China’s Ministry of Justice, together with the People’s Bank of China, the National Financial Regulatory Administration, the China Securities Regulatory Commission and the State Administration of Foreign Exchange, released a draft Financial Law of the People’s Republic of China for public comment. The draft is positioned as China’s first overarching, foundational financial law and seeks to provide a unified legal framework to strengthen financial regulation, prevent and resolve financial risks, and support high-quality financial development. The draft comprises 11 chapters and 95 articles and covers: overarching requirements for financial work; development of a modern central bank system, including clarifying central bank functions, improving the monetary policy framework and advancing macroprudential management to maintain renminbi value stability and financial stability; full lifecycle management of financial institutions (entry, operations and exit), including approval requirements for establishment of institutions and branches and for major changes; stronger compliance expectations for financial products and services and enforcement against financial fraud; financial market functions and trading principles, market stabilisation mechanisms, and risk management and performance assurance for financial market infrastructures; clarified regulatory responsibilities across sectors and between central and local authorities, a backstop supervisory mechanism aimed at full coverage, and strengthened consumer and investor protection alongside coordination and accountability provisions; market-based, rule-of-law risk disposal arrangements; and expanded legal liabilities to increase the cost of violations. The public consultation runs until 19 April 2026.

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