Legislation roundup: Financial institutions, bond investment and debt-for-equity swaps
November 28, 2018 | BY
Susan MokChina defines systemically important financial institutions, and foreign investors are offered tax exemption for bond investments and encouraged to engage in debt-for-equity swaps
Banking and Finance
People's Bank of China, China Banking and Insurance Regulatory Commission and China Securities Regulatory Commission, Guiding Opinions on Improving the Regulation of Systemically Important Financial Institutions
In addition to the minimum capital requirements, reserve capital and countercyclical capital requirements, systemically important financial institutions (SIFI) are required to comply with capital surcharge requirements and leverage ratio requirements.
Evaluation of SIFIs is conducted once a year.
Further reading
Tax
Ministry of Finance and State Administration of Taxation, Circular on the Policy for Enterprise Income Tax and Value-added Tax on Investments in the Domestic Bond Market by Foreign Organizations
Bond interest income derived by foreign organizations investing on the domestic bond market shall provisionally be exempt from enterprise income tax and value-added tax between November 7, 2018 and November 6, 2021.
Further reading
Financing
General Office of the National Development and Reform Commission, General Office of the People's Bank of China, General Office of the Ministry of Finance, General Office of the China Banking and Insurance Regulatory Commission and General Office of the China Securities Regulatory Commission, Circular on Encouraging Relevant Institutions to Participate in Market-oriented Debt-for-equity Swaps
The establishment of private equity investment funds by foreign investors to engage in market-oriented debt-for-equity swap business is supported. Foreign investors are permitted, in accordance with laws and regulations, to invest and acquire equity interests in financial asset investment companies and financial asset management companies to engage in market-oriented debt-for-equity swaps.
Further reading
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