China Net Finance, January 2 Recently, the State Administration of Financial Supervision issued a news that in order to further improve the operational risk supervision rules of banking and insurance institutions and improve the level of operational risk management of banking and insurance institutions, the State Administration of Financial Supervision has revised the "Guidelines for Operational Risk Management of Commercial Banks" to form the "Measures for the Management of Operational Risk of Banking and Insurance Institutions" (hereinafter referred to as the "Measures"), which is now officially released and will come into force on July 1, 2024.
The Measures consist of six chapters and 52 articles and appendices, adhering to the principles of prudence, comprehensiveness, matching and effectiveness, and the main contents include: First, clarifying risk governance and management responsibilities. Clarify the responsibilities of the board of directors, supervisors (boards) and senior management, define the specific scope and responsibilities of the three lines of defense, and consolidate the operational risk management responsibilities of branches and subsidiaries. The second is to stipulate the basic requirements for risk management. It is clarified that banking and insurance institutions shall establish a basic system for operational risk management, operational risk appetite and transmission mechanism, establish and improve the management information system for operational risk, and cultivate a good operational risk management culture. The third is to refine the management process and management tools. Banking and insurance institutions are required to manage the whole process of operational risks. It stipulates the basic requirements for operational risk control and mitigation measures such as internal control, business continuity management, network security, data security, and business outsourcing management, establishes a reporting mechanism for operational risk situations and major operational risk events, and applies three basic management tools and new tools, such as the operational risk loss database. Fourth, improve supervision and management responsibilities. The State Administration of Financial Supervision and its dispatched agencies shall inspect and assess the soundness and effectiveness of the operational risk management system of banking and insurance institutions, and industry associations shall play a self-discipline and service role. Fifth, the meaning of some provisions is explained and examples are given in the appendix of the Measures, so as to facilitate the implementation of banking and insurance institutions.
As of the date of implementation of the Measures, the Guidelines for Operational Risk Management of Commercial Banks (Yin Jian Fa 2007 No. 42) and the Notice of the China Banking Regulatory Commission on Strengthening the Prevention of Operational Risks (Yin Jian Fa 2005 No. 17) shall be repealed.
In the next step, the State Administration of Financial Supervision will strengthen supervision and guidance, do a good job in the implementation of the Measures, and guide banking and insurance institutions to improve their operational risk management capabilities.