Domestic information

1. The State Administration of Financial Regulation has issued the "Notice on Promoting the Development of Exclusive Commercial Pension Insurance" to normalize the development of exclusive commercial pension insurance business

On October 25th, the State Administration of Financial Regulation issued a notice on matters related to promoting the development of exclusive commercial pension insurance, further expanding the scope of institutions operating exclusive commercial pension insurance business. The Notice has a total of 33 articles, mainly including: firstly, clarifying the requirements for the owner's equity, solvency adequacy ratio, and liability reserve coverage of insurance companies operating exclusive commercial pension insurance business. The second is to standardize product design, stipulate the accumulation period and collection period, collection conversion table, insurance liability, cash value, etc., and implement unified filing management for insurance terms and rates. The third is to require insurance companies to establish and improve internal management mechanisms and strengthen account management. Fourthly, it is clear that insurance companies can entrust eligible commercial banks to promote and sell exclusive commercial pension insurance. The fifth is to standardize the information disclosure requirements for insurance companies operating exclusive commercial pension insurance business. (Source: Official website of the State Administration of Financial Regulation)

Lawyer's recommendation: The pilot of exclusive commercial pension insurance business in the early stage has accumulated rich experience in carrying out normalized business. With the normalization of this business, insurance companies that meet regulatory requirements can apply to carry out exclusive commercial pension insurance business.

2. The China Securities Regulatory Commission releases new regulations on dividend distribution for listed companies, regulating cash dividends for listed companies

On October 20th, the China Securities Regulatory Commission revised the "Guidelines for the Supervision of Listed Companies No. 3- Cash Dividends for Listed Companies" and the "Guidelines for the Articles of Association of Listed Companies" regarding cash dividends. We are now soliciting public opinions. Among them, the revised content of the "Cash Dividend Guidelines" mainly includes three aspects: firstly, further clarify and encourage the direction of cash dividends, and promote the improvement of dividend levels; The second is to simplify the mid-term dividend distribution program and promote further optimization of dividend distribution methods and rhythm; The third is to strengthen the constraints on abnormally high proportion dividend paying enterprises and guide reasonable dividend distribution. There are three main aspects to the revision of the relevant provisions of the Guidelines for the Articles of Association of Listed Companies: firstly, encouraging listed companies to increase the frequency of cash dividends under the conditions of meeting profit distribution, guiding the formation of mid-term dividend habits, and stabilizing investors' dividend expectations; Secondly, in accordance with the "Guidelines for Cash Dividends" on optimizing the institutional arrangements for the implementation of mid-term cash dividends, new requirements for the completion time limit of mid-term dividends have been added; The third is to urge the company to refine the dividend policy in its articles of association, clarify the goal of cash dividends, and better stabilize investor expectations. (Source: Official website of China Securities Regulatory Commission)

Lawyer's recommendation: The current revision of the cash dividend rules by the China Securities Regulatory Commission provides clear and clear guidance on dividend distribution for listed companies, which is conducive to further optimizing the dividend rhythm and method, and reasonably mobilizing the resource allocation of listed companies.

3. Typical Cases of Wills Inheritance Disputes Since the Implementation of the Civil Code by the Beijing Second Intermediate People's Court

On October 26th, the Beijing Second Intermediate People's Court held a press conference to report on the status of testamentary inheritance disputes in Beijing Second Intermediate People's Court since the implementation of the Civil Code, and released typical cases. Among them, there are various types of wills involved, and a certain proportion of wills are deemed invalid. There are various reasons for the invalidity of the wills involved in the case: some self written wills do not have signatures and only have personal seals, making it difficult to determine their authenticity; Some testamentary witnesses only have one person and are interested parties, which does not comply with legal regulations; Some carriers are not serious and standardized enough, only reflected in fragments of notes or diaries; Some are vague about the distribution of inheritance. In nearly half of the cases of self written and proxy written wills, it is often difficult to verify the authenticity and identity of the will text, signature, and imprint due to the inability to verify them. The testator's capacity for civil conduct is also a controversial issue in determining the validity of the will. (Source: official account of Beijing Second Intermediate People's Court)

Lawyer's recommendation: The release of typical cases helps the public to correctly understand and apply the relevant provisions of the Civil Code on testamentary inheritance, fundamentally preventing and resolving potential family disputes, and plays a positive role in source governance.

