Reuters (June 3) reported that China's proposed cybersecurity rules for financial firms could
pose risks to operations of western companies by making their data vulnerable to hacking,
among other things. The China Securities Regulatory Commission (CSRC) released the draft
Administrative Measures for the Management of Network Security in the Securities and
Futures Industry on April 29, and offered a month-long public consultation on the
proposals. The draft rules seek to make it mandatory for investment banks, asset managers, and
futures companies with operations in China to share data with CSRC, allow regulator-led
testing, and help set up a centralised data backup centre. The latest regulatory proposal comes
at a time when a string of western investment banks and asset managers are expanding their
presence in China, either by setting up wholly-owned units or by taking a bigger share in
existing joint ventures.
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