From April 29th to May 29th, 2022, China Banking Regulatory Commission publicly solicited opinions on the Measures. The person in charge of the relevant departments of the China Banking Regulatory Commission said that it mainly absorbed and adopted three suggestions: First, according to the principle of regulatory consistency of similar asset management products, combined with the characteristics of wealth management business, the relevant regulations were refined; Second, further improve the related party transactions, risk reserve and other management regulations and specific operational requirements; The third is to adjust and improve some expressions.
At the same time, the above-mentioned person in charge pointed out that the Measures adhere to the four principles of problem orientation, industry benchmarking, risk bottom line and protecting the legitimate rights and interests of investors, which is conducive to promoting the unification of regulatory standards for similar asset management businesses, enhancing the concept of rule of law and compliance of wealth management companies, establishing and improving the internal control and compliance management system, and promoting the formation of a good development ecology for the wealth management industry.
"fresh start"
The person in charge of the relevant departments of the China Banking Regulatory Commission said: "Wealth management companies are in a critical period of' zero start', and it is urgent to build an internal control compliance management system suitable for their business scale, characteristics and risk status, so as to provide a solid guarantee for legal compliance and steady operation." .
According to the data, since the promulgation and implementation of the Measures for the Administration of Financial Subsidiaries of Commercial Banks (hereinafter referred to as the Measures for the Administration of Financial Companies) in February, 20 18, 30 financial companies have been approved for preparation, and 28 of them have been approved for opening. By the end of June 2022, the total balance of wealth management products of banks and wealth management companies was 29. 1 trillion yuan. Among them, the product balance of the wealth management company is 19. 1 trillion yuan.
Ceng Gang, director of the Shanghai Finance and Development Laboratory, pointed out that compared with Public Offering of Fund and other asset management institutions, the bank's wealth management subsidiaries have shortcomings in governance structure, incentive and restraint mechanism and governance environment. Therefore, "as a new asset management institution with independent legal personality, it is necessary for the financial subsidiary to build a comprehensive and effective internal control management system as soon as possible", the person in charge said.
Strengthening the entrusted management responsibility of wealth management companies
The Measures require wealth management companies to formulate a comprehensive, systematic and standardized internal control system for all business activities and management activities, and conduct a comprehensive evaluation at least once a year.
First, strengthen product design and duration management. It is required to strictly implement the internal approval procedures before the issuance of wealth management products, continuously track the changes of risk monitoring indicators of various products, carry out stress tests, and take effective measures in time.
The second is to strengthen the account management of wealth management business. It is required to obtain the identity information of investors completely and accurately, and open a wealth management account for investors. All processes such as collection, receipt, payment and transfer of wealth management funds are handled through bank accounts and bank clearing and settlement channels, and sales information and data exchange of wealth management products are conducted through the central data exchange platform of banking wealth management registration and custody center and other platforms recognized by China Banking and Insurance Regulatory Commission. Each wealth management product has an investment account to better track the investment of funds and implement "three orders management".
The third is to improve the investment trading system. It is required to reasonably divide the investment decision-making authority and establish a continuous evaluation and feedback mechanism for investment decision-making authorization. Clarify the audit standards, decision-making processes, risk control measures and post-investment management requirements for different types of asset investments. Improve the whole transaction process management system and effectively identify and control related risks.
Fourth, implement all-round management of key personnel in important positions. Implement post responsibility system and incompatible post separation measures, and emphasize the use of unified management communication tools to conduct investment transactions and monitor traces.
Fifth, strengthen risk isolation with the parent bank. Financial management companies are required to independently examine and approve each investment and make investment decisions. Identify related parties comprehensively and accurately, standardize the management of related transactions, and set reasonable and prudent standards for major related transactions.
Promote the unification of regulatory standards for similar asset management businesses.
Liu Yuzhen, director of Peking University Financial Development Research Center, pointed out that the wealth management company industry as a whole is in a "newborn period", and its organizational structure and business characteristics are quite different from those of traditional commercial banks and non-bank financial institutions. The introduction of relevant regulatory measures by the regulatory authorities is conducive to promoting wealth management companies to establish and improve unified and standardized internal control standards.
Yuan Zhihong, president of Huaxia Wealth Management, also told the Securities Times China reporter: "The establishment of the wealth management subsidiary is still short, and it is still necessary to fully learn from the good practical experience of the asset management industry at home and abroad."
In this regard, the person in charge of the relevant departments of the China Banking Regulatory Commission pointed out that the Measures fully benchmark the good regulatory practices of domestic and foreign asset management industries and refine the relevant requirements in combination with the characteristics of wealth management companies.
The first is to set up a chief compliance officer. Responsible for reviewing, supervising and inspecting the construction and implementation of internal control, and can report directly to the board of directors and regulatory authorities to better play its role of supervision and checks and balances.
The second is to further strengthen information disclosure. Establish personnel information registration and publicity system, and clarify the list of investors and traders. Publicize investor employment information, related party transaction information, custodian information, etc. On the wealth management company official website or China's wealth management website.
The third is to strengthen transaction monitoring, early warning and feedback. Implement a fair trade and abnormal trade monitoring system to actively identify and prevent risks. Implement a centralized transaction and transaction record system to ensure the separation of investment and transaction, and the transaction information can be traced and verified.
The fourth is to improve the protection of personal information. Establish an information isolation system, strengthen information isolation, and prevent improper dissemination and use of sensitive information. Handle investors' personal information according to law and protect the safety of investors' personal information.
What does a wealth management company do?
The CBRC pointed out that for those who do not meet the requirements of the Measures, the financial subsidiary should complete the rectification within the transition period.
The person in charge of the relevant departments of the CBRC said: "Before the end of the transition period, wealth management companies should submit the internal control self-assessment reports to the relevant regulatory authorities of the CBRC one by one according to the requirements of the Measures to ensure that the provisions of the Measures are internalized into their own systems and operational norms." .
Yuan Zhihong told reporters that during the period of soliciting opinions on the Measures, Huaxia Finance sorted out the current situation of the company's internal control management and found that the company needs to further improve its corporate governance in terms of internal control responsibilities; In terms of internal control activities, it is necessary to further optimize and reconstruct the company's business system; In terms of internal control, it is necessary to further promote the construction of information systems and data governance; At the same time, it is necessary to further strengthen internal control supervision and comprehensively evaluate the effectiveness of internal control.
The CBRC pointed out that the Measures, together with the New Regulations on Asset Management, the New Regulations on Financial Management and the Measures for Financial Management Companies, constitute the fundamental compliance of internal control management of financial management companies. This also means that under the pattern of large capital management, the regulatory standards will be more unified, and sub-sectors such as bank wealth management business will also operate more standardized.
Yuan Zhihong said that on the basis of comparison with peers, financial subsidiaries should also adhere to the stable nature of wealth management business, standardize the operation process of wealth management business, establish a smooth internal operation mechanism, strengthen the empowerment of financial technology to business development, realize systematic operation and refined management and control, and give play to the differentiated advantages of wealth management companies.
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