4. KPMG Releases 2023 Hong Kong Private Wealth Management Report

Recently, KPMG China United Private Wealth Management Association (PWMA) released its eighth annual report on private wealth management in Hong Kong. The report reveals that the private wealth management industry in Hong Kong continues to face the impact of the macroeconomic and geopolitical environment: interest rates may maintain an upward trend in the medium term, which will have an impact on investment returns. Geopolitical uncertainty may pose long-term challenges to the industry. Although the global uncertainties will continue to affect the private wealth management industry in Hong Kong, the opportunities in the mainland Chinese market, the continuous growth of family office business, and the commitment of the government and regulatory agencies to implement multiple reform measures have created optimistic prospects for the industry. (Source: KPMG China official account)

Lawyer's recommendation: The role played by the "Policy Declaration on the Development of Family Office Business in Hong Kong" has begun to bear fruit. Especially the introduction of tax incentives - implementing a 0% tax rate on profits generated from qualified transactions between ultra-high net worth individuals and their family members, has been widely welcomed by ultra-high net worth individuals and even the industry.

Starting from November 1st, Beijing and other seven provinces and regions will carry out pilot projects for data and electricity bills

On October 27, seven provinces and autonomous regions, including Beijing, Shandong, Hunan, Anhui, Guizhou, Qinghai, and Ningxia Hui Autonomous Region, issued documents to carry out comprehensive digital electronic invoice pilot work in their own administrative regions since November 1. In addition to the 28 regions that have already been piloted in the early stage, as of October 27, 2022, the number of digital invoice pilot regions in China has reached 35. Regardless of Hong Kong, Macao, and Taiwan, only Xizang Autonomous Region has not yet launched digital invoice pilot, This indicates that China's electronic invoice reform has achieved substantial results. (Source: Official website of the tax bureau)

Lawyer's recommendation: The comprehensive digital electronic invoice, as an important component of the fourth phase of the Golden Tax, has achieved substantial results, marking substantial progress in China's smart tax construction. In the era of smart taxation, high net worth individuals and private enterprises need to pay taxes in accordance with the law and stay informed of policy changes. Digital and automated compliance management in advance has become inevitable, and enterprise credit rating management has become the core of tax management. The promotion of digital invoices is more likely to break through data silos, making deep integration of industry, finance, and taxation possible.

6. Resolutely crack down on tax related illegal and criminal activities with a "zero tolerance" attitude

Since the beginning of this year, the tax department has continuously increased the frequency of exposure to typical cases of tax related violations. By clicking on the "Tax Case Notification" section on the website of the State Administration of Taxation, it can be seen that as of now, the tax department has exposed nearly 200 typical cases of various tax related violations this year. These tax cases involve entertainment stars and internet hosts evading taxes, natural persons failing to handle personal income tax settlement and payment in accordance with the law, enterprises falsely issuing invoices and fraudulently obtaining tax refunds, tax intermediaries falsely promoting and illegally raising taxes, tax personnel derelicting their duties, violating discipline and law, and so on. (Source: China Tax News)

Lawyer's recommendation: Since the beginning of this year, the tax department has continued to resolutely implement the decisions and deployments of the Party Central Committee and the State Council, focusing on high-risk key industries and areas, insisting on striking hard and showing off, and actively exposing typical cases of tax related violations, releasing a strong signal that "tax fraud must be severely punished" and "violators must be severely punished". Paying taxes in accordance with the law should become a mandatory course for every citizen, rather than an optional choice question.

Overseas information

1. Cayman Islands removed from FATF grey list

On October 27, 2023, the Cayman Islands were removed from the Financial Action Task Force (FATF) added "monitoring list" (commonly known as the FATF gray list). (Source: Maples)

Lawyer's Recommendation: FATF acknowledges the strong and effective anti money laundering and counter-terrorism financing ("AML/CFT") system in the Cayman Islands, highlighting the jurisdiction's commitment to implementing the highest global standards.

2. Cayman court's tax error in rescuing trustee

The trustees of three Cayman Islands trusts have obtained a court order under section 64A of the Cayman Islands Trust Act (2021 Revised) to release errors that have adverse tax consequences. (Source: STEP)

Lawyer's recommendation: This case is the first published judgment to apply this relatively new amendment. Article 64A aims to promote flexible methods for revoking the exercise of flawed trust powers, and the court generally has an obligation to give them effect subject to appropriate limitations