52. Commercial banks shall, following the principle of risk-benefit match appropriate to the characteristics of the PFTZ-related business, establish risk preference and risk tolerance assessment standards and procedures for financial consumers in the PFTZ, so as to ensure that product designers, risk managers and sales people fully understand financial products they recommend or sell to consumers, and avoid providing a product or service to a customer that does not match his risk tolerance.

IX. Assessment Procedure

53. Commercial banks shall conduct self-evaluation according to prudential regulations of CBRC and the Guideline before conducting any PFTZ-related business, and shall entrust corresponding supervisory institution to submit a written self-evaluation report to CBRC Shanghai Bureau within ten days after conducting the PFTZ-related business (The Self-evaluation report of a Shanghai local registered bank with legal personality shall be submitted by its head office).

Commercial banks that conduct PFTZ-related business shall submit business risk evaluation of the previous year to CBRC Shanghai Bureau before the end of March each year. Where commercial banks find any serious risks in self-evaluation, they shall take measures to ensure that the risk management complies with the business development in the PFTZ, and send a written report to CBRC Shanghai Bureau without delay.

Self-evaluation shall focus on the effectiveness and adaptability of the risk management procedures and ability for the PFTZ-related business. Commercial banks that are found at variance with prudential regulations of CBRC and the Guideline when conducting pre-assessment and continuous self-evaluation are not allowed to conduct PFTZ-related business.

54. Commercial banks shall highlight contents conforming to the Guideline in the self-evaluation report. Specific information like authorization documents, management policies, personnel records and description of system shall be attached to verify the report.

55. CBRC Shanghai Bureau shall continuously regulate and supervise the self-evaluation of commercial banks if required, and shall verify it by field investigations and other measures as appropriate. The supervision of self-evaluation serves as a basis for intermediary and post-establishment supervision. Any misstatement in a self-evaluation report of PFTZ-related business or other behaviors that violate laws, rules, prudential regulations of CBRC and the Guideline shall bring on administrative punishment to the bank and its officer concerned by regulatory authorities, or mandatory regulation such as suspension of business.