Potential administrative penalties under strong financial regulatory enforcement

According to the China Bank and Insurance Regulatory Commission (CBIRC), in the first quarter of 2018, CBIRC (established by merging the former China Bank Regulatory Commission and China Insurance Regulatory Commission) carried out enforcements against various violations, such as defective corporate governance, violation of macro-control policies, illegal arbitrage of intersectional financial products, infringement of rights and interests of financial consumers, and formulation or provision of false insurance materials. CBIRC strictly imposed administrative penalties on both institutions and responsible individuals violating the regulations during the law enforcement practice.

The Guiding Opinions on Regulating Asset Management Business of Financial Institutions (New Asset Management Regulations) was officially promulgated on 27 April 2018. Aimed at the abuse of arbitrage resulting from different standards enacted by separated supervisions, supervision concepts embodied in the New Asset Management Regulations strengthen supervision coordination and macro prudence management. Financial administrative authorities will strengthen their functional supervision over market access and their daily supervision over asset management business. It is predicted that more compliance disputes and penalties will arise out of asset management business during the implementation of the New Asset Management Regulations.

Liu Siyuan is a partner in the securities department at Jingtian & Gongcheng