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China Allows Pilot Area Financial Institutions to Legally Transmit Data Abroad for Daily Operations

Jan 22, 2025, 5:39 a.m. ET

AsianFin — The People's Bank of China and four other departments on Tuesday jointly issued the "Opinions on Promoting Institutional Opening in Financial Fields through Pilot Projects in Free Trade Zones (Ports) with Conditions for Alignment with International High Standards.

In the document, the following measures were highlighted:

  1. Facilitate and Standardize Cross-Border Data Flow for Financial Institutions in Pilot Areas: Under the framework of national data cross-border transmission security management, the aim is to explore and form unified compliance standards for financial data cross-border flow. The rules for the cross-border flow of financial data will be clarified, and financial institutions in pilot areas will be allowed to legally transmit data required for daily operations abroad.

  2. Management Measures for Data Protection: For reasons such as safeguarding data security and personal information security, or based on prudent considerations, management measures may be implemented for cross-border transmission of financial data.

  3. Explore a “Whitelist” System for Financial Data Cross-Border Circulation: The pilot regions will study and include mature and approved data into a "whitelist," once relevant national departments have consented.

  4. Data Safety Assessment and Standard Contracts for Data Export: Based on the needs of financial institutions in the free trade zones for cross-border data transmission, there will be research into the inclusion of data requiring security assessments for export, standard contracts for personal information export, and data related to personal information protection. This will facilitate efficient security assessments for key financial data and personal information.

  5. Develop Data Classification and Categorization Standards for the Financial Sector: There will be efforts to create standards for data classification and categorization within the financial sector, formulate a catalog of critical financial data, and urge financial institutions to conduct identification and declaration of important data. Furthermore, they will be required to submit data export security assessment reports to enhance cross-border data security measures.

  6. Support for Research and Adoption of International Electronic Payment Standards: The pilot regions will support financial institutions and payment service providers in researching and introducing internationally advanced standards for electronic payment systems, promoting cross-border digital identity verification and electronic identification, and supporting the legal and regulatory introduction of foreign electronic payment institutions.

  7. Restrictions on the Transfer of Financial Software Source Code: Relevant authorities and their staff shall not make the transfer or acquisition of the source code of financial software owned by enterprises or individuals a condition for importing, distributing, selling, or using mass-market financial software (excluding software used for critical financial infrastructure in the financial sector.

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