Implementation Measures of the China Banking Regulatory Commission for the Administrative Licensing Items concerning Foreign-Funded Banks

• Area of Law： Banking & Finance
• Level of Authority： Departmental Rules
• Date issued：02-13-2018
• Effective Date：02-13-2018
• Status： Effective
• Issuing Authority： China Banking Regulatory Commission

Implementation Measures of the China Banking Regulatory Commission for the Administrative Licensing Items concerning Foreign-Funded Banks

(Promulgated by Order No. 4 [2015] CBRC , and revised in accordance with Decision of the China Banking Regulatory Commission on Amending the Implementation Measures of the China Banking Regulatory Commission for the Administrative Licensing Items concerning Foreign-Funded Banks on February 13, 2018)

Chapter I General Provisions
Article 1 To regulate the administrative licensing activities of the China Banking Regulatory Commission (“CBRC”) and its local offices concerning foreign-funded banks, define the administrative licensing items, conditions, procedures, and time limits, and protect the lawful rights and interests of applicants, these Measures are developed in accordance with the Banking Supervision Law of the People's Republic of China, the Commercial Bank Law of the People's Republic of China, the Administrative Licensing Law of the People's Republic of China, the Regulation of the People's Republic of China on the Administration of Foreign-Funded Banks, other laws and administrative regulations, and the relevant decisions of the State Council.
Article 2 For the purposes of these Measures, “foreign-funded banks” includes: wholly foreign-funded banks, Chinese-foreign equity joint venture banks, branches of foreign banks, and representative offices of foreign banks. Wholly foreign-funded banks, Chinese-foreign equity joint venture banks, and branches of foreign banks are collectively referred to as for-profit foreign-funded banks. Representative offices of foreign banks are banking representative offices under the supervision of the CBRC.
Article 3 The CBRC and its local offices shall implement administrative licensing for foreign-funded banks in accordance with these Measures and the Provisions of the China Banking Regulatory Commission on the Implementation Procedures for Administrative Licensing.
Article 4 The following items concerning foreign-funded banks shall be subject to administrative licensing by the CBRC and its local offices: the formation, modification, and termination of an institution, the scope of business, the office qualifications of directors and senior executives, and other administrative licensing items prescribed by laws and administrative regulations or decided by the State Council.
Article 5 For the purposes of these Measures, “prudential conditions” includes, at a minimum, the following:
(1) Having a good reputation in the industry and a good social image.
(2) Having good performances as a going concern with a good asset quality.
(3) Having a management team with good professional skills and management capability.
(4) Having a sound risk management system capable of effectively controlling various risks.
(5) Having a sound internal control system and an effective management information system.
(6) Having prepared all financial reports under the prudential principle, for which unqualified opinions have been issued by accounting firms.
(7) No record of any serious violation of laws and regulations or involvement in any major case resulting from internal management problems.
(8) Having effective human resources management rules and highly competent professionals.
(9) Having the experience in and capability of managing and supporting institutional activities in China.
(10) Having effective capital restraint and replenishment mechanisms.
(11) Having a sound corporate governance structure.
(12) Other prudential conditions as set out by any law or administrative regulation or the CBRC.
Items (9), (10), and (11) of the preceding paragraph are only applicable to wholly foreign-funded banks and their shareholders, Chinese-foreign equity joint venture banks and their shareholders, and foreign banks.
Article 6 The name of a foreign-funded bank shall include both a Chinese name and a foreign name. The Chinese name of a branch of a foreign bank or a representative office of a foreign bank shall indicate the nationality and mode of liability of the foreign bank. The nationality shall be based on the place of registration of the foreign bank, but if the name of the foreign bank has indicated its nationality, the name of the branch or representative office need not repeat it. If the mode of liability of the foreign bank is unlimited liability, the mode of liability may be omitted in the Chinese name. The Chinese name of a branch office formed in the inland/mainland by a bank from Hong Kong, Macao, or Taiwan region only needs to indicate the mode of liability.
Article 7 The materials required to be submitted under these Measures, except annual reports, shall be accompanied with a Chinese version if they are prepared in a foreign language. An annual report printed in a language other than Chinese and English shall be accompanied with a Chinese or English version.
For the purposes of these Measures, “annual report” means an audited annual report accompanied with a written audit opinion issued by an accounting firm recognized by the country or region where the applicant is located.
Article 8 Where any material required to be submitted under these Measures is required to bear the signature of the authorized signatory, it shall be accompanied with a power of attorney issued to the authorized signatory.
A photocopy of the business license, a photocopy of the financial business permit, a power of attorney, and a letter of guarantee issued by a foreign bank to assume liabilities for the taxes and obligations of its branch in China, as required to be submitted under these Measures, shall be notarized by an organization recognized by the country or region where it is located, and be authenticated by the embassy or consulate of China in the country, but a photocopy of the business license issued by the administrative department for industry and commerce of China need not be notarized, and a notarization document issued by a notary office in China need not be authenticated.
The CBRC may, as it deems necessary, require any other application materials submitted by an applicant to be notarized by an organization recognized by the country or region where the applicant is located and be authenticated by the embassy or consulate of China in the country.
Chapter II Formation of Institutions
Section 1 Formation of Wholly Foreign-Funded Banks and Chinese-Foreign Equity Joint Venture Banks
Article 9 A wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to be formed shall meet the following conditions:
(1) It has bylaws in compliance with the Company Law of the People's Republic of China, the Commercial Bank Law of the People's Republic of China, and the Regulation of the People's Republic of China on the Administration of Foreign-Funded Banks.
(2) Its registered capital is paid-in capital, the minimum amount of which is 1 billion yuan or an equivalent in freely convertible currencies.
(3) It has directors and senior executives who are qualified to hold office and qualified personnel who are familiar with the banking business.
(4) It has a sound organizational structure and complete management rules.
(5) It has business premises, safety protection measures, and other facilities commensurate with its operations.
(6) It has established an information technology framework commensurate with its operations, has necessary, safe, and compliant information technology systems to support its operations, and has technologies and measures to ensure the effective and safe operation of the information technology systems.
Article 10 A shareholder of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to be formed shall meet the following conditions:
(1) Having sustained profitability, having a good credit standing, and having no record of any serious violation of laws and regulations.
(2) Having effective anti-money laundering rules, except for a Chinese non-financial institution shareholder.
(3) In the case of a foreign shareholder, having experience in engaging in international financial activities, being effectively regulated by the financial regulatory authority of the country or region where it is located, and having obtained an approval of its application from the financial regulatory authority of the country or region where it is located.
(4) The prudential conditions as set out in Article 5 of these Measures.
The country or region where the shareholder of a wholly foreign-funded bank to be formed or the foreign shareholder of a Chinese-foreign equity joint venture bank to be formed is located shall have a good economic condition and a sound financial regulatory system, and the financial regulatory authority thereof has established a sound supervision cooperation mechanism with the CBRC.
Article 11 A shareholder of a wholly foreign-funded bank shall be a financial institution. In addition to the conditions as set out in Article 10 of these Measures, the sole or controlling shareholder thereof shall meet the following conditions:
(1) It is a commercial bank.
(2) Its year-end total assets in the year prior to its application for formation are not less than USD 10 billion or, in the case of a bank from Hong Kong or Macao region, USD 6 billion.
(3) Its capital adequacy ratio satisfies the requirements of the financial regulatory authority of the country or region where it is located and the CBRC.
Article 12 A shareholder of a Chinese-foreign equity joint venture bank to be formed shall meet the conditions as set out in Article 10 of these Measures. In addition, a foreign shareholder and the sole or principal Chinese shareholder thereof shall be financial institutions, and the sole or principal foreign shareholder shall meet the following conditions:
(1) It is a commercial bank.
(2) Its year-end total assets in the year prior to its application for formation are not less than USD 10 billion or, in the case of a bank from Hong Kong or Macao region, USD 6 billion.
(3) Its capital adequacy ratio satisfies the requirements of the financial regulatory authority of the country or region where it is located and the CBRC.
Article 13 The principal shareholder as mentioned in Article 12 of these Measures means a commercial bank that holds 50% or more of the total capital or total shares of a Chinese-foreign equity joint venture bank to be formed or, though not holding 50% or more of the total capital or total shares thereof, falls under any of the following circumstances:
(1) Holding half or more of the voting rights of the Chinese-foreign equity joint venture bank to be formed.
(2) Having the power to control the financial and operating policies of the Chinese-foreign equity joint venture bank to be formed.
(3) Having the power to appoint and remove the majority of the members of the board of directors or a similar authority in the Chinese-foreign equity joint venture bank to be formed.
(4) Having half or more of the voting rights in the board of directors or a similar authority in the Chinese-foreign equity joint venture bank to be formed.
The principal shareholder of a Chinese-foreign equity joint venture bank to be formed shall include the Chinese-foreign equity joint venture bank in its consolidated statements.
Article 14 An institution that falls under any of the following circumstances shall not be a shareholder of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank:
(1) Its corporate governance structure or mechanism is evidently defective.
