On July 23, the People’s Bank of China reported that in order to further regulate the reporting of major issues by non-bank payment institutions, the Central Bank formulated and issued the “Measures for the Management of Major Issue Reports by Non-bank Payment Institutions” (hereinafter referred to as the “Measures”).
It is reported that the “significant matters” mentioned in these Measures refer to major business matters that should be reported in advance in accordance with laws and regulations and the provisions of the People’s Bank of China, as well as those that may affect payment institutions (including branches) themselves, financial consumer rights, financial and financial Matters that have a major impact on social stability and should be reported afterwards.
“Daily Economic News” reporter noted that the measures clearly define the scope of major issues. For example, the following matters of a payment institution should be reported to the local branch of the People’s Bank of China in advance: including the payment institution’s proposed initial public offering or additional stock issuance; the main investor or actual controller of the payment institution’s proposed initial public offering of stocks, including but not It is limited to those who directly act as the main body of the initial public offering of stocks, or go abroad for the initial public offering of stocks through an agreement control structure, etc.; the foreign investment exceeds 5% of the net assets, etc.
Wang Pengbo, senior financial analyst at Broadcom Consulting, said in an interview: “This is the central bank’s deepening of the management of payment institutions, from the business level to the corporate governance level. The payment industry is a national basic industry, and payment institutions are actually very responsible. Therefore, when important events are involved, the central bank, as the supervisory authority, has the right to grasp the actual situation as soon as possible, so as to avoid unnecessary major losses.”
Reportable foreign investment exceeding 5% of net assets
It is worth noting that the report clearly defines the scope of major issues. The following matters of the payment institution shall be reported to the local branch of the People’s Bank in advance:
(1) The payment institution intends to issue an initial public offering or additional stock issuance.
(2) The main contributor or actual controller of a payment institution intends to issue shares for an initial public offering, including but not limited to directly acting as the main body of the initial public offering, or going abroad for an initial public offering of shares through an agreement control structure, etc.
(3) Providing payment innovative products or services, cooperating with overseas institutions to carry out cross-border payment business, and carrying out major business cooperation with other institutions.
(4) A payment institution intends to invest overseas to establish a branch, a holding subsidiary, or an affiliate that can be actually controlled through an agreement or other arrangements to conduct payment business.
(5) Payment institutions and their actual controllers and main investors intend to mortgage, pledge, custody or mortgage in disguise, pledge the equity of the payment institution or important assets exceeding 10% of the net assets.
(6) The accumulated effective guarantees provided to outsiders exceed 30% of the net assets.
(7) Foreign investment exceeds 5% of net assets.
(8) Major adjustments to payment business facilities may have a major impact on payment business, including but not limited to changes to the system application architecture or important versions, relocation of the production center computer room or disaster recovery computer room, etc.
(9) It is proposed to change the accounting firm and other key external cooperative institutions, which may affect the goodwill of the payment institution or the quality of external auditing and testing.
(10) Other matters that should be reported in advance as required by the People’s Bank of China.
Wang Pengbo said that from the content point of view, more detailed regulations have been made on the scope and reporting procedures of major matters, such as foreign investment exceeding 5% of net assets; information security incidents such as the leakage of customer personal information involve customer information at one time. The data exceeds 5000 or the number of customers exceeds 500.
He further stated that in fact, major changes related to payment institutions had to be reported regularly, including operating conditions and external cooperation, as well as problems that may arise in business, etc. This regulation also provides a basis for corresponding penalties in the future.
Personal information leakage, business interruption due to emergencies, etc. must be reported
It is worth noting that Article 6 of the Measures states that payment institutions shall report in a timely manner in accordance with the relevant regulations of the People’s Bank of China and the requirements of these Measures in the event of risk events or emergencies. Subsequent reports are divided into first-category items and second-category items.
Among them, one category of matters includes:
Information security incidents such as the leakage of customer personal information involve more than 5,000 customer information data or more than 500 customers at a time; payment business interruption or functional failure due to emergencies, exceeding 2 hours or affecting payment business more than 100,000 Pen, or seven items that may cause major negative public opinion.
The second category includes:
Payment institutions and their main investors and actual controllers are involved in major litigation or arbitration disputes involving more than 10% of the net assets, important assets exceeding 10% of the net assets are seized or frozen, criminal cases and other legal issues; payment institution directors, Supervisors and senior management personnel are involved in criminal cases, or abnormal changes such as abnormal deaths, loss of contact, etc., may affect their normal performance of their duties, including seven items.
In addition, the method pointed out that the report of the post-event report should include but not limited to the following: First, the basic situation. Explain the cause, time, location, process, and impact of the incident. If the change of the beneficial owner of the payment institution is involved, the information of the beneficial owner of the payment institution after the change shall also be submitted, including the name, address, identity document or identification document type, number and validity period of the beneficial owner.
The second is the disposal situation. Where risk disposal is involved, it should explain the pre-judgment of the subsequent development of the event, the possible impact and loss, and the disposal measures to be taken. If the disposal has been completed, it shall explain the impact and loss caused, the disposal measures, the disposal effect, the summary analysis of the incident, and the follow-up measures to strengthen management, etc.
Wang Pengbo told reporters: “The payment industry is a national basic industry, and payment institutions are actually responsible for heavy responsibility. Therefore, when important events are involved, the central bank, as the supervisory authority, has the right to grasp the actual situation as soon as possible to avoid unnecessary major losses.
On the whole, the measures are conducive to improving the ability to identify, prevent and resolve risks in the payment market and maintain the stability of the payment market. “
Source of cover image: Photo by reporter Zhang Jian (data map)
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