Ministry of Finance, Financial Rules for Financial Enterprises

Promulgated: December 7 2006
Effective: December 1 2007
Applicability: These Rules apply to state-owned and state-controlled financial enterprises, financial holding companies, guarantee companies, urban commercial banks, rural commercial banks, rural cooperative banks and credit cooperatives established in the PRC in accordance with the law (Financial Enterprises). These Rules also apply to other financial enterprises (Article 2).

Main Contents: These Rules consist of 11 chapters and 66 articles that lay down the regulatory requirements on Financial Enterprises in such areas as financial risks, fund raising, asset operation, cost control, revenue distribution, restructuring and liquidation and information management, as well as the corresponding punishment. Financial Enterprises may, in accordance with the provisions, appoint, or recommend candidates as, financial controller to the enterprises in which they hold a controlling interest (Article 7).

Financial Enterprises shall, in accordance with the provisions of these Rules and the requirements of internal financial management system, establish sound financial risk control system including particulars such as identification, measurement, monitoring and control; clarify the authority, procedures, contingency plans and specific measures of financial risk management, as well as liabilities to be borne by the parties concerned as financial risks arise; and safeguard against and resolve financial risks (Article 9).