus on external business risks, resolve stock risks in a solid and orderly manner, and strengthen information technology risk management. The fifth part, "Improving the Regulatory Effectiveness of Financial Companies", proposes to strictly control the entry gates, comprehensively strengthen daily supervision, resolve stock risks in a solid and orderly manner, increase the intensity of supervision and investigation, and strengthen the coordination and linkage of supervision, aiming to clarify and strengthen the regulatory requirements of modern financial companies and promote the high-quality development of the financial company industry.
The issuance and implementation of the "Guiding Opinions" is an important measure to implement the CPC Central Committee and the State Council on strengthening financial supervision, preventing and controlling financial risks, and adhering to the positioning of institutions.
Source: State Administration of Financial Supervision and Administration
Issued by the State Administration of Financial Supervision and Administration
Guiding Opinions on Promoting the Standardized and Healthy Development of Financial Companies of Enterprise Groups and Improving the Quality and Efficiency of Supervision
Jin Gui [2024] No. 7
EAAs:
In order to thoroughly implement the spirit of the Central Financial Work Conference, effectively prevent and resolve the risks of enterprise group finance companies (hereinafter referred to as finance companies), further promote financial companies to adhere to their main responsibilities and main businesses, conscientiously implement national macro policies, adhere to differentiated, specialized, and professional development, play a necessary and beneficial complementary role in serving social and economic development, and enhance the sustainability of financial support for the real economy, the following opinions are hereby put forward:
1. General requirements
(1) Guiding ideology
Adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China and the spirit of the Central Financial Work Conference, adhere to the centralized and unified leadership of the Party Central Committee over financial work, practice the political and people's nature of financial work, implement the new development concept, adhere to the financial services for the real economy as the fundamental purpose, adhere to goal-oriented and problem-oriented, summarize the causes of risks in the financial company industry, make up for regulatory shortcomings, and strengthen the major strategy, High-quality financial services in key areas, and comprehensively promote the construction of a financial power with high-quality financial development.
(2) Basic principles
Stick to functional positioning. Adhere to the functional positioning of "relying on the group and serving the group", and take serving the real economy as the fundamental purpose.
Persist in deepening reform. We will further promote the reform of the corporate governance mechanism and the structural reform of the financial supply side, and solidly promote the high-quality development of the financial company industry.
Insist on differential development. Guide financial companies to provide professional and differentiated financial support for enterprise groups, and form a good situation of complementary advantages and differentiated services with banking and insurance institutions.
Stick to bottom-line thinking. Promote the risk resolution and disposal of financial companies in an orderly manner, resolutely punish major violations of laws and regulations, strictly enforce market discipline, maintain social stability, and maintain the bottom line of no systemic financial risks.
2. Adhere to the characteristic functional positioning
(3) Adhere to the attributes of internal financial services. Finance companies should stick to their main responsibilities and main business, provide financial services closely around the main business of the enterprise group, strengthen the centralized management of the enterprise group's funds, improve the efficiency of capital use, reduce the overall operating costs, and effectively improve the quality of financial services. It should not become a profit-making center for an enterprise group, and excessive financing in the interbank market should be strictly prohibited, so as to prevent alienation from becoming a channel and tool for external financing of an enterprise group.
(4) Adhere to the management attributes of auxiliary enterprise groups. Financial companies should take the initiative to strengthen the centralized management of funds, improve the function of fund payment and settlement services, strengthen the monitoring of funds and bills in the accounts of member units, provide professional services in the investment and financing management and capital operation of enterprise groups, and help enterprise groups accelerate the construction of treasury systems; It is necessary to strictly abide by the regulatory regulations on business dealings with listed companies within the enterprise group, strictly enforce the "Regulations on Guaranteeing the Payment of Funds to Small and Medium-sized Enterprises", and shall not assist the enterprise group in defaulting on its accounts through bill business.
(5) Strengthen financial services in key areas. Finance companies should closely follow the national strategic guidance, give full play to the advantages of being close to industry, and increase support for advanced manufacturing, scientific and technological innovation, green and low-carbon development, equipment renewal, and trade-in of consumer goods within the enterprise group. Actively implement the state's inclusive financial policy on supporting small, medium and micro enterprises, continue to increase agriculture-related financial services, and give preference to credit resource allocation and performance appraisal.
3. Deepen the reform of corporate governance mechanism
(6) Adhere to the guidance of party building. State-owned financial companies should write the requirements for party building work into the company's articles of association, implement the legal status of party organizations in the corporate governance structure, adhere to and improve the leadership system of "two-way entry and cross-posting", integrate the party's leadership into all aspects of corporate governance, and give full play to the role of party committees in guiding the direction, managing the overall situation, and ensuring implementation. Private financial companies shall establish Party organizations in accordance with the law, strengthen political guidance, build an advanced corporate culture, and promote sustainable and healthy development.
