Implementation Measures on the Administrative Licensing of Foreign-Invested Financial Institutions
Implementation Measures on the Administrative Licensing of Foreign-Invested Financial Institutions
Implementation Measures on the Administrative Licensing of Foreign-Invested Financial Institutions
Order of China Banking Regulatory Commission [2006] No. 4
January 12, 2006
The Measures of China Banking Regulatory Commission for the Implementation of Administrative Licensing Matters Concerning Foreign-funded Financial Institutions, which were adopted at the 40th chairmen meeting of China Banking Regulatory Commission on November 10, 2005, are hereby promulgated and shall come into force as of February 1, 2006.
Liu Mingkang, Chairman of China Banking Regulatory Commission
Appendix: Implementation Measures on the Administrative Licensing of Foreign-Invested Financial Institutions
Chapter I General Provisions
Article 1 These Measures are formulated for the purposes of regulating the administrative licensing acts of China Banking Regulatory Commission (hereinafter referred to as the CBRC) and its dispatched institutions relating to foreign-funded financial institutions, clarifying the administrative licensing matters, conditions, operational procedures and time limits and protecting the legitimate rights and interests of the applicants in accordance with the Banking Supervision Law of the People's Republic of China, the Law on Commercial Banks of the People's Republic of China, the Administrative License Law of the People's Republic of China, the Regulation for the Administration of Foreign-funded Financial Institutions of the People's Republic of China, other laws and administrative regulations, and relevant decisions of the State Council.
Article 2 These Measures shall apply to solely foreign -funded banks, equity joint banks, solely foreign-funded financial companies, equity joint financial companies, branches of foreign banks, and the representative offices of foreign unded financial institutions in China as ruled in the Regulation on the Administration of Foreign-funded Financial Institutions and the Measures for the Administration of Foreign-funded Financial Institutions' Representative Offices in China. The term "foreign-funded legal person institution" as mentioned in these Measures refers to solely foreign-funded banks, equity joint banks and solely foreign-funded financial companies and equity joint financial companies.
Article 3 China Banking Regulatory Commission and its dispatched institutions shall implement the administrative licensing relating to foreign-funded financial institutions in accordance with these Measures and the Provisions of China Banking Regulatory Commission on the Procedures for the Implementation of Administrative License,.
Article 4 The following matters of the foreign-funded financial institutions shall be subject to the administrative license of the CBRC and its dispatched institutions: the establishment, modification, termination, of the institution, the adjustment of the institution's business scope, the increase of business varieties, the qualifications of holding post of the senior manager of the institutions and etc...
Article 5 The submitted materials ruled by these Measures, except for annual statements, shall be accompanied by a Chinese translation if they are written in a foreign language. An annual statement printed in a language other than Chinese or English shall be accompanied by a Chinese or English translation.
Article 6 For any materials as required to be submitted by these Measures, if they are required to bear the signature of the authorizing party, they shall be accompanied by its (his) authorization. Except for the photocopy of business license issued by a Chinese administrative organ for industry and commerce, the photocopy of business license or any other financial business licensing document, letter of authorization, letter of guarantee issued by a foreign bank about bearing the tax and debt liabilities of its branches within China, and the document (letter) of opinions of the competent authority of the country or region where it is located as required to be submitted by these Measures, shall be notarized by an organization that is recognized by the country or region where it is located or shall be accredited by the embassy (consulate) of the People's Republic of China in the relevant country or region.
Chapter II Establishment of Institutions
Section 1 Establishment of Solely Foreign-funded Banks and Equity Joint Banks
Article 7 The minimum limitation amount of registered capital of a solely foreign-funded bank or equity joint bank shall be a sum of convertible currency equivalent to RMB 300 million yuan. The registered capital shall be paid-in capital. The CBRC may, according to the business scope of the solely foreign-funded bank or equity joint bank and the requirement for prudent supervision , increase its minimum limitation amount of registered capital.
