China Revises Foreign-Invested Banking and Insurance Regulations for Greater Opening-Up

China has been stepping up its pace to grant easier and more expanded market access for foreign investment in the financial sector amid its opening-up initiative under the  Foreign Investment Law (外商投资法), which was adopted on March 15, 2019 and will be effective as of January 1, 2020.  It intends to foster a level-playing field for foreign investors and their domestic counterparts under the same regulatory framework.  In particular, banking and insurance are two primary areas that have seen such efforts in the past couple of years.  On April 8, 2018, the China Banking and Insurance Regulatory Commission (CBIRC) was established as part of the governmental institutional reform.  Since then, a series of policies and measures for further opening-up have been announced, for example, the Governor of the People's Bank of China announced 11 measures in April 2018 during the Boao Forum; the CBIRC issued 12 measures in May 2019; and the Financial Stability and Development Committee of the State Council released 11 measures in July 2019.  More recently, on October 15, 2019, the State Council announced its decisions to amend for the third time the PRC Regulations for the Administration of Foreign-Invested Banks (中华人民共和国外资银行管理条例) ("Regulations of Foreign-Invested Banks") and the PRC Regulations for the Administration of Foreign-Invested Insurance Companies (中华人民共和国外资保险公司管理条例) ("Regulations of Foreign-Invested Insurers", together with Regulations of Foreign-Invested Banks, the "Regulations").  Following the amendments to the Regulations, the CBIRC suggested that it will be accelerating the formulation of rules for implementing such Regulations.

The revisions allow foreign banks to establish both wholly foreign-owned banks and foreign bank branches in China simultaneously