Regulators and industry associations in China have asked local and foreign banks to limit executives’ pay levels, the Financial Times has reported.

As per the report, last week, the Asset Management Association of China (AMAC) directed fund houses to “enhance [their] social responsibility and capability to serve the economy and the country’s strategies”.

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The AMAC is believed to have asked to defer at least 40% of bonus payments to senior staff for three or more years.

The new rules also require senior officials to invest a minimum of 20% of their bonuses in the financial products of their companies.

The association said that its guidelines are aimed at dealing with the “risk-taking behaviour and potential risks” emerging from executives’ pursuit of short-term bonus payouts.

Similar guidelines were issued by the Securities Association of China (SAC) last month. 

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The new guidelines were finalised after the Beijing office of China’s securities regulator organised a meeting about pay restraint with financial institutions, people briefed on the matter told the publication.

The meeting, which was organised in January this year, was attended by entities including CICC, Citic, Credit Suisse, Goldman Sachs and UBS, they said.

Local and foreign banks were also informed about the new pay rules issued by the AMAC and the SAC.

The new rules issued by the AMAC and the SAC also require banks to reclaim bonuses and pay from employees found guilty of misconduct. 

These developments are seen as signs that Chinese President Xi Jinping’s efforts to promote “common prosperity” is gaining momentum before the Communist party congress this year.