In the News: Data Protection Law Draft; Baoshang Bank Takeover; and Tougher CSRC Penalties
June 03, 2019 | BY
Marilyn RomeroChina's internet regulator releases a draft of data protection law for public consultation; regulators take over Baoshang Bank due to serious credit risk exposure; and CSRC vice chair Yan Qingmin pushes for tougher penalties.
Data privacy
Internet regulator seeks public views on draft data regulations
The Cyberspace Administration of China, the country's internet regulator, has released for public consultation its proposed data security regulation, and is seeking views on the draft. The new law applies to the network-based collection, storage, transmission, processing, and use of data, as well as data security protection and supervision in the country. The draft also requires operators to take immediate action in events of personal information leakage or when data security risks increase significantly.
The draft regulation requires network operators to neither force nor mislead users into agreeing to the collection of their personal information on such pretexts as improving service quality or enhancing user experience. The draft will be open for suggestions and opinions until June 28.
More from CLP: Legislation roundup: Cybersecurity review, data security, and economic and technology zones; PRC Cybersecurity Law; Cyberspace Administration of China, Provisions for the Administration of Financial Information Services; Cyberspace Administration of China, Measures for Security Assessments of the Transfer
Chinese regulators take over Baoshang Bank
In an unusual move by Chinese regulators, the People's Bank of China, or PBOC, and the China Banking and Insurance Regulatory Commission, or CBIRC, have taken over private lender Baoshang Bank due to its serious credit risk exposure. The bank's main stakeholder is Tomorrow Holdings, a company founded by billionaire financier Xiao Jianhua, which was recently the target of a government investigation on system risks. Baoshang Bank is a relatively small, lesser-known lender based in the industrial city of Baotou in Inner Mongolia, but is considered an important piece of Xiao's sprawling business empire, and has a close relationship with Tomorrow Holdings. In a joint statement, the PBOC and CBIRC said the move has been made to protect the legitimate rights of depositors and other clients. The bank's businesses will be entrusted to China Construction Bank for their day-to-day administration.
CSRC seeks tougher penalties for capital markets violations
Yan Qingmin, vice chairman of the China Securities Regulatory Commission, or CSRC, has advocated tougher penalties for those who violate the country's capital markets rules. Last year, the securities regulator imposed a record Rmb10.3 billion ($1.5 billion) in fines. According to Yan, penalties should still be higher, and the cost of breaking China's capital markets rules is still too low. China has seen companies defaulting at a record pace, and authorities have been lenient on some disclosure practices. Ensuring that capital markets rules are being observed has become extremely important, especially now that China has opened the country's stock and bond markets to international investors and securities firms. Yan also stressed that capital market rules should move ahead in alignment with the development of the Chinese economy and should not fall behind or jump ahead.
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