(2) Its equity relationships are complicated or of low transparency.
(3) It has a large number of affiliates, with frequent or abnormal affiliated transactions.
(4) Its core business is not prominent or its business scope involves too many sectors.
(5) Its cash flow fluctuations are substantially affected by the economic climate.
(6) Its liability-asset ratio or financial leverage ratio is higher than the average level of the industry.
(7) It holds equity in the wholly foreign-funded bank or Chinese-foreign equity joint venture bank on behalf of others.
(8) Other circumstances that have a significantly adverse impact on the bank to be formed.
Article 15 The formation of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall undergo two stages: formation preparation and business opening.
Article 16 An application for the formation preparation of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall be accepted and preliminarily examined by the CBRC Office at the place where the bank is to be located, and be examined and decided by the CBRC.
To apply for the formation preparation of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the application materials to the CBRC Office at the place where the bank is to be located, and send a copy thereof to the CBRC Sub-office at the place where the bank is to be located.
The CBRC Office at the place where the bank is to be located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within six months of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained. Under special circumstances, the CBRC may appropriately extend the period of examination, but the applicant shall be notified of the extension in writing and the extension may not exceed three months.
Article 17 To apply for the formation preparation of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the following application materials in duplicate to the CBRC Office at the place where the bank is to be located, and send a copy thereof to the CBRC Sub-office at the place where the bank is to be located:
(1) A written application for formation preparation addressed to the Chairman of the CBRC as jointly signed by the chairman of the board of directors or the president (chief executive officer or general manager) of each shareholder, containing the name, location, registered capital, types of business, and name and capital contribution ratio of each shareholder, among others, of the bank to be formed.
(2) A feasibility study report, containing, at a minimum, the basic information on the applicant, an analysis of the market prospect of the bank to be formed, a comprehensive business development plan, a management organizational structure, a forecast of the scale of assets and liabilities and profit or loss during three years after business opening, and a preliminary plan on the construction of information systems, data centers, and networks related to its operations.
(3) The draft bylaws of the bank to be formed.
(4) The equity joint venture contract signed by all shareholders of the bank to be formed, except for a wholly foreign-funded bank with a sole shareholder.
(5) The bylaws of each shareholder of the bank to be formed.
(6) The organizational structure charts of each shareholder of the bank to be formed and the group to which it belongs, a list of principal shareholders, and a list of overseas branch offices and affiliates.
(7) The annual reports of each shareholder of the bank to be formed for the last three years.
(8) The anti-money laundering rules of each shareholder of the bank to be formed, except for a Chinese non-financial institution shareholder.
(9) A letter of commitment to the long-term continuous operation in China and the effective management of the bank to be formed, as signed by all shareholders of the bank to be formed.
(10) A photocopy of the business license or financial business permit issued by the financial regulatory authority of the country or region where a foreign shareholder of the bank to be formed is located and a written opinion thereof on its application.
(11) In the case of formation of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank for the first time, an introduction to the financial system and a summary of the relevant financial regulation legislation of the country or region where the foreign shareholder is located.
(12) Other materials as required by the CBRC.
Article 18 The applicant shall, within 15 days of receipt of the approval document for formation preparation, obtain an application form for business opening from the CBRC Sub-office at the place where the bank is to be located, and start the preparatory work. The preparatory period shall be six months from the day when the application for formation preparation is approved.
If the applicant fails to complete the preparatory work within six months, the applicant shall report to the CBRC Sub-office at the place where the bank is to be located one month before the expiry of the preparatory period. The preparatory period may be extended by not more than three months.
The applicant shall submit a business opening application before the expiry of the period specified in the preceding paragraph; otherwise, the approval document for formation preparation shall be invalidated.
Article 19 After the preparatory work for the formation of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank is completed, the applicant shall apply to the CBRC Office at the place where the bank is to be located for an acceptance check. Upon passing the acceptance check, the applicant may apply for business opening. An application for business opening of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall be accepted, examined and decided by the CBRC Office at the place where the bank is to be located.
To apply for the business opening of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the application materials to the CBRC Office at the place where the bank is to be located, and send a copy thereof to the CBRC Sub-office at the place where the bank is to be located. The CBRC Office at the place where the bank is to be located shall, within two months of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within two months of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 20 To apply for the business opening of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the written opinion on the bank's passing the acceptance check for business opening and the following application materials in duplicate to the CBRC Office at the place where the bank is to be located, and send one copy thereof to the CBRC Sub-office at the place where the bank is to be located:
(1) A written application for business opening addressed to the Chairman of the CBRC as signed by the person in charge of the preparatory team, containing the name, domicile, registered capital, and business scope of the bank to be formed, the name and shareholding ratio of each shareholder, and the names of the proposed chairman of the board of directors and president (chief executive officer or general manager), among others; and, if there is a representative office in the same city where the wholly foreign-funded bank or Chinese-foreign equity joint venture bank is located, an application for closing the representative office.
(2) A completed application form for business opening.
(3) Relevant materials required for the confirmation of the office qualifications of the proposed chairman of the board of directors and president (chief executive officer or general manager).
(4) An audit report before business opening and a capital verification certificate issued by a statutory capital verification agency.
(5) The organizational structure chart of the bank to be formed, the job description of each post, and the internal authorization and reporting routes.
(6) The names, resumes, and training records of the personnel of the bank to be formed.
(7) The draft bylaws of the bank formed and a written legal opinion issued by a law firm legally formed in China on the draft bylaws.
(8) The safety and fire protection device compliance certificates of the business premises or the photocopies thereof.
(9) A photocopy of a certificate of title to, a certificate of right to use, or a contract to lease the business premises.
(10) Other materials as required by the CBRC.
Article 21 A wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall, after receipt of the approval document for business opening and obtaining a financial business permit, undergo the registration procedure with the administrative department for industry and commerce, and obtain a business license.
The wholly foreign-funded bank or Chinese-foreign equity joint venture bank shall open for business within six months of obtaining a business license. If it is unable to open for business within the period, it shall report to the CBRC Sub-office at the place where the bank is located one month before the expiry of the period for business opening. The period for business opening may be extended by not more than three months.
If the wholly foreign-funded bank or Chinese-foreign equity joint venture bank fails to open for business within the period specified in the preceding paragraph, the approval document for business opening shall be invalidated, and the organ deciding on its business opening shall cancel the business opening permit, retract the financial business permit, and issue an announcement.
Section 2 Restructuring a Branch of a Foreign Bank into a Wholly Foreign-Funded Bank
Article 22 To apply for restructuring its branch in China into a wholly foreign-funded bank in which it is the sole investor, a foreign bank shall meet the conditions as set out in these Measures for the formation of a wholly foreign-funded bank, and make a commitment to the long-term continuous operation in China and the effective management of the wholly foreign-funded bank to be formed.
Article 23 To restructure its branch in China into a wholly foreign-funded bank in which it is the sole investor, a foreign bank shall undergo two stages: formation preparation by restructuring and business opening.
Article 24 An application of a foreign bank for restructuring its branch in China into a wholly foreign-funded bank in which it is the sole investor shall be accepted and preliminarily examined by the CBRC Office at the place where the bank is to be located, and be examined and decided by the CBRC.
To apply for the formation preparation of a wholly foreign-funded bank by restructuring, the applicant shall submit the application materials to the CBRC Office at the place where the bank is to be located, and send a copy thereof to the CBRC Sub-office at the place where each of the branches of the foreign bank in China is located.
The CBRC Office at the place where the bank is to be located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within six months of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained. Under special circumstances, the CBRC may appropriately extend the period of examination, but the applicant shall be notified of the extension in writing and the extension may not exceed three months.
Article 25 The applicant for the formation of a wholly foreign-funded bank by restructuring shall submit the following application materials in duplicate to the CBRC Office at the place where the bank is to be located, and send one copy thereof to the CBRC Sub-office at the place where each of the branches of the foreign bank in China is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant, containing the name, location, registered capital or working capital, and types of business, among others, of the wholly foreign-funded bank to be formed and its branch offices; and the amount and currency of the increase of the registered capital (if any).
(2) A feasibility study report and an institutional restructuring plan, containing, at a minimum, the basic information on the applicant, an analysis of the market prospect of the bank to be formed, a comprehensive business development plan, a management organizational structure, a forecast of the scale of assets and liabilities and profit or loss during three years after business opening, and a preliminary plan on the construction of information systems, data centers, and networks related to its operations.
(3) The draft bylaws of the bank to be formed.
(4) A resolution on restructuring its branch in China into a wholly foreign-funded bank in which it is the sole investor as adopted by the board of directors of the applicant.
(5) A letter of opinion to agree that the wholly foreign-funded bank will succeed to the rights, obligations, and taxes of the former branch in China and a letter of commitment to assuming joint and several liability for the rights, obligations, and taxes of the former branch in China, as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(6) A letter of commitment to the long-term continuous operation in China and the effective management of the wholly foreign-funded bank to be formed, as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant, including but not limited to permitting the wholly foreign-funded bank to use its goodwill and providing financial, management, and technical support for the bank.
