Notice of the Guangdong Office of the China Banking Regulatory Commission on Issuing the Detailed Implementation Rules of Simplifying the Access Modes of the Relevant Institutions and Senior Managers within China (Guangdong) Pilot Free Trade Zone (for Trial Implementation)

· Area of Law： China (Guangdong) Pilot Free Trade Zone

· Level of Authority： Local Regulatory Documents

· Date issued：12-01-2015

· Effective Date：12-01-2015

· Status： Effective

· Issuing Authority： Other Institutions of Guangdong Province

Notice of the Guangdong Office of the China Banking Regulatory Commission on Issuing the Detailed Implementation Rules of Simplifying the Access Modes of the Relevant Institutions and Senior Managers within China (Guangdong) Pilot Free Trade Zone (for Trial Implementation)
All regulatory offices; all local sub-offices of the China Banking Regulatory Commission (“CBRC”); and the branches of all policy banks, branches of state-owned commercial banks, head offices (branches) of joint-stock commercial banks, branches of Postal Savings Bank of China, head offices (branches) of urban commercial banks, rural credit cooperative unions, rural commercial banks, branches of foreign-funded banks, and village banks in Guangzhou:
The Detailed Implementation Rules on Simplifying the Access Modes of the Relevant Institutions and Senior Managers within China (Guangdong) Pilot Free Trade Zone (for Trial Implementation) are hereby issued to you for your diligent and effective implementation. Any relevant problem encountered in the process of trial implementation shall be reported to the Guangdong Office of the CBRC in a timely manner.
All local sub-offices of the CBRC (excluding the Zhuhai Sub-Office of the CBRC) shall forward this Notice to corporate banking financial institutions within their respective jurisdictions, and the Zhuhai Sub-Office of the CBRC shall forwarded this Notice to banking financial institutions within its jurisdiction.

