The China Banking and Insurance Regulatory Commission issued the "Regulations on Compliance Management of Financial Institutions," which will come into effect on March 1, 2025.

On December 27, the China Banking and Insurance Regulatory Commission released the "Regulations on Compliance Management of Financial Institutions," which will come into effect on March 1, 2025. The Regulations stipulate that financial institutions should establish a Chief Compliance Officer at their headquarters. The Chief Compliance Officer is a senior executive who reports directly to the Board of Directors and is responsible for identifying any major illegal or non-compliant behavior or risks within the institution. If such issues are identified, the Chief Compliance Officer must report them promptly to the Board of Directors, Chairman, and CEO, propose solutions, and supervise corrective actions. If other illegal or non-compliant behavior is found among the institution's employees, they must follow the institution's internal compliance management procedures to ensure timely reporting, handling, and correction. The Regulations emphasize the importance of compliance in the operation and management of financial institutions and outline the responsibilities of various levels of management in ensuring compliance within the institution. Organizations such as policy banks, commercial banks, insurance companies, trust companies, and other financial institutions are expected to adhere to these regulations to improve their legal compliance and governance capabilities.management personnel() Evaluate the effectiveness of compliance management and the level of compliance culture construction, supervise the resolution of significant issues in compliance management and compliance culture construction; (6) Other compliance management responsibilities. The Board of Directors may establish a compliance committee or delegate compliance-related responsibilities to other specialized committees established by the Board of Directors. Article 12 Senior management of financial institutions shall perform the following compliance management responsibilities: (1) Implement the establishment and functional requirements of the compliance management department, allocate sufficient and appropriate compliance staff, and provide adequate manpower, material resources, financial resources, technical support, and guarantees for them to fulfill their duties; (2) Organize and promote the establishment of compliance management systems, compliance reviews, self-assessments and inspections, compliance risk monitoring and control, and compliance incident handling in the areas under their supervision or jurisdiction; (3) Report and rectify major violations or compliance risks promptly, and ensure accountability is implemented; (4) Other compliance management responsibilities. Article 13 Financial institutions shall establish a Chief Compliance Officer at the headquarters, who is a senior management member, directly reports to the President (General Manager) of the institution, and is responsible to the Board of Directors. Financial institutions should generally establish a compliance officer at the provincial branch or primary branch level, who is a senior management member of the respective institution, directly reports to the President (General Manager) of the respective institution. The Chief Compliance Officer and Compliance Officer of financial institutions shall obtain the qualifications and permits required by the China Banking and Insurance Regulatory Commission or its delegated institutions, except for other provisions specified in these regulations. Article 14 Financial institutions may independently appoint a Chief Compliance Officer and Compliance Officer based on their own business situation, or have them concurrently served by the senior management of the financial institution, provincial branches, or primary branches. If the President (General Manager) of a financial institution concurrently serves as the Chief Compliance Officer, or the President (General Manager) of a provincial branch or primary branch concurrently serves as the Compliance Officer, they shall not be subject to the conditions for appointment of Chief Compliance Officers or Compliance Officers stipulated in these regulations, and do not need to obtain separate qualifications. Article 15 The Chief Compliance Officer and Compliance Officer shall not be responsible for managing departments such as front-office business, finance, fund use, internal audit, etc., which may have conflicting responsibilities with compliance management, except for those cases where the President (General Manager) of the financial institution concurrently serves as the Chief Compliance Officer or where the President (General Manager) of the provincial branch or primary branch serves as the Compliance Officer. Article 16 In addition to meeting the basic qualifications for senior management positions set by the China Banking and Insurance Regulatory Commission, the Chief Compliance Officer should also have the following qualifications: (1) Bachelor's degree or higher; (2) Over eight years of experience in finance with at least three years in legal compliance work, or over eight years of experience in legal compliance work with at least three years in finance, or over eight years of experience in finance with a legal professional qualification certificate; (3) Other conditions prescribed by the China Banking and Insurance Regulatory Commission. Article 17 In addition to meeting the basic qualifications for