Article 8 To establish a solely foreign-funded bank or equity joint bank, the applicant shall meet the following conditions: 1. The investor of the solely foreign-funded bank or the foreign party of the equity joint bank is a financial institution; 2. The sole shareholder or biggest shareholder of the solely foreign-funded bank must be a commercial bank with a capital adequacy ratio of not less than 8%. The sole foreign shareholder or biggest foreign shareholder of the equity joint bank must be a commercial bank with a capital adequacy ratio of not less than 8%; 3. The sole shareholder or biggest shareholder of a solely foreign-funded bank must have a representative office in China which has existed for 2 years or more. The sole foreign shareholder or biggest foreign shareholder of a equity joint bank must have established a representative office in China, If the sole foreign shareholder or biggest foreign shareholder of the equity joint bank is a Hong Kong bank or Macao bank, no representative office is required to be established at a first step. The representative office established within China refers to one under the supervision of the CBRC. 4. By the end of the fiscal year prior to the filing of an application, the total assets of the sole shareholder or biggest shareholder of the solely foreign-funded bank, or the sole foreign shareholder or biggest foreign shareholder of the equity joint bank shall not be less than US $ 10 billion. If the sole shareholder or biggest shareholder of the solely foreign-funded bank, or the sole foreign shareholder or biggest foreign shareholder of the equity joint bank is a Hong Kong bank or Macao Bank, its total assets shall, by the end of the fiscal year prior to the filing of an application, be not less than US $ 6 billion. 5. The country or region where the investor of a solely foreign-funded bank or the foreign counterpart of an equity joint bank is located has a sound financial regulatory system and the investor of the solely foreign-funded bank or foreign counterpart of the equity joint bank is subject to efficient supervision of the relevant competent authority of the said country or region; and 6. The relevant competent authority of the country or region where the investor of a solely foreign-funded bank or the foreign counterpart of the equity joint bank is located approves its application.
Article 9 To establish a solely foreign-funded or equity joint bank, the applicant shall satisfy the following prudent requirements in addition to the aforesaid conditions: 1. Having a reasonable corporate governance structure; 2. With good continuous business performances; 3. Having formulated financial statements by following the prudent accounting principle, and the accounting firm holding non- reserved opinions on the financial statements of the three years prior to filing the application; 4. Without record of serious violation of law or regulation, and without bad credit record; 5. Enjoying a good industry reputation and social image; 6. Meeting other relevant requirements for the investors of financial industry as provided for in the laws and regulations; and 7. Other prudent requirements as provided for by the CBRC.
Article 10 The establishment of a solely foreign-funded or equity joint bank shall be divided into two stages, i.e. the application for preparatory establishment and application for establishment.
Article 11 The application for the preparatory establishment of a solely foreign-funded or equity joint bank shall be subject to CBRC for the acceptance, examination and decision. To apply for the preparatory establishment of a solely foreign-funded or equity joint bank, the applicant shall submit the application materials to the CBRC, and shall make a copy to the institution dispatched by the CBRC at the place where the solely foreign-funded or equity joint bank is to be established. Within 20 days after the institution dispatched by the CBRC at the place where the solely foreign-funded or equity joint bank is to be established receives the application materials, it shall submit its written opinions to the CBRC. The CBRC shall, within 6 months after it receives the said written opinions, make a decision of approval or disapproval of the preparatory establishment (namely the "acceptance" or "rejection" as mentioned in Article 13 of the Regulation of the People's Republic of China on Foreign-funded Financial Institutions).