(7) The audited consolidated financial reports on all branches in China for the two years prior to application.
(8) A written opinion issued by the financial regulatory authority of the country or region where the applicant is located on the restructuring of the branch in China.
(9) The applicant's annual reports for the last three years.
(10) Other materials as required by the CBRC.
Article 26 The applicant shall, within 15 days of receipt of the approval document for formation preparation by restructuring, obtain an application form for business opening from the CBRC Sub-office at the place where the wholly foreign-funded bank is to be located, and start the preparatory work. The preparatory period shall be six months from the day when the application for formation preparation by restructuring is approved.
If the applicant fails to complete the preparatory work within six months, the applicant shall report to the CBRC Sub-office at the place where the wholly foreign-funded bank is to be located one month before the expiry of the preparatory period, and send a copy of the report to the CBRC Sub-office at the place where the former branch of the foreign bank is located. The preparatory period may be extended by not more than three months.
The applicant shall submit a business opening application before the expiry of the period specified in the preceding paragraph; otherwise, the approval document for formation preparation by restructuring shall be invalidated.
Article 27 After the preparatory work for the formation of a wholly foreign-funded bank is completed, the applicant shall apply to the CBRC Office at the place where the bank is to be located for an acceptance check. Upon passing the acceptance check, the applicant may apply for business opening. An application for business opening shall be accepted and preliminarily examined by the CBRC Office at the place where the bank is to be located, and be examined and decided by the CBRC.
To apply for the business opening of a wholly foreign-funded bank to be formed by restructuring a foreign bank's branch in China, the applicant shall submit the application materials to the CBRC Office at the place where the bank is to be located, and send a copy thereof to the CBRC Sub-office at the place where the former branch of the foreign bank is located.
The CBRC Office at the place where the bank is to be located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within two months of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 28 To apply for the business opening of a wholly foreign-funded bank to be formed by restructuring a foreign bank's branch in China, the applicant shall submit the written opinion on the bank's passing the acceptance check for business opening and the following application materials in duplicate to the CBRC Office at the place where the bank is to be located, and send one copy thereof to the CBRC Sub-office at the place where the former branch of the foreign bank is located:
(1) A written application for business opening addressed to the Chairman of the CBRC as signed by the person in charge of the preparatory team, containing the names and domiciles or business addresses of the wholly foreign-funded bank to be formed and its branch offices, the registered capital of the bank and the working capital of its branch offices, the types of business and the names of the proposed chairman of the board of directors and president (chief executive officer or general manager) of the bank, and the names of the presidents of the branches and sub-branches of the bank, among others.
(2) A list of assets, liabilities, and ownership interest to be transferred to the wholly foreign-funded bank to be formed and the pro forma balance sheet, income statement, five-category assets classification statement, and amount of loan loss provision of the wholly foreign-funded bank to be formed.
(3) An explanation on the completion of restructuring.
(4) A written legal opinion issued by a law firm on assignment of contracts or the contingency plan prepared by the bank for contracts not meeting the assignment conditions.
(5) The audit report before business opening and the capital verification certificate issued by a statutory capital verification agency.
(6) The draft bylaws of the wholly foreign-funded bank to be formed and a written legal opinion issued by a law firm legally formed in China on the draft bylaws.
(7) The organizational structure chart of the wholly foreign-funded bank to be formed, the job description of each post, and the internal authorization and reporting routes.
(8) The names, resumes, and training records of the personnel of the wholly foreign-funded bank to be formed.
(9) Relevant materials required for the confirmation of the office qualifications of the proposed chairman of the board of directors and president (chief executive officer or general manager) of the bank and the proposed presidents of the branch offices of the bank.
(10) Other materials as required by the CBRC.
Article 29 To restructure its branch in China into a wholly foreign-funded bank in which it is the sole investor, a foreign bank shall, after receipt of the approval document for business opening, surrender the financial business permit of the former branch, obtain a new financial business permit, undergo the registration procedure with the administrative department for industry and commerce, and obtain a business license. The former branch of the foreign bank shall undergo the deregistration procedure with the administrative department for industry and commerce according to the law.
Article 30 A wholly foreign-funded bank formed by restructuring a foreign bank's branch in China shall open for business within six months of obtaining a business license. If it is unable to open for business within the period, it shall report to the CBRC Sub-office at the place where the wholly foreign-funded bank is located one month before the expiry of the period for business opening. The period for business opening may be extended by not more than three months.
If a wholly foreign-funded bank fails to open for business within the period specified in the preceding paragraph, the approval document for business opening shall be invalidated, and the organ deciding on its business opening shall cancel the business opening permit, retract the financial business permit, and issue an announcement.
Section 3 Formation of a Branch of a Foreign Bank
Article 31 To form a branch of a foreign bank, the applicant shall meet the following conditions:
(1) It has sustained profitability, has a good credit standing, and has no record of any serious violation of laws and regulations.
(2) It has experience in engaging in international financial activities.
(3) It has effective anti-money laundering rules.
(4) It is effectively regulated by the financial regulatory authority of the country or region where it is located, and has obtained an approval of its application from the financial regulatory authority of the country or region where it is located.
(5) Its year-end total assets in the year prior to its application for formation are not less than USD 20 billion or, in the case of a bank from Hong Kong or Macao region, USD 6 billion.
(6) Its capital adequacy ratio satisfies the requirements of the financial regulatory authority of the country or region where it is located and the CBRC.
(7) The prudential conditions as set out in Article 5 of these Measures.
To form a branch of a foreign bank, the applicant shall provide, free of charge, working capital of not less than 200 million yuan or an equivalent in freely convertible currencies to the branch to be formed.
The country or region where the foreign bank to form a branch is located shall have a good economic condition and a sound financial regulatory system, and the financial regulatory authority thereof has established a sound supervision cooperation mechanism with the CBRC.
Article 32 To form any additional branches in China, a foreign bank shall meet the conditions as set out in Article 31 of these Measures, and its existing branches in China shall be in good operating condition, satisfy the requirements of prudential supervision in terms of major regulatory indicators, and meet the prudential conditions as set out by the CBRC.
Article 33 The formation of a branch of a foreign bank shall undergo two stages: formation preparation and business opening.
Article 34 An application for the formation preparation of a branch of a foreign bank shall be accepted and preliminarily examined by the CBRC Office at the place where the branch is to be located, and be examined and decided by the CBRC.
To apply for the formation preparation of a branch of a foreign bank, the applicant shall submit the application materials to the CBRC Office at the place where the branch is to be located, and send a copy thereof to the CBRC Sub-office at the place where the branch is to be located.
The CBRC Office at the place where the branch is to be located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within six months of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained. Under special circumstances, the CBRC may appropriately extend the period of examination, but the applicant shall be notified of the extension in writing and the extension may not exceed three months.
Article 35 To apply for the formation preparation of a branch of a foreign bank, the applicant shall submit the following application materials in duplicate to the CBRC Office at the place where the branch is to be located, and send one copy thereof to the CBRC Sub-office at the place where the branch is to be located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant, containing the name, location, working capital, and types of business, among others, of the branch to be formed.
(2) A feasibility study report, containing the basic information on the applicant, an analysis of the market prospect of the branch to be formed, a comprehensive business development plan, a management organizational structure, and a forecast of the scale of assets and liabilities and profit or loss during the three years after business opening, among others.
(3) The bylaws of the applicant.
(4) The organizational structure charts of the applicant and the group to which it belongs, a list of principal shareholders, and a list of overseas branch offices and affiliates.
(5) The applicant's annual reports for the last three years.
(6) The anti-money laundering rules of the applicant.
(7) A photocopy of the business license or financial business permit issued by the financial regulatory authority of the country or region where the applicant is located and a written opinion thereof on its application.
(8) In the case of formation of a branch of a foreign bank for the first time, an introduction to the financial system and a summary of the relevant financial regulation legislation of the country or region where the applicant is located.
(9) Other materials as required by the CBRC.
Article 36 The applicant shall, within 15 days of receipt of the approval document for formation preparation, obtain an application form for business opening from the CBRC Sub-office at the place where the branch is to be located, and start the preparatory work. The preparatory period shall be six months from the day when the application for formation preparation is approved.
If the applicant fails to complete the preparatory work within six months, the applicant shall report to the CBRC Sub-office at the place where the branch is to be located one month before the expiry of the preparatory period. The preparatory period may be extended by not more than three months.
The applicant shall submit a business opening application before the expiry of the period specified in the preceding paragraph; otherwise, the approval document for formation preparation shall be invalidated.
Article 37 After the preparatory work for the formation of a branch of a foreign bank is completed, the applicant shall apply to the CBRC Office at the place where the branch is to be located for an acceptance check. Upon passing the acceptance check, the applicant may apply for business opening. An application for the business opening of a branch of a foreign bank shall be accepted, examined, and decided by the CBRC Office at the place where the branch is to be located.
