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SHANGHAI - BEIJING is tightening supervision of Chinese financial companies by requiring monthly reports on their foreign currency exposure to ensure stability amid the global turmoil, state media said on Friday.
The new rules, which take effect this month, apply to both domestic and overseas branches of Chinese financial institutions, according to the Shanghai Securities News, which serves as a mouthpiece for securities regulators.
The State Administration of Foreign Exchange will require reports on foreign exchange assets and liabilities from institutions including banks, insurers, brokerages and fund management firms as well as the national pension fund and the sovereign wealth fund, the report said.
The move came after Hong Kong's securities regulator began investigating Beijing-backed investment firm Citic Pacific, which said unauthorised currency trades may have cost it about US$2 billion (S$3 billion).
Some Chinese financial institutions have incurred 'huge losses' in their foreign exchange assets amid the global credit crisis, the report said.
The move will help China improve its supervision of cross-border capital flows and safeguard against the impact of short-term movements of capital, it said, citing Mr Wang Yuanlong, a researcher with the state-run Bank of China.
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