Article 12 To apply for the preparatory establishment of a solely foreign-funded or equity joint bank, an applicant shall submit the following application materials: 1. A preparatory establishment application document (letter) which is jointly signed by the chairmen of the board of directors, or presidents (chief executive officers or general managers) of all investors and is addressed to the Chairman of the CBRC. The content of application document (letter) for the preparatory establishment of a solely foreign-funded bank shall at least contain the name, amount of registered capital, and varieties of business of the solely foreign-funded bank to be established. The content of application document (letter) for the preparatory establishment of an equity joint bank shall at least contain the name of the equity joint bank to be established, the name of all investors, the amount of registered capital, the percentage of capital contributions of each investor, and the type of business to be applied . 2. A feasibility study report, which content shall at least contain the basic information of the applicant, analyses of the market prospect of the solely foreign-funded or equity joint bank to be established, the development plan for future business, organizational and management structure, and forecast of the asset-liability scale and profits in three years after the start of business operations; 3. The articles of association of the solely foreign-funded or equity joint bank to be established; 4. An equity joint contract for the equity joint bank to be established; 5. A photocopy of the business license or any other financial business licensing document of the investor of the solely foreign-funded bank or of each investor of the equity joint bank issued by the relevant competent authority of the country or region where the said investor is located; 6. The recent 3 years' annual statements of the investor of the solely foreign-funded bank or of each investor of the equity joint bank; 7. The document (letter) of opinions of the relevant competent authority of the country or region where the investor of the solely foreign-funded bank or foreign investor of the equity joint bank is located; 8. For the applicant which establishes a solely foreign-funded or equity joint bank for the first time, it shall submit the information about the financial system and relevant financial supervision laws and regulations of the country or region where the applicant of is located; 9. The articles of association of the applicant; 10. The diagram of the organizational structure of the applicant and the group to which it belongs, name list of the main shareholders, name list of the overseas branches and associate companies; 11. The bylaws or rules of the applicant on anti-money laundering; and 12. Other materials as required by the CBRC. The application materials submitted by the applicant to the CBRC shall be in duplicate, and one copy shall be sent to the institution dispatched by the CBRC at the place where the financial institution is to be established.
Article 13 An applicant shall, within 15 days after it receives the document of approval of the preparatory establishment, fetch an establishment application form from the institution dispatched by the CBRC at the place where the financial institution is to be established. The preparatory establishment period for a solely foreign-funded or equity joint bank shall be 6 months from the day when the applicant fetches the establishment application form. If the Applicant fails to finish the preparatory establishment within 6 months and if it applies for extending the preparatory establishment period, it shall, one month before the expiration of the preparatory establishment period, submit to the institution dispatched by the CBRC at the place where the financial institution is to be established an application document (letter) signed by the head of the preparatory establishment group of the planned institute, to state the reason and submit relevant certification materials. The institution dispatched by the CBRC at the place where financial institution is to be established shall make a decision of approval or disapproval within 15 days after it receives the application materials and shall send a copy to the institution dispatched by the CBRC on the next higher level and the CBRC, respectively. The maximum extension of the time limit for the preparatory establishment shall be 3 months. The applicant shall submit an establishment application prior to the expiration of the time limit as mentioned in the preceding paragraph. If it fails to do so, the document of approval of preparatory establishment shall be invalidated and the CBRC shall cancel the approval of preparatory establishment.
Article 14 After the preparatory establishment of a solely foreign-funded or equity joint bank is finished, the applicant may apply for the establishment thereof. The application for the establishment of the solely foreign-funded or equity joint bank shall be subject to the acceptance and preliminary examination and check of the institution dispatched by the CBRC at the place where the financial institution is to be established and be subject to the examination and decision of the CBRC. To apply for the establishment of a solely foreign-funded or equity joint bank, the applicant shall submit application materials to the institution dispatched by the CBRC at the place where the financial institution is to be established. The institution dispatched by the CBRC at the place where the financial institution is to be established shall, within 30 days after it accepts the application, submit the application materials, preliminary examination opinions and check opinions to the CBRC, and simultaneously send a copy of the preliminary examination opinions and check opinions to the institution dispatched by the CBRC on the next higher level. During the course of preliminary examination, the institution dispatched by the CBRC at the place where the institution is to be established shall notify in written form the applicant of the check conclusion. If the applicant fails to pass the check, it may, within 10 days after it receives the notice, resubmit the establishment application to the institution dispatched by the CBRC at the place where the institution is to be established. The CBRC shall, within 30 days after it receives a complete set of the application materials, make a decision of approval or disapproval.
Article 15 To apply for the establishment of a solely foreign-funded or equity joint bank, the applicant shall submit the following application materials in triplicate to the institution dispatched by the CBRC at the place where the financial institution is to be established: 1. An application which is signed by the head of the preparatory establishment group of the institution to be established and addressed to the Chairman of the CBRC; 2. An application form as required by the CBRC; 3. The name list, resumes, and photocopies of identity certification and educational background certification of the candidate chairman of the board of directors and the president (chief executive officer or general manager) signed by the person authorized by the applicant; 4. Declarations on having or no having bad record as signed by the candidates; 5. A capital verification certification issued by a statutory capital verification institution; 6. The security on guard measures, and materials of other facilities relating to the business; and 7. Other materials as required by the CBRC.