General Office of the Guangdong Office of the China Banking Regulatory Commission
December 1, 2015
Detailed Implementation Rules on Simplifying the Access Modes of the Relevant Institutions and Senior Managers within China (Guangdong) Pilot Free Trade Zone (for Trial Implementation)
I. General provisions
1. (Basis for formulation) These Detailed Implementation Rules are implemented on a trial basis in accordance with the Notice of the China Banking Regulatory Commission on Matters concerning Banking Regulation in Pilot Free Trade Zones (No. 62 [2015], General Office of the CBRC), the Notice of the China Banking Regulatory Commission on Issues concerning Banking Supervision in China (Shanghai) Pilot Free Trade Zone (No. 40 [2013], CBRC) and other relevant provisions on banking regulation and with the approval of the China Banking Regulatory Commission (“CBRC”).
2. (Overall Objectives) The transformation of banking regulatory functions shall be accelerated, the simplification of administrative procedures and the delegation of powers to lower levels shall be actively promoted, the market access work shall be improved, the working efficiency shall be enhanced, and the interim and ex post supervision capacities shall be improved in a comprehensive manner based on the requirements of internationalization and legalization. The management functions of the banking sector itself shall be further clarified while the capability of providing convenient services for the people shall be enhanced.
3. (Scope of Application) The Guangdong Office of the CBRC shall, in accordance with these Detailed Implementation Rules and the relevant provisions, simplify the access modes of the relevant banking institutions and senior managers within China (Guangdong) Pilot Free Trade Zone (including Nansha Area and Hengqin Area, hereinafter referred as “GDFTZ”), and supervise and administer the implementation of these Detailed Implementation Rules by the banking sector.
Relevant banking institutions include the commercial banks and other financial institutions absorbing public deposits and policy banks, which are formed in China in accordance with the law, and do not include postal savings banks for the time being.
4. (Legal Liability) For matters under the reporting system regulated by these Detailed Implementation Rules, banking institutions shall, under the principle of compliance and prudence, fulfill the responsibilities of the involved institutions and senior managers in strict accordance with the requirements of the regulatory regulations, and take effective measures to ensure the authenticity, completeness and accuracy of reporting materials and the compliance and eligibility of institutions and senior managers involved in reporting.
Once any concealment or omission in the reporting or any other non-compliant or imprudent act conducted by an institution in the process of handling of the matters reported has been discovered in an ongoing regulation, the regulatory authority shall investigate the liabilities of the reporting institution and the relevant persons in charge thereof, cancel the access facilitation of the reporting institutions and their senior managers, impose administrative penalties in accordance with the law, and take such compulsory regulatory measures as suspending the formation of additional branch offices, or ordering the institution to adjust directors or senior managers or restricting their powers.
These Detailed Implementation Rules shall not apply to the banking institutions which have any major risk or major violation of regulations or for which the regulatory authority consider it not appropriate to facilitate the access of institutions and their senior managers.
II. Simplifying the access modes of institutions within GDFTZ
5. (Institution Type) A banking institution within Guangzhou City which newly forms, modifies or terminates a branch office (excluding a branch) below the branch level in Nansha Area is not required to report to the Guangdong Office of the CBRC for ex ante approval, and shall be subject to the ex post reporting system, except when such a bank has not formed any branch or superior governing bank within Guangzhou City.
A banking institution within Zhuhai City which newly forms, modifies or terminates a branch office (excluding a branch) below the branch level in Hengqin Area is not required to report for ex ante approval, and shall be subject to the ex post reporting system in accordance with the regulatory power, except when such a bank has not formed any branch or superior governing bank within Zhuhai City.
These Detailed Implementation Rules shall apply, mutatis mutandis, to the banking institutions formed within GDFTZ by banks in Hong Kong, Macao, or Taiwan region.
6. (Reporting Circumstances) Ex post reporting circumstances as mentioned in this Chapter include new formation, modification and termination. In particular, the modification thereof includes relocation, renaming, and upgrade.
7. (Reporting Subjects) A superior governing bank which newly forms, modifies or terminates any branch office shall, in accordance with the provisions of these Detailed Implementation Rules, be responsible for submitting reporting materials to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC.
8. (Reporting Materials) A bank shall, according to the administrative licensing and reporting requirements for the new formation, modification or termination of branch offices by foreign-funded banks and Chinese-funded banks, develop the internal management system for self-evaluation and acceptance check, specify standards and requirements, clarify division of work and duties, and ensure each newly-formed or modified branch office's substantial compliance with the regulatory provisions and prudential requirements as well as the completeness and compliance of all formalities for termination of branch offices, and submit the following reporting materials to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC:
(1) A newly formed institution
(a) A formation report, including the name of the institution, the operating capital that has been appropriated to the newly formed institution, the business address of the newly-formed institution, and the names of primary persons in charge of the newly-formed institution, among others.
(b) The approval document or board resolution of the head office or superior governing bank on its consent with the formation of the institution to be formed.
(c) An operating capital verification report.
(d) Public security and fire prevention acceptance inspection certificates.
(e) A list of internal management systems.
(f) The self-evaluation and acceptance management system (which only needs to be submitted at the time of establishment and revision of the system, and is not required to be submitted repeatedly, here and below)) and the certification materials on the banking institution's implementation of self-evaluation and acceptance. In particular, each evaluation result thereof shall be affixed with the seal of the relevant acceptance department, and signed by the primary person in charge of the responsible department.
(g) A feasibility study report.
(h) An organization chart (specifying actually in-service persons).
(i) Relevant materials on senior managers of the newly formed institution, as prescribed in Article 13 hereof.
(2) Relocation of an institution within GDFTZ
(a) A report on relocation within GDFTZ, including reasons for relocation, and business address of the institution after relocation, among others.
(b) Public security and fire prevention acceptance inspection certificates.
(c) The original financial license and the photocopies thereof (A4 size).
(3) Renaming of an institution
(a) A renaming report, including the reasons for renaming, and the documents of the superior governing bank on approval of renaming; in case of any change in the administrative division of the place where the branch office is located, the documents on the change in the administrative division of the place shall be provided.
