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 Asia Securities Industry and Financial Markets Association (ASIFMA) said in a letter seen by Reuters.
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 centralized data backup center.
“This not only poses huge risks to all core institutions and operating institutions on an individual basis, but also brings significant systemic risks for the sector in China and globally given the inter-connectedness of the global financial sector, if the data is compromised or leaked,” the ASIFMA letter said.