Regulator Seeks to Standardise Conduct of Banking Sector Professionals


The China Banking Regulatory Commission is launching what it claims are the first measures aiming to standardise administration of the conduct of banking sector professionals.

On 11 February CBRC issued the “Banking Sector Financial Institution Professional Conduct Administration Guideline (Draft for Opinions) (银行业金融机构从业人员行为管理指引(征求意见稿)).

The regulator says that this is the first occasion that it’s made “systemic requirements of banking sector financial institutions from the perspective of standardising regulation of the conduct of sector professionals.”

According to CBRC the volume of number of banking sector professionals has continually increased in recent years, while at the same time “many banking sector scandals have involved illegal operation or collusion by professionals, exposing problems including inadequacies in the regulation of staff conduct by banks, and some sector professionals lacking effective restraints on their conduct.”

The guidelines seek to strengthen administration of bank employees in three areas, chief amongst them the clarification of administrative structures, including the professional duties of boards of directors, supervisory boards and senior executives.

CRBC will require that banks clarify the departments and executives responsible for administration of staff conduct, as well as require that banks establish staff conduct information systems that gather information on employees on an continual basis.

The guidelines also require the standardisation of staff conduct administrative systems, with an especial focus on risk, legal compliance and training.

CBRC wants regular assessments of banking sector staff, the establishment of regular assessments and long-term monitoring, as well as the use of such mechanisms as the basis for remuneration and promotion decisions.

The guidelines finally require strengthening of external regulation of banking sector conduct, and the submission of staff compliance and assessment reports to banking sector regulators.

“Supervisory and regulatory bodies shall strengthen their assessment supervision and information gathering of sector professionals.

“Regulators may require that those banking sector financial institutions who are unable to satisfy requirements in relation to administration of the conduct of sector professionals formulate rectification plans, as well as order rectification within a set timeframe and adopt corresponding administrative measures on the basis of circumstances.”

The move comes just after China’s Central Disciplinary Commission issued a stern warning about “cats and mice colluding” in the finance sector, and the Chinese Communist Party has called for an end to the “revolving door” between regulators and financial institutions.

CBRC issued a record volume of fines in 2017 after incumbent chair Guo Shuqing launched a crackdown on the banking sector after taking office in February.

The regulator has continued to expose a number of major scandals in the banking sector since the start of the year, including the use of shell companies to conceal non-performing loans by the Chengdu branch of the Shanghai Pudong Development Bank.