CBRC Solicits Public Opinions on Its Decision to Amend the Rules on Implementing the Regulations on Administration of Foreign-funded Banks

 

In line with the central government guidance of “making new ground in pursuing opening up on all fronts” and the requirements of the National Financial Work Conference, the CBRC plans to amend the Rules on Implementing the Regulations on Administration of Foreign-funded Banks, and has released the CBRC’s Decision on Amending the Rules on Implementing the Regulations on Administration of Foreign-funded Banks (Draft for Comment) (hereinafter referred to as the Decision) to further open-up and continue to push forward reforms in administrative licensing. The Decision introduces three major amendments.

 

First, it supplements regulations on the conditions, procedures and application materials for foreign-funded banks to establish or stake in financial institutions in China, which provides a clear legal basis for these banks to invest in the equity of local banking institutions.

 

Second, a reporting system will be applied in place of the approval system for the following business activities: offering services to clients by foreign banks including overseas wealth management business, overseas custody business of wealth management products, custody business of securities investment fund, and drawing off interest-earning assets by liquidated foreign financial institutions.

 

Third, the amendment further standardizes market access for both Chinese and foreign banks. It merges the approval procedures for sub-branches’ establishment and opening into approval for sub-branches’ opening, and optimizes the conditions for foreign banks to issue debts and capital replenishment instruments. The Decision also streamlines the eligibility assessment process on executives. Pre-assignment approval is substituted by post-assignment registration for executives who shift to same-level or lower-level posts in foreign banks of the same type.

 

The Decision demonstrates China’s determination to further open-up, streamline administration and delegate power, and enhance prudential supervision. The CBRC will continue to support foreign banks’ efforts to provide financial services and participate in China’s market operation, remain committed to creating a fair and transparent policy environment for both Chinese and foreign banks, and promote the sound development of banking institutions.

 

Going forward, to ensure the implementation of central government policies on further opening up the banking sector, the CBRC will push forward the revision of existing laws, rules and regulations, so as to further promote the opening-up of China’s banking sector while safeguarding financial stability at the same time.

 

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Copyright: China Banking Regulatory Commission
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