On 13 February 2018, the China Banking Regulatory Commission (‘CBRC’) issued a revised version of the Measures on Implementing the Administrative Licensing Matters of Foreign-invested Banks (外资银行行政许可事项实施办法), with immediate effect.
The revised measures are aimed at promoting foreign investment in China's burgeoning financial sector and, ultimately, improving the competitiveness of China's state-owned banks. They follow a series of related developments in 2017 intended to further open market access to foreign investment in the financial sector (see Legal updates, State Council circulates measures on attracting foreign investment, China further opens market to foreign-invested banks and China to further open financial markets).
Specifically, the revised measures:
- Clarify the procedures and documentary requirements for foreign-invested banks to invest in purely domestic-invested banks.
- Ensure that the licensing conditions and procedures for foreign-invested banks to establish sub-branches, appoint senior management personnel, issue bonds and replenish capital are consistent with the licensing conditions and procedures for domestic-invested banks.
- Simplify administrative procures by replacing pre-approval requirements with reporting requirements in relation to the provision by a foreign-invested bank of overseas wealth management services, overseas financial management custodial services and securities investment custodial services, as well as the withdrawal of interest-bearing assets of a sub-branch of a foreign bank that has been closed.
The CBRC is expected to revise other rules to facilitate this new approach to foreign investment in the banking sector.