To apply for the business opening of a branch of a foreign bank to be formed, the applicant shall submit the application materials to the CBRC Office at the place where the branch is to be located, and send a copy thereof to the CBRC Sub-office at the place where the branch is to be located.
The CBRC Office at the place where the branch is to be located shall, within 20 days of acceptance of the application, make a decision to approve or disapprove the application, notify the applicant in writing of the decision, and send a copy of the decision to the CBRC. In the case of disapproval, reasons shall be explained.
Article 38 To apply for the business opening of a branch of a foreign bank, the applicant shall submit the written opinion on the branch's passing the acceptance check for business opening and the following application materials in duplicate to the CBRC Office at the place where the branch is to be located, and send one copy thereof to the CBRC Sub-office at the place where the branch is to be located:
(1) A written application for business opening addressed to the Chairman of the CBRC as signed by the person in charge of the preparatory team, containing the name, business address, working capital, and business scope of the branch to be formed and the name of the proposed president of the branch, among others; and, if there is a representative office in the same city where the branch is to be located, an application for closing the representative office.
(2) A completed application form for business opening.
(3) Relevant materials required for the confirmation of the office qualification of the proposed president of the branch.
(4) The audit report before business opening and the capital verification certificate issued by a statutory capital verification agency.
(5) A letter of guarantee issued by the foreign bank to assume liabilities for the taxes and obligations of the branch to be formed.
(6) The organizational structure chart of the branch to be formed, the job description of each post, and the internal authorization and reporting routes.
(7) The names, resumes, and training records of the personnel of the branch to be formed.
(8) The safety and fire protection device compliance certificates of the business premises or the photocopies of relevant certificates.
(9) A photocopy of a certificate of title to, a certificate of right to use, or a contract to lease the business premises.
(10) Other materials as required by the CBRC.
Article 39 A branch of a foreign bank shall, after receipt of the approval document for business opening and obtaining a financial business permit, undergo the registration procedure with the administrative department for industry and commerce, and obtain a business license.
A branch of a foreign bank shall open for business within six months of obtaining a business license. If it is unable to open for business within the period, it shall report to the CBRC Sub-office at place where it is located one month before the expiry of the period for business opening. The period for business opening may be extended by not more than three months.
If a branch of a foreign bank fails to open for business within the period specified in the preceding paragraph, the approval document for business opening shall be invalidated, and the organ deciding on its business opening shall cancel the business opening permit, retract the financial business permit, and issue an announcement.
Section 4 Formation of a Branch of a Wholly Foreign-Funded Bank or a Chinese-Foreign Equity Joint Venture Bank
Article 40 To form a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall meet the following conditions:
(1) It shall provide, free of charge, working capital o to the branch to be formed, provided that the sum of working capital provided for all of its branch offices shall not exceed 60% of the total capital of the head office.
(2) Its major regulatory indicators satisfy the regulatory requirements.
(3) The prudential conditions as set out by the CBRC.
Article 41 The formation of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall undergo two stages: formation preparation and business opening.
Article 42 An application for the formation preparation of a province branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to be subject to the direct supervision of the CBRC shall be accepted, examined, and decided by the CBRC. An application for the formation preparation of any other branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall be accepted, examined, and decided by the CBRC office at the place where the branch is to be located.
To apply for the formation preparation of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the application materials to the CBRC Office at the place where the branch is to be located, and send a copy thereof to the CBRC Sub-office at the place where the branch is to be located.
The CBRC or the CBRC Office at the place where the branch is to be located shall, within six months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained. Under special circumstances, the CBRC or the CBRC office at the place where the branch is to be located may appropriately extend the period of examination, but the applicant shall be notified of the extension in writing and the extension may not exceed three months.
Article 43 To apply for the formation preparation of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where the branch is to be located, and send one copy thereof to the CBRC Sub-office at the place where the branch is to be located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant, containing the name, location, working capital, and types of business, among others, of the branch to be formed.
(2) A feasibility study report, containing the basic information on the applicant, an analysis of the market prospect of the branch to be formed, a comprehensive business development plan, a management organizational structure, and a forecast of the scale of assets and liabilities and profit or loss during the three years after business opening, among others.
(3) The bylaws of the applicant.
(4) The annual reports of the applicant.
(5) The anti-money laundering rules of the applicant.
(6) A photocopy of the business license of the applicant.
(7) A resolution to form the branch as adopted by the board of directors of the applicant.
(8) Other materials as required by the CBRC.
Article 44 The applicant shall, within 15 days of receipt of the approval document for formation preparation, obtain an application form for business opening from the CBRC Sub-office at the place where the branch is to be located, and start the preparatory work. The preparatory period shall be six months from the day when the application for formation preparation is approved.
If the applicant fails to complete the preparatory work within six months, the applicant shall report to the CBRC Sub-office at the place where the branch is to be located one month before the expiry of the preparatory period. The preparatory period may be extended by not more than three months.
The applicant shall submit a business opening application before the expiry of the period specified in the preceding paragraph; otherwise, the approval document for formation preparation shall be invalidated.
Article 45 After the preparatory work for the formation of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank is completed, the applicant shall apply to the CBRC Office at the place where the branch is to be located for an acceptance check. Upon passing the acceptance check, the applicant may apply for business opening. An application for the business opening of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall be accepted, examined, and decided by the CBRC Office at the place where the branch is to be located.
To apply for the business opening of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the application materials to the CBRC Office at the place where the branch is to be located, and send a copy thereof to the CBRC Sub-office at the place where the branch is to be located.
The CBRC Office at the place where the branch is to be located shall, within two months of receipt of complete application materials, make a decision to approve or disapprove the application, notify the applicant in writing of the decision, and send a copy of the decision to the CBRC. In the case of disapproval, reasons shall be explained.
Article 46 To apply for the business opening of a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the applicant shall submit the written opinion on the branch's passing the acceptance check for business opening and the following application materials in duplicate to the CBRC Office at the place where the branch is to be located, and send one copy thereof to the CBRC Sub-office at the place where the branch is to be located:
(1) A written application for business opening addressed to the Chairman of the CBRC as signed by the person in charge of the preparatory team, containing the name, business address, working capital, and business scope of the branch to be formed and the name of the proposed president of the branch, among others.
(2) A completed application form for business opening.
(3) Relevant materials required for the confirmation of the office qualification of the proposed president of the branch.
(4) The audit report before business opening and the capital verification certificate issued by a statutory capital verification agency.
(5) The safety and fire protection device compliance certificates of the business premises or the photocopies of relevant certificates.
(6) The organizational structure chart of the branch to be formed, the job description of each post, and the internal authorization and reporting routes.
(7) The names, resumes, and training records of the personnel of the branch to be formed.
(8) A photocopy of a certificate of title to, a certificate of right to use, or a contract to lease the business premises.
(9) Other materials as required by the CBRC.
Article 47 A branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall, after receipt of the approval document for business opening and obtaining a financial business permit, undergo the registration procedure with the administrative department for industry and commerce, and obtain a business license.
A branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall open for business within six months of obtaining a business license. If it is unable to open for business within the period, it shall report to the CBRC Sub-office at its place where it is located one month before the expiry of the period for business opening. The period for business opening may be extended by not more than three months.
If a branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank fails to open for business within the period specified in the preceding paragraph, the approval document for business opening shall be invalidated, and the organ deciding on its business opening shall cancel the business opening permit, retract the financial business permit, and issue an announcement.
Section 5 Formation of Sub-branches
Article 48 To form a sub-branch, the applicant shall have an establishment at or above the branch level in the same administrative division of the city where the sub-branch to be formed is located. The same administrative division of the city where the sub-branch to be formed is located means the city or an administrative division below the city.
For a bank from Hong Kong or Macao region, its branch within Guangdong province may apply for forming a sub-branch in a different place within Guangdong province. For a wholly foreign-funded bank formed in the inland by a bank from Hong Kong or Macao region, its branch in Guangdong province may apply for forming a sub-branch in a different place within Guangdong province.
Article 49 To form a sub-branch, the applicant shall meet the following conditions:
(1) It has been one year or more since it officially opened for business, and the quality of its assets is good. In the case of a branch in Guangdong province of a bank from Hong Kong or Macao region or a wholly foreign-funded bank formed in the inland by a bank from Hong Kong or Macao region, it has been one year or more since the branch officially opened for business, and the quality of its assets is good.
(2) It has a relatively strong internal control capability, and has neither committed any serious violation of laws and regulations nor been involved in any major case resulting from internal management problems in the last year. In the case of a branch in Guangdong province of a bank from Hong Kong or Macao region or a wholly foreign-funded bank formed in the inland by a bank from Hong Kong or Macao region, the branch has a relatively strong internal control capability, and has neither committed any serious violation of laws and regulations nor been involved in any major case resulting from internal management problems in the last year.
(3) It has the ability to provide working capital.
(4) It has established rules and mechanisms for the performance evaluation, oversight, authorization, and adjustment of senior executives, and has sufficient business management professionals.
(5) Other prudential conditions as set out by the CBRC.
