China's National Financial Regulatory Administration amends trust governance and related-party transaction rules to align with the revised Company Law

China's National Financial Regulatory Administration issued a decision amending selected regulatory rules to ensure consistency with the revised Company Law of the People’s Republic of China, with effect from the date of promulgation. The changes focus on requirements for the set-up of supervisory boards and on the governance of related-party transactions. For trust company rules, the amendments to the Administrative Measures for Trust Companies and the Interim Measures for the Administration of Trust Company Equity clarify that a trust company may dispense with a supervisory board where the board of directors establishes an audit committee made up of directors that exercises the supervisory board’s powers. For related-party transactions, the Measures for the Administration of Related-party Transactions of Banking and Insurance Institutions add provisions tightening management of transactions involving directors, supervisors, and senior management, requiring approval by the board of directors or the shareholders’ meeting in line with the institution’s articles of association. For routine financial products or services where both single and cumulative transaction amounts do not reach the threshold for material related-party transactions, the approval process may be simplified via a unified resolution of the board or shareholders’ meeting. The National Financial Regulatory Administration will guide financial institutions in updating internal rules, optimizing business processes, and upgrading systems to implement the revised requirements.