Recently, five government bodies, including the China Banking Regulatory Commission ("CBRC"), have jointly released the Opinions on Further Supporting the Innovation of Capital Instruments of Commercial Banks (the "Opinions").
The Opinions contain major contents as below. First, active efforts will be made to broaden ways to issue capital instruments. Commercial banks are supported to issue capital instruments in multiple ways and stably expand the scale of capital instruments issued through various approaches. Second, research will be conducted actively to diversify capital instruments. It is required to sum up experience and do research into optimizing supporting rules, in order to create favorable conditions for banks to issue non-fixed-term capital bonds, secondary capital bonds that are convertible into shares, capital bonds that involve articles on being converted into shares in a fixed-term, debt instruments capable of absorbing total losses, and other capital instruments. Third, the group of investors will grow larger. Research will be conducted into investment policies of institutions, such as social insurance funds, insurance companies, securities institutions and fund companies, on capital instruments offered by commercial banks, with a view to increasing the number of subjects investing in commercial banks' capital instruments. Fourth, procedures for examining and approving the issuance of capital instruments will be simplified. To be specific, efforts will be made to streamline processes of examining and approving the issuance of capital instruments and optimize the shelf registration system.