(b) The original financial license and the photocopies thereof (A4 size).
(4) Upgrade of an institution
(a) An upgrade report, including reasons for upgrade, among others.
(b) A reform plan of the head office or an official reply of the superior governing bank on approving the upgrade.
(c) An authorization document of the superior governing bank for scope of business of the institution upgraded.
(d) An organizational charts before or after the institution is upgraded (specifying actually in-service persons).
(e) The original financial license and the photocopies thereof (A4 size).
(5) Termination of an institution
(a) A termination report, including reasons for termination, audit report by the internal audit department or external audit institution on the institution intends to be terminated, among others.
(b) The approval document or board resolution of the head office or superior governing bank on its consent with termination of institutions.
(c) Plans for assets disposal, repayment of debts, and resettlement of employees of the terminated institution and the name list and contract information of persons in charge of the follow-up matters.
(d) The original financial license and the photocopies thereof (A4 size).
9. (Certificate-Issuing Process) A bank shall, within ten working days after the internal authorization documents are issued, submit complete reporting materials to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC under the territorial principle. The Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC shall, within ten working days after receiving complete reporting materials submitted by the bank, undergo the formation, modification or termination registration formalities in a financial institution as well as the market business access management system and the financial license management system of CBRC, and issue to, renew for, or withdraw from the financial institution the Financial License. The Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC shall only conduct a formality examination on the completeness of reporting materials, and simultaneously strengthen the interim and ex post supervision.
III. Simplifying the Access Modes of Senior Managers within GDFTZ
10. (Senior Manager Type) The primary persons in charge of the institutions as listed in Article 5 hereof and those persons who do not serve on primary persons-in-charge but have actually performed the functions thereof are not required to be reported to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC for ex ante approval and are exempted from participating in office-holding qualification examination for senior managers, and shall be subject to the ex post reporting system.
11. (Reporting Subjects) The superior governing bank of a branch office within GDFTZ where a senior manager takes office shall, in accordance with the provisions of these Detailed Implementation Rules, be responsible for submitting reporting materials to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC under the territorial principle.
12. (Reporting Materials) A bank shall, according to the administrative licensing or report requirements for senior managers of foreign-funded banks and Chinese-funded banks, specify selection and appointment qualifications, clarify selection and appointment procedures and duties, and independently examine, verify and confirm whether each senior manager of its branch office within GDFTZ substantially complies with all requirements of the regulatory provisions, and has the special governance capacity and practical experience required for effectively implementing its business development strategies within GDFTZ, and submit the following reporting materials to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC under the territorial principle:
(a) A report on the appointment of the proposed person, including the office to be held by the proposed person, the duties and powers, and the position and reporting route of such office in the organizational structures of the institution.
(b) A letter of authorization issued to the proposed person (the letter of authorization shall be notarized and certified).
(c) The photocopies of the resume, identity certificate and academic credentials of the proposed person (which shall be signed by the authorized signatory).
(d) A statement on the spotless record of the proposed person and a letter of commitment to abiding by laws and fulfilling his or her duties after holding office as signed by the proposed person.
(e) The outgoing audit report (economic responsibility audit report) or the performance evaluation report issued by his or her previous employer, specifying the information about the implementation of national laws, regulations and rules by the person under audit, the information about the compliance operation, internal control and risk management of the institution where he or she holds office or the department under his or her charge, and whether any major case, heavy loss or great risk has occurred in the institution where he or she holds office or the department under his or her charge. If the report or evaluation shows that the person under audit has any problem, an explanation on the responsibilities required by the proposed person and accountability for the proposed person, as well as the reasons for appointment of the proposed person shall also be given.
(f) An explanation on any office held or concurrently held by the proposed person in any bank or bank group or any affiliate thereof.
(g) A letter of commitment for office-holding qualification examination as signed and issued by the reporting institution and the relevant persons in charge thereof.
13. (Reporting Procedures) A bank shall, within ten working days after an internal appointment takes effect, submit complete reporting materials to the Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC. The Guangdong Office of the CBRC or the Zhuhai Sub-Office of the CBRC shall only conduct a formality examination on the completeness of reporting materials, and simultaneously strengthen interim and ex post supervision.
IV. Simplifying the access modes of the relocated institution and transferred senior managers in and out of GDFTZ
14. (Relocation of Institutions to GDFTZ) Where any branch office below the branch level (excluding branches) of a bank modifies its business premises, except for special reasons, the principle of one-way openness of GDFTZ featured by “Only-In-No-Out” shall be followed, that is, a branch office out of GDFTZ may, according to the requirements of Chapter II hereof, directly relocate to GDFTZ and be subject to the reporting system. Where a branch office within GDFTZ formed according to the reporting system is relocated out of GDFTZ, the relevant provisions of the CBRC shall apply.
15. (Transfer of Senior Managers) For a senior manager who is required to be subject to licensing for office qualification in accordance with the licensing measures of the CBRC but holds the office of an institution within GDFTZ without such licensing after the access mode of senior managers is simplified, if such a senior manager is transferred to a parallel position of the similar nature or a lower position out of GDFTZ in one incorporated institution, he or she shall apply for licensing for office-holding qualification in accordance with the relevant provisions of the CBRC.
V. Supplementary provisions
16. (Matters Not Covered) Matters not covered by these Detailed Implementation Rules shall be governed by the relevant provisions.
17. (Interpretation Subject) These Detailed Implementation Rules shall be subject to interpretation by the Guangdong Office of the CBRC.
18. (Effective Date) These Detailed Implementation Rules shall come into force on the date of issuance.