Four Departments Issue Implementation Opinions to Improve the Governance Mechanisms of Financial Institutions

On July 31, 2026, the National Financial Regulatory Administration (NFRA), the People’s Bank of China (PBOC), the China Securities Regulatory Commission (CSRC), and the Ministry of Finance (MOF) released the Implementation Opinions on Improving the Governance of Financial Institutions (the “Implementation Opinions”), which took effect upon issuance.

The Implementation Opinions set forth 22 measures in 9 parts, making clear that by 2029 a governance mechanism featuring clearly defined powers and responsibilities, compatible incentives and constraints, stringent risk management, and standardized and efficient operation will be basically established. The Implementation Opinions make provisions regarding shareholder access and codes of conduct, the performance of duties by boards of directors and independent directors, reporting and accountability of the management, deferred payment and clawback of performance-based compensation, internal control compliance and internal audit, related-party transaction management, comprehensive risk management, information disclosure, classified regulation and look-through regulation, among other matters, and require strict control over the admission of directors and senior executives and stronger early intervention for institutions with major governance deficiencies.