The General Office of the China Banking and Insurance Regulatory Commission ("CBIRC") has recently distributed the Guiding Opinions on Strengthening the Establishment of Long-term Compliance Management Mechanisms for Overseas Agencies of Chinese-funded Commercial Banks (the "Opinions").
The Opinions, comprised of 25 articles, lay out its major contents in seven sections. First, the section concerning general requirements makes clear objectives and basic principles regarding the establishment of long-term compliance management mechanisms for overseas agencies. Second, the compliance accountability mechanism will be improved. Third, the compliance management and control mechanism will be optimized. Fourth, an improvement will also be made to the compliance duty performance mechanism. Fifth, the compliance assurance mechanism will be intensified. Sixth, the supervisory communication mechanism will be strengthened. And seventh, the cross-border supervision mechanism will be made more thorough. Among others, the Opinions require that action should start with the corporate governance and internal control, adding that efforts shall be made to clearly define the respective duties in compliance management of agencies at different levels, all business lines and units, and their heads, ensure the fulfillment of responsibilities for rectification of wrongdoings, and strictly implement the accountability system. Meanwhile, it is stressed that direct responsibilities of personnel at the frontline of defense shall be solidified, while the second and third lines of defense shall be made more independent and authoritative; also, the reporting line for compliance affairs shall be optimized to form a close-circle management process by which problems uncovered in supervisory inspections will be corrected and the correction will be then confirmed and verified.