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Regulatorycompliance
CHINA
Capital
Beijing
Largestcity Shanghai
Currency Renminbi
Language StandardChinese
Population 1,339,724,852
GDP Nominal $7.298trillion
Purchasepowerparity $11.299trillion
Realgrowthrate 9.2%(2012)
Government MarxistLeninistsinglepartystate
Legislature NationalPeoplesCongress
Geographicalarea 3,704,427miles2
Economy 2nd
largest|Largestexporterofgoods
inthe
world
|2nd
largest
importer
|
Fastestgrowingeconomy(butslowing)
|Lowcostproduction
Corruption
perceptionrating/
worldwideranking
3.6[10good0bad]/75th
Pointsofinterest Worldshighestpopulation|Largest
standingarmy|2nd
largestcountryland
area;apublicsuperpower|Expected
toleadtheworldeconomyby2050|
Exponential/uncontrolledgrowthhas
severelyimpactedChinasresources
andenvironment. Benefitsofeconomic
developmenthas
not
been
distributed
evenly,resultinginawidedevelopment
gapbetweenurbanandruralareas
hasasignificant
business
presenceinChina,havingcarriedout
businessintheregionformanyyears. Our
professionalservicesresourcesliaisewith
thelocal
banking
community
and
are
engagedinimplementingarangeof
LombardRiskservicesandproduct,
includingfullyautomatedregulatory
reporting.
LombardRiskREPORTERforregulatory
compliance
LombardRiskbusinessandregulatory
complianceexpertsexplain:
regulatoryenvironment
in
China
Banksregulators
TheChinaBankingRegulatoryCommission(CBRC):
TheCBRCwascreatedbytheStateCouncilofPRCin
responsetoswellingdebtloads,undercapitalization
andnontransparentbusinesspractices;itisthe
countrysprimarybankregulatorsince2003.
ThePeoplesBankofChina(PBC):ThePBCisthe
centralbankofthePRC. Itcontrols,formulates,and
implementsmonetarypolicy;consolidatesfinancial
statisticsfromreportsintheindustryandproduces
economicanalysisandforecast;issuesRenminbi
(currency)
and
administers
its
circulation.
TheStateAdministrationofForeignExchange(SAFE):
TheSAFEisanadministrativeagencyunderthePBC,
whichdraftsrulesandregulationsregardingforeign
exchangemarketactivities;monitorsrisk,balanceof
paymentandexternalcreditanddebt;development
andsupervisionoftheforeignexchangemarket,
reservesandassets.
TheirroleistoregulatethebankingsectorofthePRC(Peoples
RepublicofChina).
Generally,datesforBaselIIIimplementationstartattheendof
2013,withdifferentdatesaccordingtowhethertheinstitutionis
systematicallyimportantornot.Systematicallyimportantbanks
haveuntiltheendof2013,whereasotherbankshavetilltheend
of2016
to
implement
Basel
III,
loan
provision
ratio
and
leverage
ratiosupervision.
Investmentfirmsregulator
TheChinaSecuritiesRegulatoryCommission(CSRC):
Thenationsfirstcomprehensivesecuritieslegislation
grantedtheCSRCauthoritytoimplementa
centralisedandunifiedregulationofthenationwide
securitiesmarketinordertoensuretheirlawful
operations.
LikeSAFE,theCSRCisanagencyofthePRC. Chinese
firmsdominatetheprivateequitylandscapedueto
foreignfirmsfacingmorestrictregulatoryandfunding
challenges
than
domestic
firms
like
Beijing
based
Hony
Capital.
Insurancefirmsregulator
TheChinaInsuranceRegulatoryCommission(CIRC):
AuthorisedbythePRC,CIRCregulatestheChinese
insuranceproductsandservicesmarketandmaintains
legalandstableoperationsintheindustry.
TheCIRCplanstoimplementthesecondphaseofitsown
solvencyregulation(equivalentofSolvencyII)by2017.
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Regulatorycompliance
GDPgrowth(%)ofChinaandcomparisons
10
5
0
5
10
15
20
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
China
US
UK
World
Bankcomposition
ChinaBankingRegulatoryCommission
Current
chairman
ShangFulin
Previous
chairman
LiuMingkang(2011)
Address JiaNO.15FinancialStreet,Xicheng
District,Beijing,100140
Website http://www.cbrc.gov.cn/english/in
dex.html
TheCBRCwasestablishedin2003tooverseethebankingsectoras
anindependent,ministrylevelsupervisoryofficethatreports
directlytothestatecouncil. CBRCislargelycomposedofbank
supervisiondepartmentsthatpreviouslyreportedtothePBC.
