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(Adopted at the 25th Executive Meeting of the State Council on January 10th, 2000
Promulgated by Decree No.282 of the State Council of the People’s Republic of China on March 15th, 2000)
1. In order to perfect the supervisory system of state-owned key financial institutions and strengthen the supervision over these institutions, Provisional Regulations for supervisory committees of State-owned Key Financial Institutions (the Regulations) are enacted in accordance with the laws and regulations such as the Law of Commercial Banks of the People’s Republic of China and the Law of Insurance of the People’s Republic of China.
2. The state-owned key financial institutions referred to herein include the state-owned policy banks, commercial banks, financial assets management companies, securities companies, and insurance companies with the supervisory committee appointed by the State Council (hereinafter referred to as the state-owned financial institutions).
The lists of state-owned financial institutions shall be suggested by the management institutions under the supervisory committee of these institutions (hereinafter referred to as the management institutions under the supervisory committee) and then submitted to the State Council for decision.
3. The supervisory committee in the state-owned financial institutions (hereinafter referred to as the supervisory committee), appointed by the State Council, shall be responsible to the State Council and conduct, in the name of the State, the supervision over the assets quality and the value maintenance and increase of state-owned assets in the said institutions.
4. The regular management for the supervisory committee shall be executed by the management institutions under the supervisory committee.
5. The supervisory committee shall adopt the financial supervision as the center of their work and conduct the supervision over the financial activities of state-owned financial institutions and the operation and management of directors, presidents (managers) and other major personnel in charge in accordance with the relevant laws, regulations and rules of the Ministry of Finance so that the state-owned assets and their interests shall not be violated.
Since the supervisory committee and the state-owned financial institutions have a relationship of supervising and being supervised, the former shall not participate or interfere in the business decision and management of the institutions.
6. The supervisory committee shall fulfill the following duties
(1) Checking the execution of the state financial and economic laws, administrative regulations, and rules and regulations by the state-owned financial institutions.
(2) Checking the financial status of state-owned financial institutions, consulting their financial and accounting materials as well as other materials related to their business and management, and verifying the authenticity and legality of their financial reports and reports on fund operation.
(3) Checking the business performance, profit allocation, value maintenance and increase of state-owned assets, and fund operation in the state-owned financial institutions.
(4) Checking the business performance of directors and presidents (managers) in the state-owned financial institutions, evaluating their business and management performances, and proposing the opinions on reward and penalty as well as appointment and dismissal.
7. The supervisory committee shall conduct the biannual checks over the state-owned financial institutions and check on an irregular basis the special issues of these institutions according to the actual demands.
8. The supervision and check from the supervisory committee shall adopt the following methods:
(1) Listening to the reports on the financial and fund status, and also the operation and management by the chief personnel in charge in the state-owned financial institutions, and holding the meetings on supervision and check in these institutions.
(2) Consulting the financial reports, accounting vouchers and accounting books and other financial and accounting materials and also other materials related to business and management.
(3) Checking the financial and fund status of state-owned financial institutions, seeking the opinions from employees and if necessary, require the explanation from the chief personnel in charge in these institutions.
(4) Investigating the financial status and business and management of state-owned financial institutions from some departments like the finance, industry and commerce, taxation, auditing and financial supervision.
The chairmen of the supervisory committee shall, in conformity with the requirement from supervision and check, attend as observers the meetings of boards of directors and other meetings in the state-owned financial institutions or delegate other members of the supervisory committee to attend the aforesaid meetings.
9. The supervisory committee shall direct the operation of such internal supervisory departments responsible for auditing, checking and supervising in the state-owned institutions. These departments shall assist the supervisory committee with their responsibilities of supervision and check.
10. After the supervisory committee conduct the supervision on the state-owned financial institutions, they shall invariably issue the checking reports immediately.
The contents of checking reports shall include the financial and fund analysis and the evaluation of business and management, the evaluation of business and management performance and the proposed reward and penalty as well as appointment and dismissal for the chief personnel in charge, the suggested treatment for existing problems, and other issues deemed as necessary for reporting by the State Council and the supervisory committee.
The supervisory committee shall not disclose to the state-owned financial institutions the contents of checking reports enumerated hereinbefore.
11. When the check reports have been examined by the members of the supervisory committee and the opinions have been sought from the related departments, the chairmen of the supervisory committee shall sign the reports and then the management institutions under the supervisory committee shall submit them to the State Council.
In case the members of the supervisory committee have in principle different views on the check reports, these views shall be included in the said reports.
12. Once the supervisory committee find in their supervision and check that the business activities of state-owned financial institutions may endanger the financial security, and cause the loss of state-owned assets or infringe upon the ownership interests or any other emergencies deemed as necessary for reporting by the supervisory committee, the special reports shall be proposed immediately to the management institutions under the supervisory committee or the reports shall be submitted directly to the State Council.
13. The state-owned financial institutions shall report and submit regularly and honestly to the supervisory committee their financial reports and reports on fund operation, and the major business activities without any refusal, concealment or false content.