Article 50 The applicant that plans to form a sub-branch shall, three days before the formation preparation of the sub-branch, submit a formation preparation report to the local CBRC office at the place where the sub-branch is to be formed or the authorized local CBRC dispatched office and receive the application form for starting business, and commence formation preparation.
Article 51 The applicant for the formation of a sub-branch shall complete formation preparation within nine months from submitting the formation preparation report.
After the preparatory work for the formation of a sub-branch is completed, the applicant shall apply to the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is to be located for an acceptance check. Upon passing the acceptance check, the applicant may apply for business opening. An application for the business opening of a sub-branch shall be accepted, examined, and decided by the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is to be located.
To apply for the business opening of a sub-branch to be formed, the applicant shall submit the application materials to the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is to be located.
The CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is to be located shall, within 30 days of acceptance of the application, make a decision to approve or disapprove the application, notify the applicant in writing of the decision, and send a copy thereof to the CBRC and the CBRC Sub-office at the place where the sub-branch is to be located. In the case of disapproval, reasons shall be explained.
If the applicant fails to submit an application for starting business within the prescribed time limit, it shall report to the local CBRC office at the place where the sub-branch is to be formed or the authorized local CBRC dispatched office in a timely manner.
Article 52 To apply for the business opening of a sub-branch, the applicant shall submit the written opinion on the sub-branch's passing the acceptance check for business opening and the following application materials in duplicate to the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is to be located:
(1) A written application for business opening addressed to the person in charge of the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is to be located as signed by the person in charge of the preparatory team, containing the name, business address, working capital, and business scope of the sub-branch to be formed and the name of the proposed president of the sub-branch, among others.
(2) A completed application form for business opening.
(3) A capital verification certificate issued by a statutory capital verification agency, proving that the working capital commensurate with its business scale has been received.
(4) Relevant materials required for the confirmation of the office qualification of the proposed president of the management sub-branch.
(5) The organizational structure chart of the sub-branch to be formed, the job description of each post, and the internal authorization and reporting routes.
(6) The names, resumes, and training records of the personnel of the sub-branch to be formed.
(7) A photocopy of a certificate of title to, a certificate of right to use, or a contract to lease the business premises.
(8) The safety and fire protection device compliance certificates of the business premises or the photocopies of relevant certificates.
(9) Other materials as required by the CBRC.
Article 53 A sub-branch shall, after receipt of the approval document for business opening and obtaining a financial business permit, undergo the registration procedure with the administrative department for industry and commerce, and obtain a business license.
The sub-branch shall open for business within six months of obtaining a business license. If it is unable to open for business within the period, it shall report to the CBRC Sub-office at the place where it is located one month before the expiry of the period for business opening. The period for business opening may be extended by not more than three months.
If the sub-branch fails to open for business within the period specified in the preceding paragraph, the approval document for business opening shall be invalidated, and the authority deciding on its business opening shall cancel the business opening permit, retract the financial business permit, and issue an announcement.
Section 6 Formation of a Representative Office of a Foreign Bank
Article 54 To form a representative office of a foreign bank, the applicant shall meet the following conditions:
(1) It has sustained profitability, has a good credit standing, and has no record of any serious violation of laws and regulations.
(2) It has experience in engaging in international financial activities.
(3) It has effective anti-money laundering rules.
(4) It is effectively regulated by the financial regulatory authority of the country or region where it is located, and has obtained an approval of its application from the financial regulatory authority of the country or region where it is located.
(5) The prudential conditions as set out in Article 5 of these Measures.
The country or region where the foreign bank to form a representative office is located shall have a good economic condition and a sound financial regulatory system, and the financial regulatory authority thereof has established a sound supervision cooperation mechanism with the CBRC.
Article 55 A foreign bank that has formed any for-profit establishment in China may not form any representative office in addition to the existing one(s), unless the additional representative office to be formed is to be located in a region to which any regional economic development strategy or related policy of the state applies.
To form any additional representative office in China, a foreign bank shall meet the conditions as set out in Article 57 of these Measures, and its existing establishments in China shall have no record of any serious violation of laws and regulations.
A foreign bank may not concurrently have a for-profit establishment and a representative office in the same city.
Article 56 An application for the formation of a representative office of a foreign bank shall be accepted, examined, and decided by the CBRC Office at the place where the representative office is to be located.
To apply for the formation of a representative office, a foreign bank shall submit the application materials to the CBRC Office at the place where the representative office is to be located, and send a copy thereof to the CBRC Sub-office at the place where the representative office is to be located.
The CBRC Office at the place where the representative office is to be located shall, within six months of acceptance of the application, make a decision to approve or disapprove the application, notify the applicant in writing of the decision, and send a copy thereof to the CBRC. In the case of disapproval, reasons shall be explained.
Article 57 To apply for the formation of a representative office of a foreign bank, the applicant shall submit the following application materials in duplicate to the CBRC Office at the place where the representative office is to be located, and send one copy thereof to the CBRC Sub-office at the place where the representative office is to be located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant, containing the name and location of the representative office to be formed and the name of the proposed chief representative, among others.
(2) A completed application form for the formation of a representative office.
(3) A feasibility study report, containing the basic information on the applicant and the purposes and a plan of the representative office to be formed, among others.
(4) The bylaws of the applicant.
(5) The organization structure charts of the applicant and the group to which it belongs, a list of principal shareholders, and a list of overseas branch offices and affiliates.
(6) The applicant's annual reports for the last three years.
(7) The anti-money laundering rules of the applicant.
(8) A photocopy of the business license or financial business permit issued by the financial regulatory authority of the country or region where the applicant is located and a written opinion thereof on its application.
(9) Relevant materials required for the confirmation of the office qualification of the proposed chief representative.
(10) In the case of formation of a representative office for the first time, a certificate issued by a banking financial institution registered in China to prove that it serves as an agent for the foreign bank and an introduction to the financial system and a summary of the relevant financial regulation legislation of the country or region where the applicant is located.
(11) Other materials as required by the CBRC.
Article 58 A representative office of a foreign bank shall, after its formation has been approved, undergo the registration procedure with the administrative department for industry and commerce on the basis of the approval document.
A representative office of a foreign bank shall move into a fixed office place within six months from the day when its formation is approved by the CBRC, and file relevant materials with the CBRC sub-office at the place where it is located after moving into the fixed office place.
If a representative office of a foreign bank fails to move into a fixed office place within the period specified in the preceding paragraph, the approval document on the formation of the representative office shall be invalidated.
Section 7 Investment in the formation of and purchase of shares of domestic banking financial institutions
Article 59 Where a wholly foreign-owned bank or a Chinese-foreign equity joint venture bank applies for investment in the formation of or purchase of shares of a domestic banking financial institution, the applicant shall meet the following conditions:
(1) It has a sound corporate governance structure.
(2) It has sound and effective risk management and internal control.
(3) It has sound consolidated management capability.
(4) Its major prudential regulatory indicators satisfy regulatory requirements.
(5) In principle, the balance of equity investment shall not exceed 50% of its net assets (on the basis of consolidated accounting statements).
(6) It has a sound and compliant information technology system and information security system, has a standardized data management system, and has technologies and measures to guarantee the continuous, effective and safe operation of business.
(7) It has no serious violation of law or regulation or major case resulting from internal management problems in the last two years, except in the case of investment in the formation of and purchase of shares of a domestic banking financial institution for the purpose of implementing inclusive financial policies, among others.
(8) It has earned profits in the last three consecutive accounting years.
(9) Its credit rating is good.
(10) It meets other prudential conditions prescribed in the rules of the CBRC.
Article 60 An application of a wholly foreign-owned bank or a Chinese-foreign equity joint venture bank for the investment in the formation of or purchase of shares of a domestic banking financial institution shall be accepted, examined and decided by the CBRC. The CBRC shall make a written decision to approve or disapprove the application within six months after accepting the application.
With respect to the matters relating to the investment in the formation of and purchase of shares of a domestic banking financial institution as mentioned in the preceding paragraph, if the formation shall be subject to approval by the CBRC or local CBRC office, or the qualification of a shareholder must be examined by the CBRC or the local CBRC office, the CBRC or the local CBRC office shall, when approving the formation or examining the qualification of a shareholder, examine at the same time the relevant licensing matters in respect of the formation and purchase of shares by the wholly foreign-owned bank or Chinese-foreign equity joint venture bank, and make a decision.
Article 61 To apply for investing in the formation of or purchasing shares of a domestic banking financial institution, the applicant shall submit the following application materials on foreign equity investment to the CBRC (in duplicate):
(1) An application form, including at least the basic information on the investee, the necessity and feasibility of the equity investment made by the investor, equity investment and follow-up integration plan, development plan, existing risks, and countermeasures.
(2) Resolution of the applicant's shareholders on approving the investment in a domestic banking financial institution.
(3) Resolution of the investee's shareholders' meeting (assembly) on approving the absorption of investment made by a commercial bank.
(4) Equity investment agreement.