senior management positions set by the China Banking and Insurance Regulatory Commission, Compliance Officers should also have the following qualifications: (1) Bachelor's degree or higher; (2) Over six years of experience in finance with at least three years in legal compliance work, or over six years of experience in legal compliance work with at least three years in finance, or over six years of experience in finance with a legal professional qualification certificate; (3) Other conditions prescribed by the China Banking and Insurance Regulatory Commission. Article 18 The Chief Compliance Officer is responsible for the compliance management of the institution and its staff, performing the following compliance management responsibilities: (1) Responsible for the compliance management of the institution, organizing and promoting the construction of the compliance management system, supervising the performance of the compliance management department and compliance positions, and ensuring strict implementation of compliance norms within the institution; (2) Organize and promote the establishment of compliance management systems, compliance reviews, compliance inspections and evaluations, handling of significant compliance incidents, compliance assessments, problem rectifications, and team development to ensure the orderly operation of compliance management work; (3) Report regularly to the regulatory authorities as required; (4) Other compliance management responsibilities. Article 19 If there are significant changes in laws, regulations, departmental rules, and normative documents, the Chief Compliance Officer shall promptly organize and supervise the relevant departments and subordinate institutions to evaluate the impact of the changes on compliance management, revise internal norms, and ensure implementation. Article 20 The Chief Compliance Officer should organize the compliance management department to conduct compliance reviews of the institution's development strategies, important internal norms, important new products and new business schemes, major decision-making matters, and provide written compliance review opinions. If the China Banking and Insurance Regulatory Commission and its delegated institutions require the Chief Compliance Officer to conduct compliance reviews of materials or reports submitted by financial institutions, the Chief Compliance Officer should organize the review and sign the compliance review opinions on these materials or reports. Other relevant senior executives should be responsible for the truthfulness, accuracy, and completeness of the basic facts and business data in the materials or reports. If the compliance review opinions of the Chief Compliance Officer are not adopted, the financial institution shall submit the matter to the Board of Directors for approval, and major matters shall be reported promptly to the regulatory authorities. Article 21 The Chief Compliance Officer should, in accordance with the requirements of the China Banking and Insurance Regulatory Commission and its delegated institutions and internal norms of financial institutions, organize or require relevant internal departments to supervise the compliance of the institution's business management and staff performance. Internal departments and their employees should actively cooperate with the Chief Compliance Officer in carrying out their work. Article 22 If the Chief Compliance Officer discovers significant illegal or non-compliant behavior or major compliance risks of financial institutions and their staff, they should promptly report to the Board of Directors, Chairman of the Board, and the President (General Manager), propose handling measures, and urge rectification. If the Chief Compliance Officer discovers other illegal or non-compliant behavior or compliance risk hazards of financial institutions and their staff, they should, in accordance with the internal compliance management procedures of the institution, organize and supervise the timely reporting, handling, and rectification of the institution. The Chief Compliance Officer has the right to propose recommendations to the Board of Directors, senior management, relevant departments, and subordinate institutions regarding related responsibilities.Recommendations for implementing measures such as salary deductions, job adjustments, demotions, etc. on personnel, and urge responsible agencies and individuals to make timely corrections. Serious illegal acts or major compliance risks mainly include: large fines or confiscation of a large amount of illegal gains; compliance risk events that cause or may cause significant financial loss or significant reputational damage to institutions, legal disputes, criminal cases, etc. Article 23 If a financial institution has committed serious illegal acts or major compliance risks, it shall promptly report to the China Banking and Insurance Regulatory Commission or its branch office. If the Chief Compliance Officer finds that the institution has not reported as required, he/she shall urge the institution to report in a timely manner and may directly report to the China Banking and Insurance Regulatory Commission or its branch office. Article 24 The compliance officers of provincial branches or primary branches of financial institutions are responsible for compliance management of their respective institutions and employees, with specific responsibilities determined by reference to the responsibilities of the Chief Compliance Officer. Article 25 The Chief Compliance Officer and compliance officers