Circular of the China Banking and Insurance Regulatory Commission on Issuing the Guiding Opinions on the Innovation of Capital Instruments of Commercial Banks (Revised)

Circular of the China Banking and Insurance Regulatory Commission on Issuing the Guiding Opinions on the Innovation of Capital Instruments of Commercial Banks (Revised)
Circular of the China Banking and Insurance Regulatory Commission on Issuing the Guiding Opinions on the Innovation of Capital Instruments of Commercial Banks (Revised)

Yin Bao Jian Fa [2019] No. 42

November 22, 2019

All banking and insurance regulatory bureaus, all policy banks, large banks, joint stock banks, the Postal Savings Bank of China and foreign-funded banks,

The Guiding Opinions on the Innovation of Capital Instruments of Commercial Banks (Revised) (hereinafter referred to as the "revised Guiding Opinions") are hereby issued to all of you in order to further improve relevant systems of innovation and issuance of capital instruments. You are expected to comply with the revised Guiding Opinions and push forward relevant implementation in an orderly manner:

1. The trigger event set forth in the original contract shall apply to all additional tier 1 capital instruments which have been issued by commercial banks, namely stock preferred shares and undated additional tier 1 capital bonds.

2. Relevant regulations set forth in Article 5 "loss-absorbing sequence" of Part Two of the revised Guiding Opinions shall apply to additional tier 1 capital instruments and tier 2 capital instruments which have been issued by commercial banks.

3. As for those capital instruments which have been approved but not issued prior to the issuance of the revised Guiding Opinions, commercial banks may adjust the issuance schemes concerned in accordance with the relevant provisions of the revised Guiding Opinions after reporting the same to the China Banking and Insurance Regulatory Commission ("CBIRC") or its local offices.

Guiding Opinions on the Innovation of Capital Instruments of Commercial Banks (Revised)

The Guiding Opinions are hereby issued as follows in order to push forward and regulate the issuance of the capital instruments of commercial banks, strengthen the capital strength, increase the soundness of banking systems, and support sustained and sound development of the real economy:

I.
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