14. The supervisory committee shall, in accordance with the supervision and check over the state-owned financial institutions, propose that the State Council instruct the State Auditing Administration (SAA), the Ministry of Finance (MOF), the People’s Bank of China (PBOC), the China Securities Regulatory Commission (CSRC), the China Insurance Regulatory Commission (CIRC) to conduct the auditing or check over the state-owned financial institutions according to their respective scopes of responsibilities.
The supervisory committee shall work more closely with the MOF, the PBOC, the CSRC and the CIRC and communicate the related issues with each other.
15. The supervisory committee are composed of one chairman and several supervisors. The members include the full-time and part-time ones. The full-time supervisors shall be appointed by the related departments and units. The part-time supervisors shall be assumed by those representatives from the MOF, the PBOC, the CSRC and the CIRC, or by the experts of professional certified accounting companies engaged by the management institutions under the supervisory committee and the representatives from state-owned financial institutions.
The supervisory committees are allowed to recruit employees if necessary.
16. The candidates for chairmen of the supervisory committee shall be determined in accordance with the specified procedure and appointed by the State Council. The chairmen of the supervisory committee shall be assumed by the government officials at a vice-ministerial level. As a full-time post, the chairmen shall be younger than 60 years old.
The full-time supervisors shall be appointed by the management institutions under the supervisory committee and assumed by the government officials at a level of department (bureau) chief and section chief. They shall be younger than 55 years old.
The members of the supervisory committee shall have the tenure of three years and the chairmen, full-time supervisors and delegated supervisors shall not have the second term in the same the supervisory committee of the state-owned financial institutions.
17. The chairmen of the supervisory committee shall have a pretty high level of policy consciousness, adhere to the principle, be honest and self-disciplined, and familiarize themselves with the financial or economic work.
The chairmen of the supervisory committee shall fulfill the following duties.
(1) Convening and presiding over the meetings of the supervisory committee;
(2) Taking responsibility for the everyday work of the supervisory committee;
(3) Checking and signing the reports and other major documents from the supervisory committee;
(4) Other duties that shall be fulfilled by the supervisory committee.
18. The supervisors shall meet the following conditions:
(1) Being familiar with and executing the related financial and economic laws, administrative regulations, and rules and regulations in China;
(2) Having the professional knowledge in the fields of finance, banking, auditing and macro-economy, and being familiar with the business and management of financial institutions;
(3) Adhering to the principles, being honest and self-disciplined, and being devoted to their posts;
(4) Having the strong capability of comprehensive analysis and judgment, and the independent working ability.
19. The chairmen, full-time supervisors, delegated supervisors and expert supervisors of the supervisory committee shall stick to the principle of evasion and not assume any posts in the supervisory committee of state-owned financial institutions where they have ever worked or their close relatives are the senior executives.
20. The expenses necessary for supervision and check conducted by the supervisory committee shall be supported by the state finance and listed and covered as an independent item by the management institutions under the supervisory committee.
21. The members of the supervisory committee shall not accept any presents from the state-owned financial institutions or participate in the dinners, entertainments, travels, visits and other activities arranged, organized or paid for by the state-owned financial institutions, or seek in these institutions the private benefits for themselves, their friends and relatives or other people.
The chairmen, full-time supervisors, delegated supervisors and expert supervisors of the supervisory committee shall not accept any rewards or fringe benefits, or have any expenses reimbursed by the state-owned financial institutions.
22. The members of the supervisory committee shall not disclose the contents of check reports and the commercial secrets of the state-owned financial institutions.
23. The members of the supervisory committee shall be granted the generous rewards if they have the outstanding achievements in the supervision and check and make the significant contribution to safeguarding the national interests.
24. If the members of the supervisory committee are found to have any of following acts, they shall be given the administrative and disciplinary actions. Once their offenses constitute crimes, their criminal liabilities shall be investigated according to law.
(1) They conceal those major problems of law and discipline infringements in the state-owned financial institutions, or have serious dereliction of their duties.
(2) They collude with the state-owned financial institutions to fabricate the fake reports.
(3) They infringe upon the provisions of Article 21 and Article 22 hereof.
25. If the state-owned financial institutions are found to have any of following acts, the chief personnel in direct charge and other personnel directly responsible shall be given the disciplinary actions or even dismissed from the posts. Once their offenses constitute crimes, their criminal liabilities shall be investigated according to law.
(1) Refusing and obstructing the performance of legal responsibilities by the supervisory committee;
(2) Refusing and delaying without acceptable reasons the delivery of the related materials on the financial status and business and management to the supervisory committee;
(3) Concealing or presenting the fake reports about the related materials;
(4) Any other acts to obstruct the supervision and check of the supervisory committee.
26. If the state-owned financial institutions discover that the members of the supervisory committee have the acts enumerated in Article 21 and Article 22 hereof, they shall have the right to report to the management institutions under the supervisory committee and also report directly to the State Council.
27. The Regulations shall become effective upon the promulgation. Interim Provisions on Boards of Supervisors in Solely State-owned Commercial Banks approved by the State Council on October 20, 1997 and promulgated by the PBOC on November 12, 1997 shall be repealed at the same time.
The China Securities Regulatory Commission
(This English version by Shenzhen Securities Information Co., Ltd. is for your reference only. In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.) | 
