China Banking and Insurance Regulatory Commission, Decision on Repealing and Revising Certain Rules and Regulations
中国银行保险监督管理委员会关于废止和修改部分规章的决定
September 08, 2018 | BY
Susan MokThe CBIRC has lifted the restrictions on foreign investment in Chinese banks
Promulgated: August 17, 2018
Effective: as of date of promulgation
Main contents: The Decision repeals the Measures for the Administration of the Investment and Acquisition of Equity Stakes in Chinese-invested Financial Institutions by Foreign Financial Institutions. The principle of national treatment is to be followed, and no standalone provisions to govern the acquisition of equity stakes in Chinese-invested financial institutions by foreign investors will be formulated, with both Chinese and foreign investors to be subject to the same market entry and administrative permission measures (Article 1).
The provisions in relevant articles of the Implementing Measures for the Administrative Permission Items of Chinese-invested Commercial Banks, the Implementing Measures for the Administrative Permission Items of Small and Medium-sized Rural Financial Institutions and the Implementing Measures for the Administrative Permission Items of Non-bank Financial Institutions specifying that the equity investment percentage of a single foreign financial institution and its affiliated parties, as promoters or strategic investors, in a single Chinese-invested commercial bank or rural commercial bank or, as strategic investors, in a single financial asset management company may not exceed 20%, and the aggregate of the equity investment percentages of multiple foreign financial institutions and their affiliated parties in any one of the aforementioned institutions may not exceed 25% are deleted.
The Decision clarifies the regulatory attributes of, and the laws applicable to, Chinese-invested banks in which foreign investors have an equity stake. Based on the principle of equal treatment of Chinese and foreign investors, the Decision specifies that, where a foreign financial institution invests and acquires an equity stake in a Chinese-invested commercial bank or a small or mediumsized rural financial institution, oversight will be exercised based on the type of the institution at the time the equity stake therein is acquired and the bank's institutional type will not be revised as a result of the foreign investor acquiring the equity stake.
The Decision specifies that, when a foreign financial institution invests and acquires an equity stake in a Chinese-invested bank, it is required to comply with China's fundamental foreign investment laws applicable when foreign investors invest in China, in addition to complying with relevant prudential financial regulation provisions (Article 2).
clp reference: 3610/18.08.17 promulgated: 2018-08-17 effective: 2018-08-17This premium content is reserved for
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