Legislation roundup: Shareholding and liquidity risk in banks and resource tax
December 07, 2017 | BY
Katherine Jo &The CBRC has prohibited investors from controlling more than one bank and has imposed stricter liquidity risk thresholds, and Sino-foreign oil and gas CJVs have been exempted from mining royalties
Banking
China Banking Regulatory Commission, Tentative Measures for the Administration of Commercial Bank Equity (Draft for Comments)
No more than two parties among an investor, and its affiliated parties and persons acting in concert, may, as major shareholders, acquire equity stakes in a commercial bank, or no more than one party among them may control a commercial bank.
Further reading
China Banking Regulatory Commission, Measures for the Administration of the Liquidity Risks of Commercial Banks (Draft for Comments on Amendments)
The Draft introduces three quantitative indicators. Net stable funding ratio applies to commercial banks with assets of at least Rmb200 billion, high-quality liquid asset adequacy ratio applies to banks with assets of less than Rmb200 billion, and liquidity matching ratio applies to all commercial banks.
Further reading
Tax
Ministry of Finance and State Administration of Taxation, PRC Resource Tax Law (Draft for Comments)
Chinese enterprises and foreign enterprises in Sino-foreign cooperative joint ventures to extract crude oil and/or natural gas and that pay mining royalties shall, in accordance with these Measures, pay resource tax and cease to pay mining royalties.
Further reading
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