Article 16 If the establishment of a solely foreign-funded or equity joint bank is approved, the applicant shall, after it receives the establishment approval document and fetches the financial business permit, go through the registration formalities in the administrative organ for industry and commerce so as to receive the business license. A solely foreign-funded or equity joint bank shall start business within 6 months after it received the business license. If it fails to do so, it shall, one month before the expiration of the time limit for business start, file an application for postponing the start of business operations to the institution dispatched by the CBRC at the place where the financial institution is established. The institution dispatched by the CBRC at the place where the financial institution is established shall make a decision of approval or disapproval within 15 days after it receives the written application. The maximum time limit for the postponement of business start shall be 3 months. If the solely foreign-funded or equity joint bank fails to start business within the time limits as mentioned in the preceding paragraph, the establishment approval document shall be invalidated; the CBRC shall cancel the establishment approval, take back its financial business permit and make an announcement to the public.
Section 2 Establishment of Solely foreign-funded Finance Companies and Equity Joint Finance Companies
Article 17 The minimum limitation amount of registered capital of a solely foreign-funded or equity joint finance company shall be a sum of convertible currency equivalent to RMB 200 million yuan. The registered capital shall be paid- in capital. The CBRC may, according to the business scope of the solely foreign-funded finance company or equity joint finance company and the requirement for prudent supervision increase its minimum limitation amount of registered capital.
Article 18 To establish a solely foreign-funded or equity joint finance company, the applicant shall meet the following conditions: 1. The investor of the solely foreign-funded or the foreign part of the equity joint finance company is a financial institution; 2. The sole shareholder or biggest shareholder of the solely foreign-funded finance company shall be a commercial bank or a financial company, the capital adequacy ratio of the commercial bank shall not be less than 8%. The sole foreign shareholder or biggest foreign shareholder of the equity joint finance company shall be a commercial bank or a financial company, the capital adequacy ratio of the commercial bank shall not be less than 8%; 3. The sole shareholder or biggest shareholder of a solely foreign-funded finance company shall have a representative office in China which has existed for 2 years or more. The sole foreign shareholder or biggest foreign shareholder of an equity joint finance company shall have established a representative office in China. .If the sole foreign shareholder or biggest foreign shareholder of the equity joint finance company is a Hong Kong or Macao bank or finance company, no representative office is required as a precondition. The representative office established within China refers to one under the supervision of the CBRC. 4. By the end of the fiscal year prior to filing the application, the total assets of the sole shareholder or biggest shareholder of the solely foreign-funded finance company, or the sole foreign shareholder or biggest foreign shareholder of the equity joint finance company shall not be less than US $ 10 billion. If the sole shareholder or biggest shareholder of the solely foreign-funded finance company, or the sole foreign shareholder or biggest foreign shareholder of the equity joint finance company is a Hong Kong or Macao bank or company, its total assets shall, by the end of the fiscal year prior to the filing of an establishment application, be not less than US $ 6 billion. 5. The country or region where the investor of a solely foreign-funded finance company or the foreign counterpart of an equity joint finance company is located has a sound financial regulatory system and the investor of the solely foreign-funded finance company or foreign counterpart of the equity joint finance company is subject to efficient supervision of the competent authority of the said country or region; and 6. The relevant competent authority of the country or region where the investor of a solely foreign-funded finance company or the foreign counterpart of the equity joint finance company is located approves the application.
Article 19 To establish a solely foreign-funded or equity joint finance company, the applicant shall, in addition to the requirements as mentioned above, meet the prudent conditions as described in Article 9 of these Measures.
Article 20 The establishment of a solely foreign-funded or equity joint finance company shall be divided into two stages, i.e. the application for preparatory establishment and application for establishment.
Article 21 The application for the preparatory establishment of a solely foreign-funded or equity joint finance company shall be subject to the acceptance, examination and decision of the CBRC. To apply for the preparatory establishment of a solely foreign-funded or equity joint finance company, the applicant shall submit the application materials to the CBRC, and shall send a copy to the institution dispatched by the CBRC at the place where the solely foreign-funded or equity joint finance company is to be established. Within 20 days after the institution dispatched by the CBRC at the place where the solely foreign-funded or equity joint finance company is established receives the application materials, it shall submit its written opinions to the CBRC. The CBRC shall, within 6 months after it receives the said written opinions, make a decision of approval or disapproval of the preparatory establishment (namely the "acceptance" or "rejection" as mentioned in Article 13 of the Regulation of the People's Republic of China on the Administration of Foreign-funded Financial Institutions).
