Annex 1: Guidelines on the Risk Evaluation of Banking Services in the China (Shanghai) Pilot Free Trade Zone (Interim)

Annex 2: Monitoring and Reporting System for Banking Institutions in the China (Shanghai) Pilot Free Trade Zone (Interim)

Annex 3: Detailed Rules on the Simplification of the Access of Banking Institutions and their Executives to the China (Shanghai) Pilot Free Trade Zone (Interim)

The Shanghai Bureau of China Banking Regulatory Commission
May 12, 2014
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Annex 1:
Guidelines on the Risk Evaluation of Banking Services in the China (Shanghai) Pilot Free Trade Zone
(Interim)

To implement the important strategic plan of developing the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as "the PFTZ") made by the CPC Central Committee and the State Council of China, encourage banking institutions to introduce financial innovations to effectively facilitate the real economy on the condition that risks are controllable, in accordance with the Notice of the China Banking Regulatory Commission on Issues Concerning Banking Supervision in the China (Shanghai) Pilot Free Trade Zone, and as approved by CBRC, the Guidelines on the Risk Evaluation of Banking Services in the PFTZ(Interim) (referred to hereafter as the “Guideline”) is hereby issued.

I. General Provisions

1. Before conducting business in the PFTZ, banking institutions shall observe the prudent supervision rules of CBRC and the specific requirements set forth herein, and ensure constant compliance with these rules and requirements.

2. The Guideline applies to commercial banks dealing with the PFTZ-related business in Shanghai, and serves as a reference for policy banks and other financial institutions established with the approval of CBRC.

3. For the purpose of the Guideline, the PFTZ-related business refers to the various financial services provided by commercial banks in Shanghai (including the PFTZ, the same below) to clients in the PFTZ (including residents and non-residents).

4. CBRC Shanghai Bureau exercises constant supervision over the PFTZ-related business and conduct risk evaluation in accordance with the Guideline.

II. Basic Requirements

5. The board of directors shall assume the ultimate responsibility for the risk management of the PFTZ-related business, examine and approve the development strategy and risk preference designed by the senior management for such business in line with the overall risk tolerance capability and operation strategy of the bank, and ensure that the senior management effectively manage and control the risks in the PFTZ-related business.

6. Commercial banks dealing with the PFTZ-related business in Shanghai shall seek full support from their headquarters for such business, and ensure that such business is incorporated in the overall policy process, risk management and information system.

7. Commercial banks shall delegate adequate authority to the PFTZ-related business, ensuring both risk control and innovation.