Circular on Matters Relevant to Further Relaxing Market Access for Foreign-funded Banks

1 . A branch of a foreign bank may commence in accordance with the law to engage in the business of offering on an agency basis, redeeming on an agency basis and underwriting government bonds without the administrative permission of the State Council's banking regulator. It shall submit a report thereon to the regulator within five working days after commencing such business.

A wholly foreign-owned bank or a Sino-foreign equity joint venture bank may commence in accordance with the law to engage in the business of offering on an agency basis, redeeming on an agency basis and underwriting government bonds without the administrative permission of the State Council's banking regulator. It shall submit a report thereon to the regulator within five working days after commencing such business.

If a foreign-funded bank that commences the business described in the preceding paragraphs is required in accordance with the law to secure the permission of another department, it shall handle matters in accordance with the relevant provisions. The underwriting of government bonds specified in the preceding paragraphs includes the underwriting of bonds offered in China by foreign governments.

2 . If a foreign bank has established multiple branches in China and the managing branch has secured approval to engage in renminbi business, such managing branch may perform its management duties and, subject to assessing and ensuring that other branches in China that propose to engage in renminbi business satisfy the conditions, authorize such branches to engage in renminbi business.

A branch that has been authorized by the managing branch to engage in renminbi business shall complete renminbi business preparatory work in accordance with regulations, and may only engage in renminbi business after submitting a report to the local agency of the State Council's banking regulator.

3 . If a foreign bank has established multiple branches in China and the managing branch has secured approval to engage in derivatives trading business, such managing branch may perform its management duties and, subject to assessing and ensuring that other branches in China that propose to engage in derivatives trading business satisfy the conditions, authorize such branches to engage in derivatives trading business.

A branch that has been authorized by the managing branch to engage in derivatives trading business shall satisfy relevant provisions on the engagement in derivatives trading business by banking financial institutions, and may only commence engaging in derivatives trading business after submitting a report and providing the letter of authorization issued by the managing branch and the materials required for engaging in derivatives trading business to the local agency of the State Council's banking regulator.

4 . The operating capital allocated to branches in China by a foreign bank shall be calculated in aggregate. When establishing an additional branch, if the total of the operating capital calculated in aggregate satisfies the minimum amount and the requirements of regulatory indicators, the foreign bank may authorize a branch in China to allocate the operating capital to the newly established branch in accordance with regulations.

5 . A wholly foreign-owned bank, Sino-foreign equity joint venture bank or foreign bank branch that engages in the aforementioned operational and management activities shall strengthen the development of its rules and regulations, the development of its systems, compliance management and risk control, and enhance its comprehensive financial service level. The managing branch in China of a foreign bank shall strengthen its management of the other branches in China of the foreign bank. If a major matter is encountered, the same shall be reported to the regulator in a timely manner.