Article 22 To apply for the preparatory establishment of a solely foreign-funded or equity joint finance company, an applicant shall submit the following application materials: 1. A preparatory establishment application document (letter) which is jointly signed by the chairmen of the board of directors, or the presidents (chief executive officers or general managers) of all investors and is addressed to the Chairman of the CBRC. The content of application document (letter) for the preparatory establishment of a solely foreign-funded finance company shall at least contain the name, amount of registered capital, and the varieties of business of the solely foreign-funded finance company to be established. The content of application document (letter) for the preparatory establishment of an equity joint finance company shall at least contain the name of the equity joint finance company to be established, the name of all investors, the amount of registered capital, the percentage of capital contributions of each investor, and varieties of business. 2. A feasibility study report, which shall at least contain the basic information of the applicant, analyses of the market prospect of the solely foreign-funded or equity joint finance company to be established, the development plan of future business, organizational and management structure, and forecast of the asset-liability scale and profits in three years after the start of business operations; 3. The articles of association of the solely foreign-funded or equity joint finance company to be established; 4. A joint operation contract on the equity joint finance company to be established; 5. A photocopy of the business license or any other financial business licensing document of the investor of the solely foreign-funded finance company or of each investor of the equity joint finance company issued by the relevant competent authority of the country or region where the said investor is located; 6. The recent 3 years' annual statements of the investor of the solely foreign-funded finance company or of each investor of the equity joint finance company; 7. The document (letter) of opinions for the application by the relevant competent authority of the country or region where the investor of the solely foreign-funded finance company or foreign party of the equity joint finance company is located; 8. For the applicant which establishes a solely foreign-funded or equity joint finance company within China for the first time, it shall submit the information about the financial system and relevant financial supervision laws and regulations of the country or region where the applicant of a solely foreign-funded or equity joint finance company is located; 9. The articles of association of the applicant; 10. The diagram of the organizational structure of the applicant and the group to which it belongs, name list of the main shareholders, name list of the overseas branches and associate companies;
11. The bylaws or rules of the applicant on anti-money laundering; and 12. Other materials as required by the CBRC. The application materials submitted by the applicant to the CBRC shall be in duplicate, and one copy shall be sent to the institution dispatched by the CBRC at the place where the financial institution is to be established.
Article 23 An applicant shall, within 15 days after it receives the document of approval of the preparatory establishment, fetch an establishment application form from the institution dispatched by the CBRC at the place where the financial institution is to be established. The preparatory establishment period for a solely foreign-funded or equity joint finance company shall be 6 months from the day when the applicant fetches the establishment application form. If the Applicant fails to finish the preparatory establishment within 6 months and if it applies for extending the preparatory establishment period, it shall, one month before the expiration of the preparatory establishment period, submit to the institution dispatched by the CBRC at the place where the financial institution is to be established an application document (letter) signed by the head of the preparatory establishment group, state the reason and submit relevant certification materials. The institution dispatched by the CBRC at the place where financial institution is to be established shall make a decision of approval or disapproval within 15 days after it receives the application materials and shall send a copy to the institution dispatched by the CBRC at the next higher level and the CBRC, respectively. The maximum extension of the time limit for the preparatory establishment shall be 3 months.
The applicant shall submit an establishment application prior to the expiration of the time limit as mentioned in the preceding paragraph. If it fails to do so, the document of approval of preparatory establishment shall be invalidated and the CBRC shall cancel the approval of preparatory establishment.