shall promptly organize the handling of compliance management matters required by the China Banking and Insurance Regulatory Commission and its branch offices, track, urge, assess the implementation of regulatory opinions and requirements. Article 26 When departments, subordinate institutions, or employees of a financial institution discover significant illegal acts or major compliance risks, they shall promptly report to the compliance management department of their respective institutions. Branches with compliance officers shall report to the compliance officer of their respective institutions in a timely manner. If the Chief Compliance Officer or compliance officer discovers concealment or omission of significant illegal acts or major compliance risks by departments, subordinate institutions, disciplinary actions shall be taken against responsible departments and individuals through internal compliance assessments, without any praise or rewards, and internal accountability shall be promptly pursued. Article 27 The head office of a financial institution, provincial branches or primary branches, and all levels of financial subsidiaries under consolidation management should in principle establish independent compliance management departments. Financial institutions should establish compliance management departments in other branches based on business scale, organizational structure, and compliance management needs. Branches that do not meet the conditions for establishing a compliance management department should, in principle, establish compliance positions that meet the needs of that branch. If branches do not have the conditions to establish compliance management departments or positions, the compliance management responsibilities of the branch shall be performed by the compliance management department or position of the supervisory institution. Article 28 The compliance management department of a financial institution is responsible for leading compliance management work, performing the following duties: (1) Formulating basic compliance management systems and annual compliance management plans for the institution, organizing and coordinating the formulation of compliance-related systems by various departments and subordinate institutions, and promoting their implementation; (2) Providing legal compliance support for the institution's business activities, new product and business development, reviewing important internal regulations of the institution, and timely proposing suggestions for formulation or revision; (3) Leading the implementation of compliance reviews, compliance inspections, evaluations, compliance risk monitoring, and compliance event handling, and promoting strict compliance with compliance norms; (4) Organizing or participating in compliance assessments, organizinAudit, establish effective communication mechanism with compliance management department.Article 36 All employees of financial institutions shall comply with the compliance norms related to their duties, actively identify and control compliance risks in their duties, actively cooperate with financial institutions and regulatory authorities in compliance management, and take responsibility for the compliance of their duties. Chapter III Compliance Management Guarantee Article 37 Financial institutions shall provide sufficient protection for the Chief Compliance Officer, compliance officers, and compliance management departments to perform their duties, and grant relevant personnel and departments the right to express dissenting opinions. Shareholders, directors, and senior management of financial institutions shall not violate their duties and procedures, interfere with the Chief Compliance Officer or compliance officers in conducting their compliance work in accordance with the law. Directors, senior management, departments, subsidiaries, and employees of financial institutions shall support and cooperate with the Chief Compliance Officer, compliance officers, compliance management departments, and compliance management personnel in their work, and shall not restrict or obstruct the Chief Compliance Officer, compliance officers, compliance management departments, and compliance management personnel from performing their duties for any reason. Article 38 Financial institutions shall provide compliance management departments with sufficient compliance management personnel with professional knowledge and skills suitable for performing compliance management responsibilities. Compliance management departments should mainly be composed of personnel with a background in legal or economic and financial professions. Personnel who are first engaged in legal compliance review of institutional contracts, and personnel who provide legal compliance opinions for major matters such as institutional restructuring, mergers and acquisitions, listings, property rights transfers, bankruptcy reorganization, settlement, etc., should ideally have a legal background or have passed the legal professional qualification examination. Article 39 Different departments and subsidiaries of financial institutions shall be equipped with full-time or part-time compliance management personnel that match the business scale and the difficulty of risk control. Overseas financial branches and overseas financial subsidiaries should be equipped with compliance management personnel familiar with the laws and regulations of the jurisdiction and related banking and insurance business. In countries and regions with higher compliance risks, dedicated compliance