Recently, the China Banking Regulatory Commission ("CBRC") has issued the Interim Measures for the Equity Administration of Commercial Banks (Draft for Comment) (the "Draft for Comment") for public consultation by December 15, 2017.
The Draft for Comment ascertains a three-dimensional regulatory framework for penetrating equities of commercial banks. First, a major shareholder is required to disclose the equity structure level by level until the actual controller and the ultimate beneficiary are made clear. Second, commercial banks shall be subjects mainly responsible for making examination to verify major shareholders as well as their controlling shareholders, actual controllers, related parties, parties acting in concert, and ultimate beneficiaries. Third, the CBRC and its local offices will identify the above-said subjects, depending on the regulatory needs. Meanwhile, the Draft for Comment clearly states that the number of an investor and its related parties and parties acting in concert that hold or control the shares of a banking institution shall be subject to certain restrictions, and provides for regulatory rules in respect of investment in commercial banks made by financial products, stating that the practice of acquiring shares of a commercial bank, in excess of the statutory percentage, through the primary and secondary markets, and domestic and foreign markets, shall be subject to the approval in a unified manner.