People's Bank of China, China Banking and Insurance Regulatory Commission and China Securities Regulatory Commission, Guiding Opinions on Improving the Regulation of Systemically Important Financial Institutions
中国人民银行、中国银行保险监督管理委员会、中国证券监督管理委员会关于完善系统重要性金融机构监管的指导意见
December 05, 2018 | BY
Susan MokChina defines systemically important financial institutions
Promulgated: November 27 2018
Effective: as of date of promulgation
Applicability: The term “systematically important financial institution” (SIFI) means a financial institution that is relatively large in scale, the complexity of the structure and business of which is relatively high, whose connections with other financial institutions are relatively strong, that provides critical services in the financial system that are difficult to substitute and, should a major risk event arise, making it impossible for it to continue operations, it would have a material adverse impact on the financial system and real economy, and could trigger a systemic risk (Article 1).
The Opinions also apply to financial holding companies identified as systematically important (Section Seven).
Main contents: The assessment of SIFIs is conducted once per year (Article 7).
For the assessment participation standards, the size indicator for financial institutions may be used, i.e. the total of on- and off-balance sheet assets of all institutions participating in an assessment may not be less than 75% of the total assets of the industry in question at the end of the preceding year on the same comparable basis as appears in the regulator's statistics; or the number indicator for financial institutions may be used, i.e. not less than 30, 10 or 10 institutions participating in the assessment in the banking, securities or insurance industries respectively (Article 8).
In addition to the minimum capital requirements, reserve capital and countercyclical capital requirements, SIFIs are required to comply with capital surcharge requirements and leverage ratio requirements (Article 15).
The People's Bank of China leading other relevant entities such as the China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission and Ministry of Finance shall form a crisis management committee with responsibility for establishing a special resolution mechanism for SIFIs and promoting the formulation of recovery and resolution plans (Article 24).
| promulgated: 2018-11-27 effective: 2018-11-27This premium content is reserved for
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