(5) A feasibility study report, including at least the basic information on the investee, the necessity and feasibility of the equity investment made by the investor, the analysis and comparison of the capital adequacy ratio, liquidity, profitability, and other business conditions before and after equity investment, trading structure and follow-up arrangements, integration plans, development plans, existing risks and countermeasures.
(6) The applicant's audited financial reports and business development reports in the last three years.
(7) The investee's audited financial reports and business development reports in the last three years.
(8) Basic information on the investee and basic information on the shareholders as partners.
(9) The risk isolation rules, consolidated management rules, detailed rules for the implementation of affiliated transactions and other information of the applicant and the invested domestic banking financial institution.
(10) The applicant's comprehensive business strategy and the implementation thereof.
(11) Any serious violation of law or regulation or major case resulting from internal management problems of the applicant in the last two years.
(12) Other documents required by the CBRC under the prudential principle.
Article 62 The provisions on the investment in the formation of and purchase of shares of a domestic banking financial institution by an overseas financial institution as a promoter or strategic investor shall apply, mutatis mutandis, to the investment in the formation of and purchase of shares of a domestic banking financial institution by a wholly foreign-owned bank or a Chinese-foreign equity joint venture bank as a promoter or strategic investor.”
For the purpose of this section, ‘banking financial institutions' means commercial banks, rural cooperative banks, rural credit cooperatives and other public deposit-taking financial institutions, and policy banks formed within the territory of the People's Republic of China.
The provisions on banking financial institutions in this section shall apply to the financial asset management companies, trust companies, enterprise group finance companies, financial leasing companies, auto finance companies, money brokerage companies, and consumer finance companies formed within the territory of the People's Republic of China, and other financial institutions formed with the approval of the CBRC.
Chapter III Modification of an Institution
Section 1 Modification of Registered Capital or Working Capital
Article 63 For a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to modify its registered capital, or for a branch of a foreign bank to modify its working capital, the following conditions shall be met:
(1) A resolution proposing the modification has been adopted by each of the boards of directors of the wholly foreign-funded bank and its shareholder(s) or the Chinese-foreign equity joint venture bank and its shareholders or by the board of director of the foreign bank.
(2) The application has been approved by the financial regulatory authority of the country or region at the place where each shareholder of the wholly foreign-funded bank or each foreign shareholder of the Chinese-foreign equity joint venture bank is located.
Article 64 An application for the modification of the registered capital of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC shall be accepted, examined, and decided by the CBRC. An application for the modification of the registered capital of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank or the working capital of a branch of a foreign bank shall be accepted, examined, and decided by the local CBRC office.
For a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to modify its registered capital, or for a branch of a foreign bank to modify its working capital, the applicant shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC or the CBRC Office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 65 For a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to modify its registered capital, or for a branch of a foreign bank to modify its working capital, the applicant shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant, including an explanation of the source of RMB funds if any overseas RMB funds are to be used to increase its registered capital or working capital.
(2) A feasibility study report, containing a comprehensive business development plan after the modification of registered capital or working capital, the purposes of capital, and the impact on the major regulatory indicators, among others.
(3) The resolutions of the boards of directors of the applicant and its shareholders regarding the modification of registered capital or the resolution of the board of directors of the foreign bank regarding the modification of working capital.
(4) A written opinion on the modification issued by the financial regulatory authority of the country or region where each shareholder of the applicant is located or the foreign bank is located, except for a Chinese non-financial institution shareholder of a Chinese-foreign equity joint venture bank.
(5) Other materials as required by the CBRC.
Article 66 Within 30 days after an application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank for modifying its registered capital, or an application of a branch of a foreign bank for modifying its working capital, is approved, it shall submit a capital verification certificate issued by a statutory capital verification agency to the CBRC or the CBRC Sub-office at the place where it is located.
Section 2 Modification of Shareholders
Article 67 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for the modification of its shareholders or the adjustment of the shareholding of its shareholders shall be accepted, examined and decided by the CBRC. An application of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank for the modification of its shareholders or the adjustment of the shareholding of its shareholders shall be accepted and preliminarily examined by the CBRC Office at the place where it is located, and be examined and decided by the CBRC.
The modification of its shareholders as mentioned in the preceding paragraph includes a shareholder's transfer of equity, the name change of a shareholder, or any other modification of a shareholder as recognized by the CBRC.
For the modification of the shareholders of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the potential transferees or successors shall meet the conditions as set out by Articles 10 to 14 of these Measures.
To apply for the modification of its shareholders or the adjustment of the shareholding of its shareholders, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
Where the application is to be accepted and preliminarily examined by the CBRC Office at the place where it is located, the CBRC Office at the place where it is located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within three months of acceptance of the application or of receipt of complete application materials, make a decision to approve or disapprove the modification, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 68 To apply for the modification of its shareholders or the adjustment of the shareholding proportion of its shareholders, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A resolution of the board of directors of the applicant regarding the modification.
(3) A resolution of the board of directors of the shareholder of the applicant or the proposed transferee or successor regarding the modification.
(4) A written opinion on the modification issued by the financial regulatory authority of the country or region where the shareholder of the applicant or the proposed transferee or successor is located if it is a financial institution.
(5) A transfer (or modification) agreement signed by the transferor of equity in the applicant with the proposed transferee or successor.
(6) An equity joint venture contract signed by all shareholders with the proposed transferee or successor, except for a wholly foreign-funded bank which has a sole shareholder.
(7) The bylaws, organizational structure chart, principal shareholders, lists of overseas branch offices and affiliates, annual reports for the last three years, and anti-money laundering rules of the proposed transferee or successor and a photocopy of the business license or financial business permit issued by the financial regulatory authority of the country where the proposed transferee or successor is located; however, if the proposed transferee of equity in a Chinese-foreign equity joint venture bank is a non-financial institution, the anti-money laundering rules are not required.
(8) An introduction to the financial system and a summary of the relevant financial regulation legislation of the country or region where the proposed transferee or successor is located if it is a foreign shareholder.
(9) Other materials as required by the CBRC.
Article 69 After an application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank for modifying its shareholders or adjusting the shareholding proportion of its shareholder is approved, it shall, within 30 days from the day when the CBRC makes a decision to approve the application, submit a capital verification certificate issued by a statutory capital verification agency and a certificate on the relevant transaction to the CBRC, and send a copy thereof to the CBRC Sub-office at the place where it is located.
Article 70 To modify its form of organization or undergo any business combination or division, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall comply with the Company Law of the People's Republic of China, the Commercial Bank Law of the People's Republic of China, and other relevant laws, administrative regulations, and rules, and meet the following conditions:
(1) A resolution proposing the modification has been adopted by each of the boards of directors of the wholly foreign-funded bank and its shareholder(s) or the Chinese-foreign equity joint venture bank and its shareholders.
(2) The application for the modification has been approved by the financial regulatory authority of the country or region where each shareholder is located.
(3) The wholly foreign-funded bank or the Chinese-foreign equity joint venture bank has developed a specific plan on the modification.
Where any modification of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank arises from the business combination or division of its shareholders, it shall make relevant adjustments according to the requirements of the CBRC.
Article 71 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank for modifying its form of organization or for any business combination or division shall be accepted, examined, and decided by the CBRC.
To apply for modifying its form of organization or for any business combination or division, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC.
The CBRC shall, within three months of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 72 The business combination of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank includes merger and consolidation. A business combination shall undergo two stages: preparation for combination and business opening after combination.
In the case of merger, the merging party shall apply to the CBRC for preparation for combination and business opening after combination according to the modification conditions and material requirements; and the merged party shall apply to the CBRC according to the termination conditions and material requirements if it is voluntarily terminated or apply to the CBRC according to the formation conditions and material requirements if it is modified into a branch office.
In the case of consolidation, the new institution shall apply to the CBRC for preparation for combination and business opening after combination according to the formation conditions and material requirements; and the former wholly foreign-funded bank or Chinese-foreign equity joint venture bank shall apply to the CBRC according to the termination conditions and material requirements.
Article 73 The division of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank includes split-off or spin-off and split-up. A division shall undergo two stages: preparation for division and business opening after division.
In the case of split-off or spin-off, the surviving party shall apply to the CBRC for preparation for division and business opening after division according to the modification conditions and material requirements; and a new institution shall apply to the CBRC according to the formation conditions and material requirements.
In the case of split-up, the new institutions shall apply to the CBRC for preparation for division and business opening after division according to the formation conditions and material requirements; and the former wholly foreign-funded bank or Chinese-foreign equity joint venture bank shall apply to the CBRC according to the dissolution conditions and material requirements.
Article 74 To apply for modifying its form of organization or for any business combination or division, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the following application materials in duplicate to the CBRC, in addition to those as set out in Article 71 or 72 of these Measures:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A plan on modification of form of organization or business combination or division.
(3) The resolutions of the boards of directors of each applicant and its shareholders regarding the modification.
(4) A written opinion on the modification issued by the financial regulatory authority of the country or region where each shareholder of each applicant is located, except for a Chinese non-financial institution shareholder of a Chinese-foreign equity joint venture bank.
