news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Reporter of China Business Network: Yuan Yuan Editor of China Business Network: Ma Ziqing

On August 16, the State Financial Regulatory Administration announced that it has drafted the "Regulations on Compliance Management of Financial Institutions (Draft for Comments)" (hereinafter referred to as the "Regulations") and is now soliciting public opinions.

The State Financial Supervision and Administration Bureau stated that it will carefully study the feedback from all parties, further revise and improve the Measures and publish and implement them in a timely manner, urge and guide financial institutions to comprehensively improve their compliance capabilities, and ensure that business management and employee performance are steadily advanced in compliance with the law.

Financial institutions should establish a chief compliance officer at their headquarters

The Measures consist of five chapters and 65 articles, which regulate the general principles, compliance management responsibilities, compliance management guarantees, supervision management and legal liabilities, and annexes.

According to the introduction, "compliance" means that "the operation and management behaviors of financial institutions and the performance of duties of their employees shall comply with compliance norms." Compliance norms include laws, administrative regulations, departmental rules and normative documents, industry self-regulatory norms, and internal norms of financial institutions.

The reporter of Daily Economic News noted that according to the requirements of the Notice,Financial institutions should appoint a Chief Compliance Officer at their headquarters. The Chief Compliance Officer is a senior executive who is responsible to the directors of the institution.ChangheDirectly led by the president (general manager) and accountable to the board of directorsFinancial institutions shall establish compliance officers in their provincial (or separately planned municipal) branches or first-level branches. The compliance officers are senior management personnel of the institutions at the same level and are directly supervised by the principal person in charge of the institutions at the same level.

Regarding "encouraging financial institutions to set up chief compliance officers and compliance officers separately", the Notice states that chief compliance officers and compliance officers shall not be responsible for managing the front-office business, finance, fund utilization, internal audit and other departments of financial institutions that may conflict with compliance management. The exceptions are when the president or general manager of a financial institution concurrently serves as the chief compliance officer, or when the president or general manager of a provincial (specially planned city) branch or first-level branch concurrently serves as the compliance officer.

At the same time, the Notice also puts forward requirements for the qualifications of the Chief Compliance Officer. Specifically, the Chief Compliance Officer should be familiar with relevant compliance regulations, be honest and trustworthy, be familiar with financial business, and have the professional knowledge and skills required for compliance management. On the premise of meeting the basic qualifications of senior management personnel of the relevant institutions stipulated by the State Financial Supervision and Administration Bureau, the Chief Compliance Officer should also have: full-time undergraduate degree or above; more than eight years of financial work and more than three years of legal compliance work, or more than eight years of legal compliance work and more than three years of financial work, or more than eight years of financial work and obtained a legal professional qualification certificate; have the independence required for the proposed position; and other conditions stipulated by the State Financial Supervision and Administration Bureau.

Building a complete and effective compliance management system has become one of the core competitiveness of financial institutions

The Measures state that the Chief Compliance Officer, Compliance Director, Compliance Officer, and General Counsel who are senior management personnel of financial institutions that have been set up before the implementation of the Measures can perform the various duties of the Chief Compliance Officer stipulated in the Measures. Before the above-mentioned personnel are transferred to other jobs, they are not subject to the employment conditions stipulated in the Measures and do not need to obtain the qualifications approved by the State Financial Supervision and Administration Bureau or its dispatched agencies again.

"The introduction of the Compliance Management Measures for Financial Institutions in China will accelerate the promotion of financial institutions to improve their compliance management systems, help consolidate the sound management foundation of financial institutions, enable them to better cope with complex business environments, and effectively prevent potential risks. It will help financial institutions protect the legitimate rights and interests of consumers and enhance their market reputation. At the same time, financial institutions will cultivate a culture of compliance management, which will help promote fair competition in the market, allow enterprises to focus on their main businesses, and continuously improve their innovation capabilities and service quality."China Everbright BankZhou Maohua, a macro-researcher at the Financial Markets Department, told reporters that the compliant and healthy development of financial institutions is also an inherent requirement for the high-quality development of the financial industry.

A reporter from the "Daily Economic News" noticed that regulators had already issued many documents on compliance, such as the "Guidelines for Compliance Risk Management of Commercial Banks", "Compliance Management Measures for Insurance Companies", and "Notice of the China Insurance Regulatory Commission on Further Strengthening the Compliance Management of Insurance Companies".

"Under the background of strong regulation, compliance has become a major issue concerning the future of financial institutions and practitioners. Building a comprehensive and effective compliance management system is undoubtedly of great value to financial institutions." Liu Xiangwen, Ding Haidong, and Guo Xi of the Compliance and Government Supervision Department of Zhong Lun Law Firm in Beijing also clearly stated in the article "Construction and Implementation of Compliance Management System of Financial Institutions under the Background of Strong Regulation".In the context of increasingly fierce competition, building a complete and effective compliance management system has become one of the core competitiveness of financial institutions. It is an inevitable choice for financial institutions to survive and develop under the current policy and market environment.。

On the one hand, under the background of strong supervision, the consequences of compliance risk events are unbearable. In addition to economic losses, certain violations may also lead to suspension of business or even cancellation of licenses, seriously affecting operations and even the survival of institutions. On the other hand, in the current market environment, customers and partners in the financial market are more inclined to cooperate with institutions with effective compliance management and good compliance performance.

Daily Economic News