The China Banking and Insurance Regulatory Commission has issued trial rules on the management of a list of seriously dishonest entities in the financial sector. The framework sets out which firms and individuals can be placed on the list, standardizes the decision-making process and related safeguards, and introduces a mechanism for credit repair and early removal. The rules are framed as applying to severe misconduct in the financial sector rather than ordinary breaches. The rules define three broad categories for inclusion. These cover entities or individuals subject to penalties such as revocation of an operating or business license, cancellation or withdrawal of lifetime qualification to hold positions, or lifetime bans from banking or insurance work. They also cover cases involving one of six types of conduct that led to heavier administrative penalties or measures such as market access restrictions, orders to transfer equity or revocation of administrative approvals because the conduct seriously disrupted fair competition or normal social order. A third category covers parties that have the ability to comply with an administrative decision but refuse to perform or evade enforcement, seriously affecting the credibility of financial supervision, and that are subject to a court ruling on compulsory enforcement. Before making a listing decision, the authority or its local offices must inform the party of the grounds, legal basis and its rights. Statements and defenses must be reviewed and a response given within the prescribed time limit. A formal listing decision must specify the reasons, basis, applicable management measures, conditions and procedures for removal, and available remedies. Listed parties must be removed when the listing period ends, and they may apply for early removal after one year if they meet the stated conditions. Early removal can be revoked if the applicant intentionally concealed material facts or provided false information in serious circumstances.

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