Four Departments Jointly Release 22 Measures to Strengthen Corporate Governance of Financial Institutions
The National Financial Regulatory Administration, the People's Bank of China, the China Securities Regulatory Commission, and the Ministry of Finance jointly issued the "Implementation Opinions on Strengthening Corporate Governance of Financial Institutions," proposing 22 measures. The goal is to establish a governance mechanism with clear rights and responsibilities and compatible incentives by 2029, thereby enhancing the stability of the financial system. Measures include preventing interference by major shareholders, strengthening look-through supervision of equity structures, optimizing board structures, reinforcing the responsibilities of senior executives, and improving internal control and compliance systems, while implementing differentiated supervision to strictly penalize violations
The National Financial Regulatory Administration, the People's Bank of China, the China Securities Regulatory Commission, and the Ministry of Finance recently jointly issued the "Implementation Opinions on Strengthening Corporate Governance of Financial Institutions," proposing 22 measures.
The "Implementation Opinions" specify that by 2029, a corporate governance mechanism for financial institutions will be basically established, featuring clear boundaries of rights and responsibilities, compatible incentives and constraints, strict risk management, and standardized and efficient operations. The intrinsic stability and risk resistance of the financial system will be significantly enhanced, and the quality and efficiency of financial services in supporting high-quality development will be markedly improved.
The "Implementation Opinions" propose strengthening governance mechanisms to prevent irregular interference by major shareholders and insider control, enhancing look-through supervision of equity structures and related-party transactions, optimizing board structures, reinforcing the responsibilities of "key minorities" such as directors and senior executives, improving incentive and constraint mechanisms, and improving internal control and compliance systems.
The "Implementation Opinions" require strengthening and improving financial regulation, implementing differentiated supervision based on grading and classification, strictly punishing illegal and non-compliant activities, raising the cost of violations, improving risk monitoring and early warning mechanisms, and enhancing the precision, effectiveness, and foresight of supervision. (CCTV)
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