CBIRC on Decision to Amend Rules on Foreign-Funded Banks and Insurers
CBIRC published a State Council Order on the decision to amend the regulations of PBC on foreign-funded banks and insurance companies. The decision takes effect as of the date of promulgation. The revision of some articles of the two regulations is mainly to implement the opening-up policies approved by the central government on the market entry and business scope of foreign banks and insurance companies in China. CBIRC also published questions and answers (Q&As) related to the decision to amend the regulations.
The main revisions to the regulations on foreign-funded banks include the following:
- Removing the total asset requirement, as of the previous year-end prior to application, for the sole or controlling shareholder to establish a wholly foreign-owned bank, for the sole or major foreign shareholder to establish a Sino-foreign joint venture bank, and for a foreign bank to set up a branch in China, in addition to removing the condition that the sole or major Chinese shareholder of a Sino-foreign joint venture bank shall be a financial institution.
- Allowing foreign banks to concurrently set up wholly foreign-owned subsidiaries and branches, or concurrently set up Sino-foreign joint venture banks and foreign bank branches in China.
- Relaxing restrictions on foreign banks' business scope and allowing them to engage in issuance, redemption, and underwriting of government bonds. The threshold for foreign-bank branches to take time deposits from citizens in China has been lowered from RMB 1 million to RMB 500,000 per transaction and the approval requirement for foreign-funded banks to engage in RMB business is also removed.
- Improving regulatory measures for foreign bank branches, relaxing the requirement for foreign bank branches to hold a certain proportion of interest-bearing assets, and relaxing the restrictions on the proportion of RMB capital to RMB risk assets for foreign bank branches in China whose capital adequacy ratio continues to meet relevant regulations.
The main revisions to the regulations on foreign-funded insurance companies include the following:
- Removing the requirement that a foreign-insurance company applying for establishing a foreign-funded insurance company in China shall have been engaged in insurance business for more than 30 years and have established a representative office in China for more than 2 years
- Foreign insurance group companies are allowed to invest and set up foreign-funded insurance companies in China
- Overseas financial institutions are allowed to take shares in foreign-funded insurance companies in China
Related Links
Effective Date: October 15, 2019
Keywords: Asia Pacific, China, Banking, Insurance, Foreign-funded Banks, Foreign-funded Insurance Companies, Capital Adequacy, Opening-up Policy, State Council, PBC, CBIRC
Previous Article
BoE Proposes to Discontinue Collection of Form VPRelated Articles
EBA Issues Erratum for Phase 2 Package of Reporting Framework 3.0
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
EBA Updates Lists of Entities for Use in Capital Calculations under SA
EBA published an erratum for the technical package on phase 2 of the reporting framework 3.0.
MAS Amends Notice on Related Party Transactions of Banks
MAS amended Notice 643A that addresses requirements for banks to prepare statements of exposures and credit facilities to related concerns or parties.
ECB Amends Guideline on Euro Short-Term Rate
ECB has published, in the Official Journal of the European Union, the Guideline 2021/565 on the euro short-term rate (€STR) and this guideline amends the previous ECB Guideline 2019/1265.
EBA Consults on Standards Related to FRTB-SA
EBA launched a consultation on the draft regulatory technical standards on the list of countries with an advanced economy for calculating the equity risk under the alternative standardized approach (FRTB-SA).
PRA Proposes Rules Related to IRB Approach for Credit Risk
PRA is proposing, via CP7/21, the approach to implementing new requirements related to the specification of the nature, severity, and duration of an economic downturn in the internal ratings-based (IRB) approach to credit risk.
BoE Outlines Regulatory Treatment of Recovery Loan Scheme of UK
The UK government launched the Recovery Loan Scheme (RLS) as part of its continued COVID-19 support for UK businesses, as announced by HM Treasury on March 03, 2021.
FSB Addresses G20 on COVID Measures, TBTF Reforms, and Climate Risks
FSB published a letter, from its Chair Randal K. Quarles, to the G20 Finance Ministers and Central Bank Governors, ahead of their virtual meeting on April 07, 2021.
OSFI Unwinds Temporary Increase to Covered Bond Limit for Banks
OSFI issued a letter to the deposit-taking institutions issuing covered bonds and announced the unwinding of the temporary increase to the covered bond limit for deposit-taking institutions, effective immediately.
EU Amends CRR and Securitization Regulation in Response to Pandemic
To support recovery from the COVID-19 crisis, EU has published two regulations to amend the securitization framework, as set out in the Securitization Regulation (2017/2402) and the Capital Requirements Regulation or CRR (575/2013).