(5) The business combination or division agreement signed by all shareholders of each applicant; the equity joint venture contract signed by all shareholders of each applicant, except for a wholly foreign-funded bank with a sole shareholder; and the bylaws, organizational structure chart, lists of the members of the board of directors and principal shareholders, and annual report for the last year of each shareholder of each applicant.
(6) The draft bylaws of the bank after the modification of form of organization or the business combination or division.
(7) Other materials as required by the CBRC.
The applicant shall send one copy of the written application and the plan on modification of form of organization or business combination or division to the CBRC Sub-offices at the places where the applicant and its branch offices are located.
Section 3 Amendment of Bylaws
Article 75 A wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall apply for amending its bylaws within one year after any content of its bylaws changes.
If the amendment of its bylaws only involves the name, domicile, equity, registered capital, or business scope of the wholly foreign-funded bank or Chinese-foreign equity joint venture bank, and such modification has been approved by the CBRC, it need not submit an application for amending its bylaws, but shall submit the amended bylaws to the CBRC and the CBRC Office at the place where it is located within six months from the day when the CBRC or the CBRC office at the place where it is located makes a decision to approve the modification.
Article 76 To apply for amending its bylaws, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall meet the following conditions:
(1) A resolution proposing the amendment of its bylaws has been adopted by each of the boards of directors of the wholly foreign-funded bank and its shareholder(s) or the Chinese-foreign equity joint venture bank and its shareholders.
(2) A law firm legally formed in China has issued a written legal opinion on the draft bylaws.
Article 77 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for amending its bylaws shall be accepted, examined, and decided by the CBRC. An application of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank for amending its bylaws shall be accepted, examined, and decided by the CBRC Office at the place where it is located.
To apply for amending its bylaws, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC or the CBRC Office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 78 To apply for amending its bylaws, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or president (chief executive officer or general manager) of the applicant.
(2) A resolution of the board of directors of the applicant regarding the amendment of bylaws.
(3) A resolution of the board of directors of each shareholder of the applicant regarding the amendment of bylaws.
(4) The former bylaws and the draft new bylaws of the applicant.
(5) A comparison table of changes between the former bylaws and the draft new bylaws.
(6) A written legal opinion on the draft new bylaws issued by a law firm legally formed in China.
(7) Other materials as required by the CBRC.
Section 4 Modification of Name
Article 79 To apply for modifying the name of an establishment in China of a foreign-funded bank, the applicant shall meet the following conditions:
(1) The modification has been approved by the financial regulatory authority of the country or region where the applicant is located.
(2) The applicant has obtained a new business license or financial business permit issued by the financial regulatory authority of the country or region where it is located.
(3) The applicant has made a commitment to assuming liabilities for the taxes and obligations of its branches in China.
Items (1) and (2) in the preceding paragraph shall not apply, where the name of the foreign-funded bank remains unchanged but it applies for modifying the name of its establishment in China.
Article 80 An application for the modification of the name of a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a branch of a foreign bank shall be accepted, examined, and decided by the CBRC. An application for the modification of the name of a representative office of a foreign bank shall be accepted, examined, and decided by the CBRC office at the place where it is located.
To modify its name, a foreign-funded bank shall submit the application materials to the CBRC or the CBRC office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where its establishment in China is located.
The CBRC or the CBRC office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 81 Where a shareholder of a wholly foreign-funded bank, a shareholder of a Chinese-foreign equity joint venture bank, or a foreign bank applies for modifying the name of its establishment in China as a result of any business combination or division or restructuring, among others, the applicant shall, within five days after the business combination or division or restructuring, among others, occurs, report to the CBRC and the CBRC Sub-office at the place where the establishment in China of the foreign-funded bank is located, and, within 30 days, submit the following application materials in duplicate to the CBRC and the CBRC office at the place where it is located, and send one copy thereof to the aforesaid CBRC Sub-office:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or president (chief executive officer or general manager) of the applicant.
(2) A completed application form for the modification of name.
(3) The bylaws of the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank.
(4) The organizational structure chart and the lists of the members of the board of directors and principal shareholder of the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank.
(5) A letter of guarantee signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the foreign bank to assume liabilities for the taxes and obligations of its branch in China.
(6) The consolidated financial reports of the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank.
(7) A written approval or opinion of the modification issued by the financial regulatory authority of the country or region where the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank is located.
(8) A photocopy of the business license or the financial business permit issued by the financial regulatory authority of the country or region where the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank is located after the modification of its name.
(9) Other materials as required by the CBRC.
Article 82 Where a shareholder of a wholly foreign-funded bank, a shareholder of a Chinese-foreign equity joint venture bank, or a foreign bank applies for modifying the name of its establishment in China for any other reason, the applicant shall, within five days after the reason occurs, report to the CBRC and the CBRC Sub-office at the place where the establishment in China of the foreign-funded bank is located, and, within 30 days, submit the following application materials in duplicate to the CBRC and the CBRC office at the place where it is located, and send one copy thereof to the aforesaid CBRC Sub-office:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or president (chief executive officer or general manager) of the applicant.
(2) A photocopy of the business license or the financial business permit issued by the financial regulatory authority of the country or region where the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank is located after the modification of its name.
(3) A written approval on the modification issued by the financial regulatory authority of the country or region where the shareholder of the wholly foreign-funded bank, the shareholder of the Chinese-foreign equity joint venture bank, or the foreign bank is located, and a written opinion on its application.
(4) Other materials as required by the CBRC.
Items (2) and (3) in the preceding paragraph shall not apply, where the name of the foreign-funded bank remains unchanged but it applies for modifying the name of its establishment in China.
The CBRC Sub-office at the place where a sub-branch of a foreign-funded bank is located is authorized by the CBRC to accept, examine, and decide an application for the modification of the name of the sub-branch as a result of the modification of its business premises.
Section 5 Modification of Domicile or Office Place in the Same City
Article 83 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for modifying its domicile in the same city shall be accepted, examined, and decided by the CBRC. An application of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank of the CBRC for modifying its domicile in the same city, or an application of a representative office of a foreign bank for modifying its office place in the same city shall be accepted, examined, and decided by the CBRC Sub-office at the place where it is located.
For a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to modify its domicile in the same city, or for a representative office of a foreign bank to modify its office place in the same city, the applicant shall submit the application materials to the CBRC or the CBRC Sub-office at the place where it is located.
The CBRC or the CBRC Sub-office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 84 For a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank to modify its domicile in the same city, or for a representative office of a foreign bank to modify its office place in the same city, it shall submit the following application materials in duplicate to the CBRC or the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC or the person in charge of the CBRC Sub-office at the place where it is located as signed by the authorized signatory of the applicant.
(2) A photocopy of a certificate of title to, a certificate of right to use, or a contract to lease the new domicile or office place.
(3) The safety and fire protection device compliance certificates of the new domicile or the photocopies of relevant certificates.
(4) Other materials as required by the CBRC.
Article 85 Where the actual location of a foreign-funded bank remains unchanged though the administrative division, street, or doorplate number, among others, in its address changes for any adjustment to the administrative division or other reasons, it need not apply for modification of domicile or office place, but shall report to the CBRC or the CBRC Sub-office within 15 days after the modification occurs, and, in the case of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, obtain a new financial business permit.
Chapter IV Termination of an Institution
Section 1 Dissolution of a Wholly Foreign-Funded Bank or a Chinese-Foreign Equity Joint Venture Bank
Article 86 Under any of the following circumstances, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank may be dissolved with the approval of the CBRC:
(1) Its duration as stated in its bylaws expires, or any other cause of dissolution as stated in its bylaws occurs.
(2) A resolution proposing its dissolution has been adopted at the shareholders' meeting.
(3) Its dissolution is required for any business combination or division.
Article 87 To apply for dissolution, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall meet the following conditions:
(1) A resolution proposing the dissolution has been adopted by each of the boards of directors of the wholly foreign-funded bank and its shareholder(s) or the Chinese-foreign equity joint venture bank and its shareholders.
(2) The application has been approved by the financial regulatory authority of the country or region where each shareholder of the wholly foreign-funded bank or each foreign shareholder of the Chinese-foreign equity joint venture bank is located.
(3) It has effective plans for asset disposal, debt repayment, and personnel resettlement.
Article 88 An application for the dissolution of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC shall be accepted, examined, and decided by the CBRC. An application for the dissolution of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank shall be accepted and preliminarily examined by the CBRC Office at the place where it is located, and be examined and decided by the CBRC.
To apply for its dissolution, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC Office at the place where it is located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within three months of acceptance of the application or of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 89 To apply for its dissolution, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall, before terminating its business activities, submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A resolution of the board of directors of the applicant regarding the dissolution.
(3) A resolution of the board of directors of each shareholder of the applicant regarding the dissolution of the wholly foreign-funded bank or the Chinese-foreign equity joint venture bank.
(4) A written opinion on the dissolution issued by the financial regulatory authority of the country or region where each shareholder of the wholly foreign-funded bank or each foreign shareholder of the Chinese-foreign equity joint venture bank is located.