(7) Strengthen shareholder equity management. Enterprise groups should correctly understand the functional positioning of financial companies, maintain the status of financial companies as independent legal persons, and establish a scientific business evaluation mechanism. It is strictly forbidden for enterprise groups to abuse shareholder rights, interfere in the operation and management of financial companies beyond their authority, misappropriate funds of financial companies in violation of regulations, manipulate financial companies to pursue short-term interests, carry out improper financing in violation of regulations, entrust or indirectly entrust others to hold or manage the equity of financial companies, pledge equity or establish trusts in violation of regulations, and so forth.
(8) Improve the construction of corporate governance mechanisms. Financial companies should improve the corporate governance mechanism, build a corporate governance organizational structure with scientific decision-making, strong implementation and effective supervision, establish an effective risk management and internal control system, and form an endogenous mechanism that adheres to its positioning and develops benignly. Establish and improve the performance evaluation system for directors, supervisors and senior managers, implement the system of deferred payment and recourse clawback of performance remuneration for executive directors, senior managers and personnel in key positions, establish a back-check mechanism for major violations and major risk events, and strictly pursue responsibility and accountability for dereliction of duty and other behaviors.
(9) Comprehensively deepen the construction of industry culture. Financial companies should strengthen cultural self-confidence, vigorously promote the excellent traditional Chinese culture, adhere to honesty and trustworthiness, seek profit from righteousness, be prudent, be honest and innovative, comply with laws and regulations, promote the culture of integrity and the spirit of contract, strengthen the construction of a clean financial culture, strengthen the reputation restraint mechanism, establish a correct outlook on business, performance and risk, operate prudently and prudently in accordance with laws and regulations, and consciously fulfill social responsibilities.
4. Strengthen risk prevention and control in key areas
(10) Prevention and control of credit risks. Financial companies should strictly take the real risk status of assets as the basis and standard for risk classification, truly reflect the quality of assets, make sufficient provisions, strengthen unified credit management, and build a solid "three lines of defense". In accordance with the principles of legal compliance, active disposal, and due diligence recovery, we comprehensively use various methods such as collection, restructuring, and repayment of debts in kind to standardize and orderly disposal of non-performing assets. For non-performing assets left over from history or undisposed of for a long time, they should be written off and substantively resolved.
(11) Pay close attention to liquidity risk. The financial company shall establish a framework for the calculation and analysis of capital flow, effectively adjust the capital position of its members, and make reasonable provisions to meet the needs of liquidity management. Conduct regular liquidity stress tests, formulate liquidity plans, and strictly prohibit the recycling of short-term lending funds to issue loans.
(12) Focus on business risks outside the group. A financial company should scientifically formulate business development plans and strategies, accurately understand the essence of business risks outside the group, improve risk prevention and control mechanisms, and strictly control the level of financial leverage and external risk exposure. It is strictly forbidden to disguise interbank lending business as a tool for long-term capital injection; it is forbidden to handle interbank business without or beyond the credit line; and strictly implement the requirements for checking the authenticity of trade background, so as to prevent the bill business from being used as an arbitrage tool.
(13) Strengthen information technology risk management. Financial companies should strengthen the construction of informatization, promote digital transformation, and scientifically use digital technology to improve financial service capabilities. Establish an information technology risk management system and incorporate it into comprehensive risk management, strengthen network security management, data security management, business continuity management and information technology outsourcing management, fully identify, monitor and control information technology risks, and ensure the safe and stable operation of information systems.
5. Improve the effectiveness of supervision of financial companies
(14) Strictly control the entry gates. It is necessary to strictly examine the qualifications of shareholders, and strictly prohibit the establishment of financial companies by enterprise groups that cross business in a disorderly manner, have excessively high leverage ratios, and have a record of serious untrustworthy behaviors and major violations of laws and regulations; thoroughly identify the authenticity of the funds invested in the shares, and strictly prevent circulating capital injection, false capital contributions, capital evasion, and non-own funds from becoming shareholders; prudently check the application for qualifications for business with spillover risks, such as acceptance bills and interbank loans; strengthen the management of the qualifications of directors and senior executives, and promote the selection and appointment of enterprise groups and financial companies with good conduct and good reputation. Directors and senior managers with good records of compliance with laws and regulations shall be ordered to adjust the shareholders, directors and senior management of violations of laws and regulations in accordance with the law.
(15) Comprehensively strengthen routine supervision. It is necessary to strengthen penetrating supervision, looking at both the asset side and the liability side, and thoroughly examining the abnormal situations such as the exceedance of key indicators such as liabilities and bill business outside the group, the sharp decline in the deposits of member units, and the serious mismatch of assets and liabilities It is all the more necessary to look at risks through the account sheets and to see through the business logic and risk logic behind various changes; strengthen the analysis and judgment of the production, operation, and risk status of enterprise groups, and organically integrate the monitoring of enterprise groups with the supervision and control of financial companies. Adhere to the implementation of differentiated supervision, and implement classified supervision of financial companies based on regulatory ratings and risk classifications.
