Dong Ximiao'S Column: Promoting The Orderly And Compliance Of Product Sales Of Financial Management Subsidiaries Of Banks

Dong ximiao (chief researcher of China Zhaotong Federation of finance, researcher of think tank of Asian Financial Cooperation Association)

On December 25, the China Banking and Insurance Regulatory Commission announced the Interim Measures for the sale and management of financial products of financial subsidiaries of commercial banks (Draft) (hereinafter referred to as the measures) for public opinions. The measures strengthen the regulatory norms of financial product sales institutions and conduct, clarify the relationship and responsibility of financial management subsidiaries, agency sales agencies and investors, so as to meet the needs of changes in the legal relationship of financial products sales after the establishment of financial management subsidiaries, which will help to further improve the system and rules system of bank financial management subsidiaries, better protect the legitimate rights and interests of investors, and promote The healthy and sustainable development of financial management subsidiaries and financial services.

As an important participant in asset management industry, financial subsidiaries of commercial banks have attracted much attention. In April 2018, the guiding opinions on standardizing asset management business of financial institutions (new asset management regulations) was officially announced, laying the foundation and pointing out the direction for the steady development of asset management business in China. As a supporting system of the new asset management regulations, in September 2018, the China Banking and Insurance Regulatory Commission (CIRC) promulgated the measures for the supervision and management of financial management business of commercial banks (the new regulations on financial management); in December of the same year, it promulgated the measures for the management of financial management subsidiaries of commercial banks (the measures for financial management subsidiaries).

In the month when the measures for financial subsidiaries were issued, the CBRC approved the application for the establishment of financial subsidiaries by Bank of China and China Construction Bank, which opened the prelude to the approval of financial subsidiaries. So far, more than 40 banks, including all large commercial banks, joint-stock commercial banks, some urban commercial banks and rural commercial banks, have put forward plans to set up financing subsidiaries, of which 22 have been approved for construction. At present, 19 financial subsidiaries of banks have been opened. In addition, the CBRC has approved the establishment of two foreign-owned financial management companies, one of which has opened business.

The new regulations on asset management provide in principle for financial institutions to issue and sell asset management products, and put forward the requirements of "understanding products" and "understanding customers". The new financial regulation has a special section on "sales management", which provides detailed provisions on the promotion, subscription, redemption and other business activities of bank financial products as well as the appropriateness management of investors. The measures for financial management subsidiaries put forward some requirements on risk assessment, sales management and agency of financial products of financial subsidiaries. However, the above rules and regulations on the sales management of financial products are more general and scattered, and there are deficiencies in comprehensiveness, applicability and operability. This time, the "measures" have thoroughly implemented the new regulations on asset management, new regulations on financial management and the measures for financial management subsidiaries, fully drawing on the mature regulatory standards and practical experience of domestic foreign-funded product sales, and aiming at the characteristics of bank financial management subsidiaries, it has made detailed provisions on the sales organization, sales channels, publicity and sales text, and sales personnel management of financial products, Clear responsibility, strengthen the standard, make up the system blank of financial products sales management of financial subsidiary. The relevant provisions of the measures are specific and detailed, with strong pertinence and operability, which are conducive to the implementation of financial institutions and the understanding of investors.

There are 69 articles and eight chapters in the measures, which are more than 13000 words. It mainly strengthens the management from four aspects and clarifies the requirements, which creates a good institutional environment for the development of financial management market and the protection of investors.

One is to clarify the sales responsibilities of financial subsidiaries and sales agencies. The financial management subsidiary of a bank is the design and issuer of financial products, whose main responsibility is to clarify "what product is", "who will sell" and "how to manage the seller"; the main responsibility of sales agency for investors is "what product to sell", "whom to sell" and "how to sell". Both should jointly undertake the compliance sales of financial products and the protection of investors' legitimate rights and interests Duty of protection. At the same time, the measures put forward the requirements for due diligence of institutions and products respectively.

The second is to clarify the requirements for financial products sales. When selling financial products through business outlets, sales agencies should implement the management of special sales area of financial products, and record and record the sales process of each financial product. If financial products are sold through electronic channels, sales agencies also take measures to record key sales links and ensure that the requirements of retrospective inspection and verification and evidence collection can be met. At the same time, 18 prohibitive acts of sales agencies and sales personnel are stipulated, such as misleading sales and selling "flying orders" privately.

The third is to standardize sales personnel and promote sales text management. In the aspect of sales staff management, the requirements are put forward from the two levels of organization and staff. No one is allowed to engage in the sales of financial products without qualification confirmation and labor contract signing. At the same time, sales agencies publicize the relevant information for investors to check and verify. In the aspect of propaganda and sales text management, we should strengthen the centralized and unified management responsibility, clarify the main body of production and distribution, authorization management and authorized preparation, and clarify the rights and obligations and responsibilities of all parties.

Fourth, further strengthen the protection of investors' legitimate rights and interests. Adhere to the organic unity of "seller's responsibility" and "buyer's responsibility", while compacting the responsibilities of relevant institutions, we should also clarify the obligations of investors and information confirmation, promote orderly breaking rigid cashing, and protect the legitimate rights and interests of all parties. At the same time, we should strengthen the comprehensive registration of information, rely on the banking financial management registration and custody center, strengthen the matching and registration of sales process information, facilitate investors to query and verify through authoritative channels, and prevent counterfeit institutions and personnel from selling false financial products.

According to Article 27 of the measures for financial management subsidiaries, financial subsidiaries can sell financial products through banking financial institutions that absorb public deposits or other institutions recognized by regulatory authorities. However, according to the new regulations on financial management, commercial banks can only sell financial products through their own channels, or sell financial products through other banking financial institutions that absorb public deposits. This is the first time that the sales scope of financial products of financial subsidiaries has been extended to the banking financial institutions that absorb public deposits in the "measures for financial subsidiaries", which has aroused market attention. Whether large Internet platforms and other professional institutions can become "other institutions" recognized by the regulatory authorities and obtain the qualification to sell financial products as agents has become the focus of attention. However, the "measures" make it clear that at this stage, only financial subsidiaries and banking financial institutions that absorb public deposits are allowed to act as sales agents, and Internet platforms and other professional institutions are not yet able to obtain the qualification for consignment sales.

Under the circumstances that the financial management subsidiary is just starting, the market recognition is not high, and the education of investors needs to be strengthened, the measures are relatively cautious about the agency sales of financial products, and it is necessary and appropriate to maintain the continuity and stability of the sales system of financial products, which helps investors to distinguish better and is also a kind of protection for investors Protect. Of course, this will make the financial products of financial subsidiaries have a certain gap with public funds in the scope of sales agencies. For some young investors, if they can't easily purchase the products of financial subsidiaries from Internet channels, their willingness to invest in the products of financial subsidiaries may also be affected. However, the measures have reserved institutional space. According to the transformation and development of bank financial products, the CBRC will expand the scope of financial products sales agencies to other financial institutions and professional institutions.