management personnel should be increased to effectively prevent and respond to compliance risks. Article 40 Financial institutions shall ensure the independence of the compliance officer's reports, implement dual-reporting systems, mainly reporting to the Chief Compliance Officer, and report to the head of the institution at the same level. Article 41 Financial institutions shall ensure that the Chief Compliance Officer, compliance officers, compliance management departments, and personnel have the right to information and investigation needed to perform their duties. The Chief Compliance Officer and compliance officers have the right to attend meetings, review relevant documents and information, and so on as needed to perform their duties. Financial institutions should inform the Chief Compliance Officer in advance of important meetings such as board of directors meetings and operational decision-making meetings. The Chief Compliance Officer and compliance officers have the right to query and collect evidence from relevant departments or subsidiaries and request explanations from relevant personnel of financial institutions on relevant matters. They can also inquire with external auditing and legal service intermediaries for information. Article 42 Financial institutions shall ensure the independence of the Chief Compliance Officer, compliance officers, and decide to dismiss them with legitimate reasons. Legitimate reasons include the Chief Compliance Officer or compliance officer applying for dismissal, being ordered to be replaced by the China Banking and Insurance Regulatory Commission or its delegated institutions, or evidence proving their inability to perform their duties, failure to diligently fulfill their duties, etc. Article 43 Financial institutions shall establish a compensation management mechanism for the Chief Compliance Officer, compliance officers, and compliance management personnel. If the Chief Compliance Officer performs well, their annual income should generally not be lower than the average level of senior management personnel under similar conditions (same position level, same assessment results). For compliant compliance officers and management personnel, their annual income should generally not be lower than the average level of personnel in the same position under similar conditions in the institution. If the state has other regulations on salary standards for state-owned financial enterprises, those should be followed. Financial institutions shall establish an assessment management system for the Chief Compliance Officer, compliance officers, compliance management departments, and full-time compliance management personnel. Except for the main person in charge of the institution, assessment methods that are unfavorable to compliance independence, such as evaluating senior management personnel who are not responsible for the compliance management department, evaluating from other departments, or basing it on the business performance of the business department, should not be used. Compliance work that requires the coordination of various departments should not be used as a separate assessment indicator for the compliance management department. Article 44 Financial institutions shall establish a compliance work assessment system, include the quality and effectiveness of compliance management in the assessment of internal departments and subsidiaries, and include compliance management in the annual comprehensive assessment of responsible persons of subsidiaries. Financial institutions shall strengthen the use of assessment results, and use the performance of compliance responsibilities as an important basis for employee assessments, personnel appointments, evaluation, and outstanding work. Article 45 Financial institutions shall strengthen the informatization construction of compliance management, embed compliance requirements and business control measures into processes using information technology, strengthen compliance reviews at key points, and enhance process control. Article 46 Financial institutions shall establish a compliance training mechanism, formulate an annual compliance training plan, increase training efforts for institution employees, make compliance management a compulsory content for initial and key compliance risk position training for directors, senior management personnel, and new employees, and continuously improve employees' compliance awareness. Chapter IV Supervision and Legal Responsibility Article 47 The China Banking and Insurance Regulatory Commission (CBIRC) and its delegated institutions shall supervise and inspect the compliance management work of financial institutions, and consider the implementation of compliance management work by financial institutions as an important basis for comprehensive evaluation. Article 48 According to the needs of performing their duties, the CBIRC and its delegated institutions may conduct regulatory discussions with directors and senior management personnel of financial institutions, and require explanations on major compliance management matters from directors and senior management personnel of financial institutions. Article 49 If financial institutions fail to timely report major illegal activities or major compliance risks, or fail to provide compliance management materials as required, the CBIRC or its delegated institutions shall handle them in accordance with relevant regulations such as the Banking Supervision and Management Law of the People's Republic of China, the Commercial Bank Law of the People's