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
Regulators Fine Goldman Sachs for Risk Management Failures
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
Canada Hosts International Conference of Banking Supervisors
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA Proposes More Measures to Help Insurance Customers Amid Crisis
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA Issues Opinion to Address Risk Stemming from Legacy Instruments
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB Publishes Non-Bank Financial Intermediation Risk Monitor for 2020
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury Publishes Policy Statement Amending Benchmarks Regulation
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA Initiates Action Against a Bank for Liquidity Compliance Breach
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies Finalize Rule to Reduce Impact of Large Bank Failures
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies Finalize Rule on Net Stable Funding Ratio Requirements
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.
