Tougher finance rules eyed
By Hu Xiaocen |
March 5, 2013, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S banking regulator will unveil tougher regulations to monitor and standardize the sale of financial products that could cause financial losses and risks to investors, sources told Shanghai Daily yesterday.
The rules proposed by the China Banking Regulatory Commission's Shanghai Office will cover bank wealth management products, investment-related insurance policies, and private equity investment products, according to a notice by the local regulator which is seeking opinions from major domestic and foreign banks over the proposal.
"The draft caused quite a stir among the banks because some of the rules are hard to implement, and others involve high costs and are very time consuming for the banks," said the source.
The local regulator will start investigating a product after getting 10 complaints from the public.
For non-principal guaranteed products, clients have a grace period to consider if they wish to cancel their investments - a first in the industry. Banks will also be required to inform clients after the sale to confirm they are aware of risks such as loosing the principal.
For financial products in general, banks will have to hire third parties to check with customers that product information disclosure and risk assessment were properly done by bank staff during the sales pitch.
The CBRC has ordered commercial banks to conduct internal checks of branches and employees to prevent unauthorized sales of financial products to the public.
The rules proposed by the China Banking Regulatory Commission's Shanghai Office will cover bank wealth management products, investment-related insurance policies, and private equity investment products, according to a notice by the local regulator which is seeking opinions from major domestic and foreign banks over the proposal.
"The draft caused quite a stir among the banks because some of the rules are hard to implement, and others involve high costs and are very time consuming for the banks," said the source.
The local regulator will start investigating a product after getting 10 complaints from the public.
For non-principal guaranteed products, clients have a grace period to consider if they wish to cancel their investments - a first in the industry. Banks will also be required to inform clients after the sale to confirm they are aware of risks such as loosing the principal.
For financial products in general, banks will have to hire third parties to check with customers that product information disclosure and risk assessment were properly done by bank staff during the sales pitch.
The CBRC has ordered commercial banks to conduct internal checks of branches and employees to prevent unauthorized sales of financial products to the public.
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