China moves to step up supervision of banks’ custody business

CHINA’S banking and insurance regulator on Thursday (Dec 29) issued draft rules to step up supervision and management of commercial banks’ custody business.

The move aims to “enhance transparency ...and control business risks”, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement.

Commercial banks’ custody operations are designed for the safe-keeping of customers’ financial assets or investment portfolios such as social security funds, pensions and insurance funds.

Banks should ensure the independence of custody assets from their own assets, and isolate such funds, according to the draft. Commercial banks should also enhance due diligence of customers and enhance risk management and data protection of their custody business, it said. REUTERS