The risk management of new products under the PFTZ-related business shall be subject to daily supervision procedures. Where necessary, CBRC Shanghai Bureau shall assess and oversee the self-evaluation of banking institutions with a view to enhance intermediary and post-establishment supervision. In case any institutions fail to pass the assessment, CBRC Shanghai Bureau shall take regulatory measures according to law, including such coercive measures as ordering the suspension of business.

III. Special Monitoring and Reporting System

CBRC Shanghai Bureau shall establish relevantly independent statistical and monitoring system for banking institutions in the PFTZ, and regularly collect data and supervision information from two dimensions: business and institutions. Specific reporting requirements are listed in Annex 2: Monitoring and Reporting System for Banking Institutions in the China (Shanghai) Pilot Free Trade Zone (Interim). In view of the innovative and experimental nature of the PFTZ-related work, a two-month trial period is introduced. Within the period, CBRC Shanghai Bureau will not assess the reporting problems caused by misunderstanding of the statistical standards. After the period, the Bureau shall take necessary supervision measures against non-compliant institutions or individuals.

The Bureau shall regularly monitor and analyze the situation and risk management of banking services in the PFTZ, focusing on the efficiency of the support provided by banking institutions to the real economy and the prediction of possible regional and systematic risks, so as to offer important evidence for institutional arrangements. The Bureau shall improve the special monitoring and reporting system based on the development of the business and policies in the PFTZ.

IV. Supervision Requirements for Banking Institutions in the PFTZ

1. Business Scope. Banking institutions in the PFTZ may focus on their business in the PFTZ and cross-border business. Apart from such main business, they may also conduct domestic business outside the PFTZ. The headquarters of Chinese-funded commercial banks which have acquired the offshore business qualification may authorize its PFTZ-based branches to conduct offshore business.

2. The Planning of Branch Network. The pre-establishment approval is not needed for the annual plans of Chinese-funded national commercial banks, policy banks and Shanghai-based banks on establishing new branches or upgrading the existing ones in the PFTZ, and such actions will not be subject to the overall annual plans of the above banks for their branch network in Shanghai.