To all CBRC local offices, policy banks, state-owned commercial banks, joint-stock commercial banks and the Postal Savings Bank,
 
In order to establish a communication platform for banking derivatives activities, improve the efficiency of supervision on banking derivatives business, and promote the healthy development of the business in China, the CBRC decides to establish an Information Exchange & Business Coordination Mechanism for Banking Derivatives Activities (hereinafter referred to as the Mechanism). The following is notified:
 
1.      The Mechanism is a kind of supervisory coordination arrangement, which is set up in accordance with the principle-oriented supervisory concept to facilitate the research and development of banking derivatives activities, improve the bank’s understanding of supervisory policies, and promote the communication among banks. It will include two types of meetings, namely “senior executives meeting” and “working level meeting”. The consensus reached at the meetings will be adopted into relevant supervisory policies.
 
2.      The Mechanism is organized by the CBRC, and participated by banking institutions that are approved to trade in derivatives (hereinafter referred to as “member banks”). Those who have not yet been approved to engage in the business may opt in on a voluntary basis.
 
3.      The “senior executives meeting” is mainly attended by vice presidents (or the equivalent senior executives) in charge of derivatives business in member banks to exchange views and hold discussion on significant issues that need to be coordinated when developing banking derivatives activities. The meeting shall be held in principle on a quarterly or semi-annual basis, or be called when deemed necessary.
 
4.      The “working level meeting” is mainly attended by the heads of the derivatives business departments of the member banks to exchange views and hold discussions on issues to be coordinated with respect to operations, techniques, and information sharing in the area of banking derivatives business. The meeting shall be held in principle every month or every 2 months, or be called when deemed necessary.
 
5.      The two meetings may be called as one when deemed necessary where topics are concerned.
 
6.      A theme shall be set for each meeting including but not be limited to the followings:
a)    Business innovation of banking derivatives
b)    Market prospects for banking derivatives business
c)    Risk management of banking derivatives business
d)    Infrastructure construction for the development of banking derivatives business
e)    Assessment of supervisory policies on banking derivatives business
f)    International experiences on derivatives business research and risk control
g)    Other issues requiring supervisory coordination
 
7.      The CBRC Supervisory Cooperation Department for Banking Innovation is responsible for the organization of the meetings. It should collect or entrust a member bank to collect topics from member banks in advance, and convene the meeting with all participant members and topics being assured.
 
8.      The related persons, specialists and experts from the CBRC departments and local offices, the People’s Bank of China (PBC), China Securities Regulatory Commission (CSRC), China Insurance Regulatory Commission (CIRC), State Administration of Foreign Exchange (SAFE), China Foreign Exchange Trade System, China Government Securities Depository Trust & Clearing Co. Ltd Company etc. will attend the meeting where topics are concerned.
 
9.      The banking institutions that are approved to conduct derivatives activities shall submit within 10 days the following documents to the CBRC’s Supervisory Cooperation Department for Banking Innovation:
a)  Resume of the vice president (or the equivalent senior executive) in charge of derivatives business, including education background and professional experiences;
b)  Resume of the department head responsible for derivatives activities, including contact information, education background and professional experiences;
c)  Resume of contact persons for the Mechanism (one trader and one risk control officer in derivatives business), including contact information, education background and professional experiences.
When the aforementioned persons change, related information shall be renewed immediately.
 
10.     This notice shall apply to the banking institutions approved to conduct derivatives business after the issuance of this notice. Such institutions shall submit aforementioned documents in clause 9 within 10 days after receiving the approval.
 
11.     This notice shall apply to foreign-funded banks in China, city commercial banks, rural commercial banks, rural cooperative banks, and other banking institutions. If the main reporting branch of a foreign-funded bank joins in the Mechanism, the contact person shall be from the main reporting branch.
 
Each CBRC office shall distribute this Notice to all banking institutions within its jurisdiction.
 
Atts: Application Form
 
7th June 21, 2007