TheCBRCrequiresreportssuchas:
Balancesheet,P&Lreporting
Capitaladequacy,liquidity,interestrate,large
exposuresreporting
Derivativesandsecuritiesreporting
TheregulatoryobjectiveoftheCBRCisto:
Protecttheinterestofdepositorsandconsumers
throughprudentialandeffectivesupervision
Maintainmarketconfidencethroughprudentialand
effectivesupervision
Enhancepublic
knowledge
of
modern
finance
through
customereducationandinformationdisclosure
Combatfinancialcrime
ThesupervisoryandregulatorycriteriaoftheCBRCareto:
Promotethefinancialstabilityandfacilitatefinancial
innovationatthesametime
Enhancetheinternationalcompetitivenessofthe
Chinesebankingsector
Setappropriatesupervisoryandregulatory
boundariesandrefrainfromunnecessarycontrols
Encouragefairandorderlycompetition
Clearlydefinetheaccountabilityofboththe
supervisorand
the
supervised
institutions
Employsupervisoryresourcesinanefficientandcost
effectivemanner
ExamplebankreturnsrequiredbytheCBRC
Return Name
G01 / Balancesheet
G01Z
/ Loan
qualityreport
G03 / Provisionofasset
G22 / Liquidityratiostatement
S24 /Basic
statement
for
foreign
banks
G04 / P&L
G14
/ Credit
statementIII:top10clientloanlist
G14
/
CreditstatementII:top10ofinterbankplacementlist
G14
/ Credit
statementI:top10ofgrouploanlist
G15 /Top20of
relatedpartytransactionstatement
G21
/ Liquiditygap
G23 /Top10ofdepositclient
G24 /Top10ofinterbank
taken
G32 /Foreignexchangeriskexposure
statement
G41 / Capitalratiostatement
G42 / Onbalancesheetweighted
riskassetscalculationtable
G43 / Offbalancesheetweighted
riskassetscalculationtable
G12 / Loanmovements
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Regulatorycompliance
ExamplebankreturnsrequiredbythePBC
Return Name
B01 /Balancesheet
B02 /P&L
B03 /Otherfinancialdata
B06 /Statementofloan(Classificationinthesizeofthecorporateclients)
B04 /Depositreservemonthlyreport
B05 /P&L
B07 (14 )/Financial
marketmonitoringandstatisticmonthlyreport(14
spreadsheets)
B09 - /CNYincomingand
outgoingpaymentsquarterlyreport(9reports)
B08 /ForeignbankCNYincomingand
outgoingpaymentsstatisticreport
ExamplebankreturnsrequiredbySAFE
Return Name
F01 /FCYloanmovementreport
F03/CNYloan
coveredbyFCYguarantee
F02/Loanscoveredby
overseasguaranteeandguaranteeclaims
LombardRisksREPORTERkeepspacewithregulatory
requirements,automatingendtoendfromdatacollectionto
electronicoutput,sogivingyoutheidealsolutionforall
automatedregulatoryreportingrequirements.
Withfullsupportforkeysupervisorycomputationsand
powerfulworkflow,statusdashboards,graphicalpresentation
oftrendsandvalidations,REPORTERdelivershugesavingsin
timeandeffort,reducesoperationalrisk,anddelivers
significantlyimprovedmanagementinformationand
managementoversight.
BaselIII,EBA/EuropeancommonreportingCOREP
andFINREPandtransactionreporting,aswellas
SolvencyIIfor
the
insurance
marketplace
Regulatorycomputationfromrawdatawith
comprehensiveCapital,LiquidityandLargeExposures
enginesaswellasdetailedstatisticalcomputations
Automationofregulatormandatedandclient
definedvalidationrules
Supportforalltransmissionrequirementsincluding
XBRL,XMLandproprietaryformats
Powerfuldatamanagementfunctionalityovercomes
TheDataProblem:fullyautomatedcleansing,
consolidationandnormalisationofmultipledata
sourcesirrespectiveofdataformat
AutomatedStraightThroughProcessing(STP)
enablesexceptionbasedmanagement,ensuring
regulatoryreporting
is
automated
unless
manual
interventionisneeded
Workflowautomationjobstreamsyourproduction
processenablingsignoffdependenciestobe
achievedunderstricttimetableconditions
Fullsecurityforallprocesses
TrendsandVarianceanalysisprovidesautomated
drilldowncomparisontools,significantlyaccelerating
review,reconciliationandsignoff.Regulators
enquiriesareanticipatedandeasilyanswered
Formoreinformationonanyofthesetopicsvisit
www.lombardrisk.comand/oremail
August2012
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