Republic of China, and the Insurance Law of the People's Republic of China. Article 50 If financial institutions engage in illegal activities, the CBIRC or its delegated institutions shall investigate and deal with them in accordance with the law.The General Administration or its dispatched agencies shall order to rectify within a time limit, and may explicitly require financial institutions to establish a full-time chief compliance officer or compliance officer, strengthen the deployment of compliance management personnel, and transfer the compliance management responsibilities of financial institutions' subordinate agencies. If a financial institution fails to complete the rectification on time, the State Administration of Financial Supervision and its dispatched agencies may impose administrative penalties or other regulatory measures based on the severity of the situation.Article 51 If directors or senior management fail to fulfill their duties diligently, resulting in significant illegal activities or major compliance risks in financial institutions, the China Banking and Insurance Regulatory Commission or its dispatched agencies shall impose administrative penalties or other regulatory measures in accordance with relevant laws and regulations; if there is suspected criminal activity, they shall be transferred to the supervisory authorities or public security authorities. Article 52 If financial institutions or their staff violate the provisions of these measures, and there are legal responsibilities stipulated by laws and administrative regulations, the relevant provisions of laws and administrative regulations shall apply; if there are no such provisions in laws and administrative regulations, the China Banking and Insurance Regulatory Commission and its dispatched agencies may issue warnings, criticisms, fines of up to 100,000 yuan to the financial institutions, their directors, senior management, and other directly responsible personnel; if the violations jeopardize financial security and have adverse consequences, warnings, criticisms, fines of up to 200,000 yuan can be imposed. Article 53 If the chief compliance officer or compliance officer violates these measures, causing significant illegal activities or major compliance risks in financial institutions, the China Banking and Insurance Regulatory Commission and its dispatched agencies may order the financial institutions to adjust the chief compliance officer or compliance officer in addition to imposing administrative penalties or other regulatory measures; if there is suspected criminal activity, they shall be transferred to the supervisory authorities or public security authorities. Article 54 Financial institutions that actively discover illegal activities or compliance risks through effective compliance management, handle them properly, implement accountability, improve internal control systems and business processes, and meet statutory requirements, may be subjected to lighter or mitigated measures by China Banking and Insurance Regulatory Commission and its dispatched agencies in accordance with the law; if violations are minor and promptly corrected without causing detrimental consequences, or only violated internal regulations, no responsibility shall be pursued. If the chief compliance officer or compliance officer, compliance management department, or compliance management personnel of financial institutions have fulfilled their duties in accordance with these measures, no responsibility shall be pursued. Chapter Five Supplementary Provisions Article 55 Financial holding companies, rural cooperative banks, rural credit cooperatives, branches of foreign banks, branches of foreign reinsurance companies, and other financial institutions supervised by the China Banking and Insurance Regulatory Commission and its dispatched agencies shall follow the industry characteristics and regulatory requirements. Article 56 Before these measures are implemented, the designated chief compliance officer, compliance director, compliance officer, and general counsel serving as senior management personnel by financial institutions and their provincial branches or primary branches may perform the duties of chief compliance officer and compliance officer as stipulated by these measures. Prior to the transfer of the above personnel, they are not subject to the conditions for holding office as stipulated by these measures, and do not need to re-obtain the qualifications approved by the China Banking and Insurance Regulatory Commission or its dispatched agencies. Article 57 The terms "above" and "below" in these measures include the specified number. Article 58 These measures shall be interpreted by the China Banking and Insurance Regulatory Commission and shall be implemented from March 1, 2025, with a transition period of one year from the date of implementation. Non-compliance with these measures should be rectified within the transition period. The "Guidelines for Compliance Risk Management in Commercial Banks" (CBRC [2006] No. 76), the "Measures for Compliance Management of Insurance Companies" (CIRC [2016] No. 116), and the "Notice on Strengthening Compliance Management in Insurance Companies" (CIRC [2016] No. 38) issued by the China Insurance Regulatory Commission are simultaneously abolished. In case of inconsistency with other departmental regulations or normative documents, these measures shall prevail. This article is selected from the "Official Website of the China Banking and Insurance Regulatory Commission"; edited by GMTEight: Xu Wenqiang.