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Governance and Structure Review of Mainland Chinese Subsidiary

Conducting an in-depth governance structure review of a Mainland China subsidiary of a top-tier US Investment Bank.

Governance and Structure Review of Mainland Chinese Subsidiary

Client Need

The client required a comprehensive review of the governance structure of their Mainland China subsidiary, which was under the purview of their Hong Kong regional headquarters. The review aimed to ensure the subsidiary's compliance with regulatory requirements set forth by the China Securities Regulatory Commission (CSRC) and the China Banking and Insurance Regulatory Commission (CBRC).


Our approach entailed conducting in-depth interviews with various regional heads of functions and business lines. These interactions aimed to understand the unique roles they were fulfilling (single-role or double-hatting) and whether they were involved in separate lines of defense as per the 3 lines of defense model. We also delved into the governance forums they participated in and whether their decisions had any impact on legal entities in different legal jurisdictions.

Based on these interviews and other relevant data, we compiled a detailed report that included the roles and responsibilities of the individuals interviewed, the way decisions were made and their potential impacts, and any potential conflicts of interest due to double-hatting roles or involvement in multiple lines of defense.

Value Added

The detailed report provided crucial insights into the governance structure of the Mainland China subsidiary, highlighting any possible areas of improvement or risk. The review not only ensured that the subsidiary was in compliance with the regulatory requirements of the CSRC and CBRC but also identified potential risks linked to the governance structure and decision-making processes.

The insights offered the client a clear view of the interplay between different roles within their organization, the decisions made in governance forums, and the implications of these decisions on different legal jurisdictions. The report allowed the regional heads of business for the investment bank to make informed decisions on restructuring or fortifying their governance structure to ensure smoother operations, minimize risk, and promote better compliance with regulatory bodies.

In conclusion, the governance structure review of the Mainland China subsidiary provided the client with actionable insights, paving the way for enhanced decision-making processes and regulatory compliance.

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