Notice of China Banking Regulatory Commission on the Issuance of “The Financing Guarantee Agency  Major Risk Event Reporting System"

The provinces, autonomous regions, municipalities directly under the central government, the financing guarantee agency regulatory department: 

 

    " The financing guarantee agency major risk event reporting system" has been examined and approved by financing guarantee business supervision joint inter-ministerial conference ( hereinafter referred to as joint inter-ministerial conference) on July 23, 2010, and is issued to you and hereby the related matters are notified as followings: 

    Firstly, the local regulatory departments need to conscientiously implement “The financing guarantee agency major risk event reporting system ", pay high attention to the major risk events reporting work. According to the regulations and local actual situation, formulate a significant risk event reporting mechanism, emergency management mechanism and accountability mechanism implementation plan. To strengthen organization and leadership to ensure that the relevant works go into effect. The main responsible person of local regulatory departments is the first responsibility person for the their respective jurisdiction of the financing guarantee agency major risk events reporting and emergency management.

    Secondly, the local regulatory departments need to further improve major risk events reporting and emergency management. timely, accurately, comprehensively report the major risk events, immediately start a contingency plan, systematically allocate resources, in conjunction with the relevant departments to establish coordination and disposal mechanism for major risk events, properly handle all kinds of major risk events, and earnestly safeguard the financial order and social stability, resolutely avoiding the occurrence of systemic risk.  

    Thirdly, local regulatory departments need to forward this notice to all their financing guarantee mechanisms, and ensure the supervision and inspection implement these instructions.
 

September  6, 2010

The Financing Guarantee Agency Major Risk Events Reporting System

Article 1 To timely grasp the financing guarantee agency major risk events conditions, to strengthen the major risk events emergency management, to prevent the major risk events from impacting on the financing guarantee industry, to avoid single risk
transferred into systematic risk, and according to the" Interim Measures for the administration of financing guarantee companies", to develop this system.  

Article2 The term of the regulatory departments in this guideline is the departments which are defined by the province, autonomous region, municipality directly under the Central People's government to determine the responsible for the supervision and management of the local financing guarantee agencies. 

Article 3 The term of the financing guarantee agency in this guideline is the institutions that legally established the corporate system institutions of the financing guarantee business and the corporate system outside of the guarantee agencies and their
branches. 

Article 4 The term of the major risk events in this guideline is the events that may seriously endanger normal operation of the financing guarantee agencies, solvency and credit level, and effect the local the financial order and social stability. 

Article 5 The financing guarantee agency major risk events reporting and emergency management is executed according to local management. Regulatory departments are in charge of local financing guarantee agency major risk events reporting and
emergency management. 

Article 6 Regulatory departments need to establish major risk event reporting mechanism, emergency management mechanism and accountability mechanism with clear responsible structure, clear reporting route, and timely and effective reaction. 

The main responsibility of the Supervision department is the responsibility for their regional financing guarantee agency major risk events reporting and emergency management; the supervision department shall designate a person to be in charge of receiving and reporting the major risk events reported as well as emergency management. 
Article 7 The financing guarantee agency need to briefly report to the regulatory departments while the major risk events happened, and report the details within 24 hours. The financing guarantee agency need to report the significant risk events including the followings: 

(1)  Mass events triggered by the financing guarantee agencies;

(2)  The financing guarantee agency occurs guarantee fraud, and the amount of guarantee compensation or investment losses may reach more than 5% of its net assets;

(3)  The financing guarantee agencies’ major debts maturity is unpaid which causes its liquidity difficulties, or have been unable to discharge the due debt;

(4)  The main assets of financing guarantee agency was confiscated, seized or frozen; 

(5)  The financing guarantee agency is investigated by executive authority and judicial organs due to the violation of laws and rules;

(6)  Found that the main investor financing guarantee agency had fraudulent investment, capital flight or the main investor made other significant adverse effects to company;

(7)  Within 3 months, more than half the board of directors, board of supervisors or senior managers of the financing guarantee agency have resigned;

(8)  The financing guarantee agency responsible are missing, premature death or loss of capacity for civil conduct, or taken enforcement measures by judicial organs;

(9)  Other conditions required being reported by supervision department. 

Article 8 Supervision department shall timely make judge on the nature of the financing guarantee agency significant risk events, all changes and risk degree occurred under their respective jurisdiction, shall report the major risk events that may have an impact on the financial order and social stability, within 24 hours since it occurs, to the provinces, autonomous regions, municipalities directly under the central government and the joint conference. Supervision department should report the significant risk events including the followings: 
(1)  The mass events triggered by the financing guarantee agencies;

(2)  The financing guarantee agencies' registered capital is more than 50 Million RMB, or financing guarantee liability balance is 500 Million RMB, and which is bankruptcy, dissolution or revoked;

(3)  The financing guarantee agency has significant security fraud, guarantee compensation or investment losses occurred, which may threaten the financial order or trigger systematic risk;

(4)  The other conditions may endanger the financial order; influence society is stable or triggers systematic risk. 

The contents of the report include brief outline of the significant risk, the possible risks, have been taken and proposed emergency measures. 

Article 9 Regulatory departments need to report the overall disposition of events to provinces, autonomous regions and municipalities and joint conference within 20 working days since major risk events which are listed in Article 8 as disposed. 
Article 10 Regulatory departments need, on the basis of this system, and the local actual situation, to establish a major emergency risk emergency management mechanism. 

Regulatory departments need to formulate the sudden major risk emergency management plan, clear emergency management duties, emergency management measures and emergency management procedures, timely and effectively dispose of major unexpected risk event, protect the creditors and other stakeholders’ legitimate rights and interests, effectively maintain social stability, to prevent the occurrence of systemic risk. 

Article 11 Regulatory departments need to work together with relevant departments to establish the financing guarantee agency significant risk events coordinated disposal mechanism, to ensure the timely, effective disposal when the financing guarantee agency significant risk events occurs in their respective area. 

Article 12 The major risk events, that may effect the regional financial order and social stability, regulatory departments need to be timely, accurately disclose to them, in accordance with the laws, regulations and the relevant provisions of the disclosure of government information system. 

Article 13 Regulatory departments need to set up the financing guarantee agency significant risk events reporting and emergency management accountability system, and take proceedings against the financing guarantee agency and the main responsible person which deliberately delay, conceal, and falsely report the real situation. 

Article 14 The system shall come into force upon circulation.