Article 24 After the preparatory establishment of a solely foreign-funded or equity joint finance company is finished, the applicant may apply for the establishment thereof. The application for the establishment of the solely foreign-funded or equity joint finance company shall be subject to the acceptance and preliminary examination and check of the institution dispatched by the CBRC at the place where the financial institution is to be established and be subject to the examination and decision of the CBRC. To apply for the establishment of a solely foreign-funded or equity joint finance company, the applicant shall submit the application materials to the institution dispatched by the CBRC at the place where the financial institution is to be established. The institution dispatched by the CBRC at the place where the financial institution is to be established shall, within 30 days after it accepts the application, submit the application materials, preliminary examination opinions and check opinions to the CBRC and simultaneously send a copy of the preliminary examination opinions and check opinions to the institution dispatched by the CBRC at the next higher level. During the course of preliminary examination, the institution dispatched by the CBRC at the place where the institution is to be established shall notify in written form the applicant of the check conclusion. If the applicant fails to pass the check, it may, after 10 days from the day it receives the notice, resubmit a establishment application to the institution dispatched by the CBRC at the place where the institution is to be established. The CBRC shall, within 30 days from the day it receives a complete set of application materials, make a decision of approval or disapproval.
Article 25 To apply for the establishment of a solely foreign-funded or equity joint financial company, the applicant shall submit the following application materials in triplicate to the institution dispatched by the CBRC at the place where the financial institution is to be established: 1. An application (letter) which is signed by the head of the preparatory establishment group of the to-be-established institution and addressed to the Chairman of the CBRC; 2. An application form as require by the CBRC; 3. The name list, resumes, and photocopies of identity certification and educational background certification of the candidate chairman of the board of directors and president (chief executive officer or general manager) signed by the person authorized by the applicant; 4. Declarations on having or not having bad record signed by the candidates; 5. A capital verification certification issued by a statutory capital verification institution; 6. The security on guard measures, and materials of other facilities relating to the business; and 7. Other materials as required by the CBRC.
Article 26 If the establishment of a solely foreign-funded or equity joint finance company is approved, the applicant shall, after it receives the establishment approval document and fetches the financial business permit, go through the registration formalities in the administrative organ for industry and commerce so as to get a business license. A solely foreign-funded or equity joint finance company shall start business within 6 months after it get a business license. If it fails to do so, it shall, one month before the expiration of the time limit for business start, file an application for postponing the start of business operations to the institution dispatched by the CBRC at the place where the financial institution is established. The institution dispatched by the CBRC at the place where the financial institution is established shall make a decision of approval or disapproval within 15 days from the day it receives the written application. The maximum time limit for the postponement of business start shall be 3 months. If the solely foreign-funded or equity joint finance company fails to start business within the time limits as mentioned in the preceding paragraph, the establishment approval document shall be invalidated; the CBRC shall cancel the establishment approval, take back its financial business permit and make an announcement in public.
Section 3 Establishment of Branches of Foreign Banks
Article 27 The working capital of a branch of a foreign bank (gratuitous appropriate by the headquarters of the branch) shall be a sum of convertible currency equivalent to not less than RMB 100 million yuan. The CBRC may, according to the business scope of the solely foreign-funded or equity joint finance company and the requirement for prudent supervision , increase its minimum amount of working capital.
Article 28 To establish a branch of a foreign bank, the applicant shall meet the following requirements:
1. The applicant shall have a representative office in China which has existed for 2 years or more. The representative office established within China refers to one under the supervision of the CBRC; 2. The applicant's total assets by the end of the fiscal year prior to filing the establishment application shall not be less than US $ 20 billion and its capital adequacy ratio is not less than 8%. If the applicant is a Hong Kong or Macao bank, its total assets by the end of the fiscal year prior to filing the establishment application shall not be less than 6 billion yuan and its capital adequacy ration shall not be less than 8%; 3. The country or region where the applicant is located has a sound financial regulatory system and the applicant is subject to the efficient supervision of the relevant competent authority of the said country or region; and 4. The country or region where the applicant is located approves its application.
Article 29 To establish a branch of a foreign bank, the applicant shall satisfy the following prudent conditions apart from the above-mentioned requirements: 1. Having a reasonable corporate governance structure; 2. With good continuous business performances; 3. Having formulated financial statements by following the prudent accounting principle, and the accounting firm holding clean opinions on the financial statements of the three years prior to filing the application; 4. Without record of serious violation of law or regulation, without bad credit record; 5. Enjoying a good industry reputation and social image; 6. The political and economic situation of the country or region where the applicant is located is steady and a sound communication mechanism has been established between the financial authority and the CBRC; and 7.
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