China boardroom update - Issue 07, June 2009
On 3 March 2009, the China Banking Regulatory Commission (CBRC) published the new Commercial Bank Information Technology Risk Management Guidance ("the New Guidance"). This New Guidance requires that the Boards of Directors of foreign incorporated banks (FIBs) 'ensure that the core systems, which hold customer information, accounting information and product information, operate independently within China, and the incorporated bank should keep the highest administration authority to meet the monitoring and on-field examinations requests from the CBRC and to prevent cross-border risks.' On 16 April 2009, the CBRC published another notification to reiterate that the FIBs should establish independent and integrated information systems in accordance with the New Guidance before 3 March 2011. The requirement of the notification certainly increases compliance pressure on those FIBs who have taken a wait-and-see approach on the implementation of the system independence so far.