PIPL
China's comprehensive regulation for personal information protection
Basel III
Global framework for bank capital, leverage, and liquidity standards
Quick Verdict
PIPL protects personal data for all China-facing organizations with strict consent and transfer rules, while Basel III mandates capital/liquidity standards for banks to ensure financial stability. Companies adopt PIPL for market access, Basel III for prudential resilience.
PIPL
Personal Information Protection Law (PIPL)
Key Features
- Extraterritorial scope targeting China individuals
- Consent-first with no legitimate interests basis
- Explicit separate consent for sensitive PI
- Volume thresholds for cross-border transfers
- Fines up to 5% annual revenue
Basel III
Basel III: Finalising post-crisis reforms
Key Features
- Strengthened CET1 capital requirements and buffers
- Non-risk-based leverage ratio backstop
- Liquidity Coverage Ratio for 30-day stress
- Net Stable Funding Ratio for one-year horizon
- Enhanced Pillar 3 RWA comparability disclosures
Detailed Analysis
A comprehensive look at the specific requirements, scope, and impact of each standard.
PIPL Details
What It Is
Personal Information Protection Law (PIPL) is China's comprehensive national regulation enacted in 2021, effective November 1. It governs collection, processing, storage, transfer, and deletion of personal information with extraterritorial scope for foreign entities targeting China. Adopts a risk-based approach emphasizing consent, minimization, and security, alongside Cybersecurity Law and Data Security Law.
Key Components
- Core principles: lawfulness, necessity, minimization, transparency, accountability.
- Seven legal bases, consent-dominant without broad legitimate interests.
- Sensitive PI rules, individual rights (access, deletion, portability), cross-border mechanisms (SCCs, assessments).
- No formal certification; compliance via audits, PIPIAs for high-risk activities.
Why Organizations Use It
Mandatory for China-exposed firms to avoid fines up to 5% revenue. Enables market access, builds trust, reduces breach risks, supports global operations via compliant transfers.
Implementation Overview
Phased: gap analysis, data mapping, policies, controls, monitoring. Applies universally to handlers of Chinese PI; complex for multinationals requiring localization, representatives. 6-12 months typical, ongoing governance essential.
Basel III Details
What It Is
Basel III is the global prudential regulatory framework by the Basel Committee on Banking Supervision (BCBS), introduced post-2007 financial crisis. It strengthens bank resilience through enhanced capital quality and quantity, leverage constraints, liquidity standards, and disclosures. Employs a risk-based approach with non-risk-based backstops like leverage ratio.
Key Components
- **Three PillarsPillar 1 (minimum capital ratios: CET1 4.5%, Tier 1 6%, Total 8%; buffers; LCR/NSFR; leverage 3%); Pillar 2 (supervisory review/ICAAP); Pillar 3 (comparability-focused disclosures).
- Built on revised RWA methods, output floor, operational risk SMA.
- Compliance via national implementation, no fixed controls count.
Why Organizations Use It
- Mandatory for internationally active banks to meet legal requirements, avoid enforcement.
- Enhances solvency/liquidity, reduces systemic risk, lowers funding costs.
- Strategic: reprices balance sheets, optimizes assets, builds stakeholder trust.
Implementation Overview
- Phased transformation: diagnostics, data/systems build, parallel testing, governance.
- Targets large banks globally; requires data lineage, stress testing.
- Ongoing supervisory audits, no formal certification. (178 words)
Key Differences
| Aspect | PIPL | Basel III |
|---|---|---|
| Scope | Personal data protection, processing, transfers | Bank capital, liquidity, leverage requirements |
| Industry | All sectors handling Chinese PI, extraterritorial | Internationally active banks, financial institutions |
| Nature | Mandatory national law, CAC enforcement | International prudential standards, national implementation |
| Testing | DPIAs for high-risk, security audits | Stress tests, ICAAP, RWA validation |
| Penalties | Fines to 5% revenue, business suspension | Supervisory add-ons, dividend restrictions |
Scope
Industry
Nature
Testing
Penalties
Frequently Asked Questions
Common questions about PIPL and Basel III
PIPL FAQ
Basel III FAQ
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