RiskTech Forum

Wolters Kluwer Financial Services Introduces Foreign Asset And Liability Compliance Solution For China

Posted: 15 May 2014  |  Source: Wolters Kluwer


Wolters Kluwer Financial Services, a leading worldwide provider of comprehensive risk management, compliance, finance and audit solutions to the financial services industry, today announced the availability of its new solution to help financial institutions operating in China manage offshore assets and liabilities as well as trade reporting.

Wolters Kluwer Financial Services' foreign assets and liability reporting, or FAL, system can help institutions operating in China comply with the State Administration of Foreign Exchange's latest rules. SAFE's rules, designed to simplify direct investment relationships with foreign entities, are the latest step toward deregulation and market reform by China's government and regulators.

The rules require financial institutions operating in China to acquire and report on foreign exchange business data in accordance with an initial report submission deadline of October 10, 2014. The new reporting requirements pertain to foreign receipt and payment truncations; account data; foreign currency purchase and sales activity; foreign debt data; and data tied to assets, liabilities and trading with overseas economic entities.

Wolters Kluwer Financial Services' FAL system supports all reports required by SAFE, automatically generating the required documents and interfacing to SAFE's reporting system for submission. The solution provides an audit trail of the entire reporting process and allows for authority management for cross-sector, multi-level users of the system. All of this helps financial institutions create a more transparent, efficient reporting process.

"Financial institutions should begin preparing now to meet the submission requirements," said Robin Luo, senior business analyst, Wolters Kluwer Financial Services. "Doing so is necessary to ensure accurate reporting and submission given that the scale of the system-wide adjustments required will far exceed the scale of the reports themselves."

Luo noted that financial institutions need to establish a database connection between direct investment relationships and foreign debt services, and ensure that direct investment relationships are reflected in foreign debt data. Institutions will also need to monitor for direct investment relationship changes as a result of voting rights before the deadline. In such an instance, a bank will need to use the foreign debt ID to ascertain a number of non-transactional changes.

Luo added that the rules released by SAFE also require the submission of personal cash-based foreign currency access data.