The reporter learned from the China Banking and Insurance Regulatory Commission today (14th) that in order to further strengthen the supervision of related party transactions, regulate the related party transactions of banking and insurance institutions, and prevent the risk of benefit transfer, in accordance with the “Company Law of the People’s Republic of China” and “Banking Supervision and Administration Law of the People’s Republic of China” The “Commercial Banking Law of the People’s Republic of China”, “The Insurance Law of the People’s Republic of China” and other laws and regulations, the China Banking and Insurance Regulatory Commission has drafted the “Measures for the Administration of Affiliated Transactions of Banking and Insurance Institutions” (hereinafter referred to as the “Measures”).
The “Measures” will come into force on March 1, 2022, and an implementation notice will be issued in the near future to clarify arrangements for the transition period.
The measures clearly state that banking and insurance institutions shall maintain the company’s operational independence, improve market competitiveness, control the number and scale of related party transactions, focus on preventing risks of transferring benefits to shareholders and their related parties, and avoid complex arrangements such as multi-level nesting. Banking institutions are not allowed to provide funds to related parties directly through or through inter-bank, wealth management, off-balance sheet and other businesses, breaking the ratio limit or violating regulations.
Insurance institutions shall not use real estate projects, non-insurance subsidiaries, trust plans, investment in asset management products, or other channels, nesting methods, etc. to break through regulatory restrictions in disguise to provide financing for related parties in violation of regulations. When a trust company conducts its own business, it shall not lend funds or transfer property to related parties, and shall not provide guarantees for related parties.
The measures adhere to a problem-oriented approach, requiring institutions to optimize the identification of related parties and related transactions, and strengthen the management of related transactions in key areas such as off-balance-sheet, asset management, and inter-bank transactions, in accordance with the principles of substance over form and penetrating supervision.
At the same time, the main responsibilities of the institutions in the management of related-party transactions should be consolidated, the accountability mechanism should be established at all levels, the functions of the related-party transaction control committee should be strengthened, and a cross-departmental related-party transaction management office should be established at the management level. Identify and manage the daily management of connected transactions.
In addition, the measures also clarify the measures to deal with the violations of institutions and directors, supervisors, and senior management personnel. Bancassurance institutions with an E-level corporate governance regulatory assessment result are not allowed to carry out credit granting, fund utilization, and fund-based associations. trade. Measures such as industry notification and ordering of institutions to be held accountable can be taken against those who violate the regulations.
(Headquarters CCTV reporter Wang Lei)