8. The head office of commercial banks shall coordinate the innovation and risk management of the PFTZ-related business through a specialized supervisory institution, so as to ensure that their management policies are implemented consistently and that the risk information is promptly reported.

9. Commercial banks shall have in place a comprehensive risk management system covering liquidity risks, market risks, counterparty credit risks, country risks, legal and compliance risks, risks of consumer protection in financial services, and other risks mentioned in the Guideline, and develop risk management rules and requirements appropriate to their activities in the PFTZ in accordance with the specific management regulations on identifying, measuring (evaluating), monitoring and controlling credit, operational and other risks, in order to ensure comprehensive risk management throughout all business practices.

10. Commercial banks shall have in place an ex-ante risk assessment mechanism for their activities in the PFTZ, which defines clearly assessment responsibilities of the risk management, internal control and compliance management departments and requires the department heads to confirm every assessment result by signing, so as to ensure a sound knowledge of relevant risks and sufficient capability to manage and control such risks.

11. Commercial banks shall have in place a continuous assessment mechanism for their business practices in the PFTZ to assess regularly the effectiveness and appropriateness of their policy process, risk management, information system and personnel allocation and make timely improvements, in order to ensure that their management capability keeps up with the business developments in the PFTZ.

12. Commercial banks shall have in place a risk-hedging mechanism for their business practices in the PFTZ to identify hedging objectives, strategies, approaches, tools and procedures and assess regularly the effectiveness of risk hedging activities.

13. Commercial banks shall fully incorporate their business practices in the PFTZ in measuring their regulatory capital, loan loss reserves and leverage ratio and ensure that all prudential regulation indicators are in line with relevant regulatory requirements.

14. Commercial banks shall have in place a risk reporting system for their activities in the PFTZ which identifies the reporting duties of mandated reporters and ensures timely and accurate reports on risk exposures, risk management (including risk limits management), stress testing results and significant sudden risk changes to the board of directors, the senior management and the supervisory institution for PFTZ-related matters. The board of directors and the senior management shall hear these reports at least on a quarterly basis.