(16) Resolve stock risks in a solid and orderly manner. It is necessary to consolidate the main responsibility of financial companies for risk disposal, strengthen shareholder responsibility, urge enterprise groups to fulfill their shareholder rescue obligations in accordance with the law, promote the implementation of the territorial responsibility of local party committees and governments for risk disposal, improve the normalized risk disposal mechanism, and comprehensively use financial risk disposal measures such as group self-help, judicial reorganization, and bankruptcy liquidation, reasonably grasp the timing and rhythm of risk disposal, and prevent the risk of risk disposal. Improve the early correction mechanism of financial risks with hard constraints, and set clear rectification deadlines and specific rectification requirements.
(17) Increase the intensity of supervision and investigation. It is necessary to strictly implement the requirements of uniform regulatory standards for similar institutions and similar businesses, increase the deterrent effect of supervision and investigation, strengthen the "double punishment" of institutions and personnel in accordance with the law, and improve punishment mechanisms such as punishment information disclosure, joint disciplinary action, and market bans. Promptly disclose information on shareholders who violate laws and regulations to the public, and where serious violations constitute crimes, assist in pursuing criminal responsibility in accordance with law, so as to achieve market restraint and punishment of shareholders with major violations of laws and regulations. Strictly punish executives who violate laws and regulations, strengthen the linkage of supervision, discipline and law, and for serious circumstances, distinguish between different circumstances, take measures to cancel the qualifications for a certain period of time or even life, and prohibit a certain period of time or even life from engaging in banking work. Cooperate with the competent departments of the industry to severely punish illegal intermediaries, and increase the degree of rectification and accountability for violations of laws and regulations such as issuing false reports.
(18) Strengthen regulatory coordination and linkage. It is necessary to implement the relevant requirements of the Party Central Committee on the establishment of a local financial regulatory system dominated by local dispatched agencies of the central financial management department, improve the normalized communication mechanism with local financial commissions, strengthen the coordination of central and local supervision, timely report important regulatory information, key risk clues and major special actions, and form a joint regulatory force. Strengthen the coordination and linkage with the shareholder supervision department of the financial company, other central financial management departments and other parties, understand the operation and risk situation of the company and its affiliated enterprise groups, transmit regulatory guidance and concerns, and unite all parties to work together to improve the effectiveness of regulatory measures. Strengthen information sharing, supervision, and coordination with local governments and discipline inspection and supervision organs, promote the rectification of regulatory concerns, strengthen regulatory accountability for major risks, and form a joint force of financial supervision and discipline inspection and supervision.
(19) Effectively improve the quality and efficiency of regulation. Adhere to supervision in accordance with the law and supervision for the people, focus on forging a team of regulatory cadres with strong politics, strong work style, and excellent ability, strengthen the professional construction of the supervision team, cultivate the regulatory spirit of dedication, daring to supervise, proficient in supervision, and strict accountability, and form a serious regulatory atmosphere. Improve the supervision and accountability mechanism, strengthen the "supervision of supervision", and strictly pursue responsibility in accordance with regulations, discipline and law for the implementation of the Party Central Committee's financial decision-making and deployment, dereliction of duty in supervision, ineffective risk handling, concealment and non-reporting, and the resulting major losses, serious consequences, and bad impacts. At the same time, adhere to the "three distinctions", refine the implementation of the due diligence exemption system and fault tolerance and correction mechanism.
(20) Strengthen the anti-corruption crackdown on finance. It is necessary to improve the allocation and operation mechanism of power, so that the punishment of financial corruption and the prevention and control of financial risks are coordinated and linked, and the establishment and improvement of systems and the strengthening of system implementation are promoted simultaneously. Continue to strengthen education on clean government, carry out warning education on a regular basis, and promote the integration and coordination of all types of supervision. If it is discovered that the staff of a financial company has taken advantage of their position to solicit or accept bribes, or to accept kickbacks and fees in various names in violation of regulations, or to embezzle, embezzle, embezzle, or embezzle the company's or customers' funds, and other suspected violations and crimes, it is necessary to promptly transfer them to the discipline inspection and supervision organs or judicial organs in accordance with the law, so as to promote the "three non-corruptions" and severely crack down on financial crimes.
State Administration of Financial Supervision and Administration
April 29, 2024
Source: Department of Supervision of Non-Banking Institutions
WeChat editor: Guan Qiao
Introduction to "Risk Warning: Financial Edition".
Finance is the lifeblood of the modern economy, and financial stability leads to economic stability. Financial security is related to the overall development of national and regional enterprises, and it is necessary to maintain a high degree of vigilance against financial risks at all times, enhance the awareness of risk prevention, respond scientifically, and prevent them from occurring. Under the guidance of the authoritative government departments, relying on the advanced big data public opinion monitoring system and a professional analyst team, the "Risk Warning Financial Edition" produced by the China Financial Information Center summarizes, analyzes, and judges the risk public opinion in different fields and categories of the financial industry, and provides authoritative, professional, practical, timely and effective financial risk public opinion monitoring, research and judgment, early warning and response suggestions for financial regulatory departments, factor markets, financial institutions, listed companies, industry associations, various enterprises, colleges and universities, research institutions, etc. 18,000 per year, once a week, released every Friday.
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