(5) The plans for asset disposal, debt repayment, and personnel resettlement after the dissolution of the wholly foreign-funded bank or the Chinese-foreign equity joint venture bank and the names and contact methods of persons in charge of the follow-up matters.
(6) Other materials as required by the CBRC.
Section 2 Bankruptcy
Article 90 Where a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank is liquidated as a result of its dissolution, and the liquidation group discovers that its assets are inadequate for repayment of its debts, or where it is unable to repay its due debts, if it files a petition for bankruptcy voluntarily or at the request of its creditors, it shall apply to the CBRC before filing a petition with a court for bankruptcy.
Article 91 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for its bankruptcy shall be accepted, examined, and decided by the CBRC. An application of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank for its bankruptcy shall be accepted and preliminarily examined by the CBRC Office at the place where it is located, and be examined and decided by the CBRC.
To apply for its bankruptcy, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC Office at the place where it is located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within three months of acceptance of the application or of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 92 To apply for its bankruptcy, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant or the leader of the liquidation group.
(2) A resolution of the board of directors of the applicant regarding the bankruptcy.
(3) A resolution of the board of directors of each shareholder of the applicant regarding the bankruptcy of the wholly foreign-funded bank or the Chinese-foreign equity joint venture bank.
(4) A written opinion on the bankruptcy issued by the financial regulatory authority of the country or region where each shareholder of the wholly foreign-funded bank or each foreign shareholder of the Chinese-foreign equity joint venture bank is located.
(5) Other materials as required by the CBRC.
Items (2) through (4) are not applicable when the bankruptcy application is made by the liquidation group.
Section 3 Closedown of Branches
Article 93 To apply for closing down any of its branches, a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall meet the following conditions:
(1) A resolution proposing the closedown of the branch has been adopted by the board of directors of the applicant.
(2) In the case of a foreign bank, the closedown has been approved by the financial regulatory authority of the country or region where the foreign bank is located.
(3) It has effective plans for asset disposal, debt repayment, and personnel resettlement.
Article 94 An application of a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank under the direct supervision of the CBRC for closing down any of its branches shall be accepted, examined, and decided by the CBRC. An application for closing down a branch of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank shall be accepted, examined, and decided by the CBRC Office at the place where the branch is located. An application for closing down a branch of a foreign bank shall be accepted and preliminarily examined by the CBRC Office at the place where the branch is located, and be examined and decided by the CBRC
To apply for closing down any of its branches, a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall submit the application materials to the CBRC or the CBRC Office at the place where the branch is located, and send a copy thereof to the CBRC Sub-office at the place where the branch is located.
Where the application is to be accepted and preliminarily examined by the CBRC Office at the place where the branch to be closed down is located, the CBRC Office at the place where the branch is located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC or the CBRC Office at the place where the branch is located shall, within three months of acceptance of the application or of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 95 To apply for closing down any of its branches, a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall, before terminating its business activities, submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where the branch is located, and send one copy thereof to the CBRC Sub-office at the place where the branch is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A resolution of the board of directors of the applicant regarding the closedown of the branch.
(3) In the case of a foreign bank, a written opinion on its application issued by the financial regulatory authority of the country or region where the foreign bank is located.
(4) The plans for asset disposal, debt repayment, and personnel resettlement of the branch to be closed down and the names and contact methods of persons in charge of the follow-up matters.
(5) Other materials as required by the CBRC.
Section 4 Closedown of a Branch and Formation of a Representative Office in the Same City
Article 96 An application of a foreign bank for closing down any of its branches in China and forming a representative office in the same city shall be accepted and preliminarily examined by the CBRC Office at the place where the branch is located, and the application for closing down the branch shall be examined and decided by the CBRC. After the CBRC approves the application of the foreign bank for closing down the branch, the CBRC Office at the place where the branch is located shall examine and decide on the application of the foreign bank for forming a representative office in the same city.
To apply for closing down any of its branches in China and forming a representative office in the same city, a foreign bank shall submit the application materials to the CBRC Office at the place where the branch is located, and send a copy thereof to the CBRC Sub-office at the place where the branch is located. The CBRC Office at the place where the branch is located shall, within 20 days of acceptance of the application, submit the application materials and its preliminary examination opinion to the CBRC.
The CBRC or the CBRC Office at the place where the branch is located shall, within three months of acceptance of the application or of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 97 To apply for closing down any of its branches in China and forming a representative office in the same city, a foreign bank shall meet the conditions as set out in Articles 57 and 92 of these Measures, and, before terminating the business activities of the branch, submit the following application materials in duplicate to the CBRC Office at the place where the branch is located, and send one copy thereof to the CBRC Sub-office at the place where the branch is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A resolution of the board of directors of the applicant regarding the closedown of the branch and the formation of a representative office in the same city.
(3) In the case of a foreign bank, a written opinion on its application issued by the financial regulatory authority of the country or region where the foreign bank is located.
(4) The plans for asset disposal, debt repayment, and personnel resettlement of the branch to be closed down and the names and contact methods of persons in charge of the follow-up matters.
(5) Relevant materials required for the confirmation of the office qualification of the proposed chief representative.
(6) Other materials as required by the CBRC.
Section 5 Closedown of Sub-branches
Article 98 To apply for closing down any of its sub-branches, a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall meet the following conditions:
(1) A resolution proposing the closedown of the sub-branch has been adopted by the board of directors of the applicant.
(2) It has effective plans for asset disposal, debt repayment, and personnel resettlement.
Article 99 An application of a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank for closing down any of its sub-branches shall be accepted, examined, and decided by the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is located.
To apply for closing down any of its sub-branches, a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall submit the application materials to the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is located, and send a copy thereof to the CBRC Sub-office at the place where the sub-branch is located.
The CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 100 To apply for closing down any of its sub-branches, a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall, before terminating the business activities of the sub-branch, submit the following application materials in duplicate to the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is located:
(1) A written application addressed to the person in charge of the CBRC Office or the authorized CBRC Sub-office at the place where the sub-branch is located as signed by the authorized signatory of the applicant.
(2) A resolution of the board of directors of the applicant regarding the closedown of the sub-branch.
(3) The plans for asset disposal, debt repayment, and personnel resettlement of the sub-branch to be closed down and the names and contact methods of persons in charge of the follow-up matters.
(4) Other materials as required by the CBRC.
Section 6 Closedown of a Representative Office of a Foreign Bank
Article 101 To apply for closing down any of its representative offices, a foreign bank shall meet the following conditions:
(1) A resolution proposing the closedown of the representative office has been adopted by the board of directors of the applicant.
(2) Its application has been approved by the financial regulatory authority of the country or region where the applicant is located.
(3) It has effective plans for closedown and personnel resettlement.
Article 102 An application of a foreign bank for closing down any of its representative offices shall be accepted, examined, and decided by the CBRC Office at the place where the representative office is located.
To apply for closing down any of its representative offices, a foreign bank shall submit the application materials to the CBRC Office at the place where the representative office is located, and send a copy thereof to the CBRC Sub-office at the place where the representative office is located.
The CBRC Office at the place where the representative office is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 103 To apply for closing down any of its representative offices, a foreign bank shall submit the following materials in duplicate to the CBRC Office at the place where the representative office is located, and send one copy thereof to the CBRC Sub-office at the place where the representative office is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant or, under special circumstances, by the authorized signatory.
(2) A resolution of the board of directors of the applicant regarding the closedown of the representative office.
(3) A written opinion issued by the financial regulatory authority of the country or region where it is located regarding its application.
(4) The plans for the closedown and the personnel resettlement of the representative office and the names and contact methods of persons in charge of the follow-up matters.
(5) Other materials as required by the CBRC.
Chapter V Business Scope
Section 1 Launch of RMB Business
Article 104 The applications of for-profit foreign-funded banks for engaging in RMB business are classified into initial applications for engaging in RMB business and applications for expanding the range of clients of RMB business.
Article 105 To initially apply for engaging in RMB business, a for-profit foreign-funded bank shall meet the following conditions:
(1) It has operated in China for one year or more before application.
(2) Other prudential conditions as set out by the CBRC.
Where a branch of a foreign bank is restructured into a wholly foreign-funded bank in which the foreign bank is the sole investor, the time limits as mentioned in the preceding paragraph shall start from the date of formation of the branch.
Where a branch of a foreign bank has been approved to engage in RMB business, item (1), paragraph 1 of this Article shall not apply when any other branch of the foreign bank applies for engaging in RMB business.
Article 106 To apply for expanding the range of clients of RMB business, a for-profit foreign-funded bank granted approval to engage in RMB business shall meet the prudential conditions as set out by the CBRC.
To engage in RMB business for citizens within the territory of China, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall have business outlets in line with the characteristics and meeting the development needs of its business, in addition to meeting the prudential conditions as set out by the CBRC.
Article 107 An application of a for-profit foreign-funded bank under the direct supervision of the CBRC for engaging in RMB business or expanding the range of clients of RMB business shall be accepted, examined, and decided by the CBRC. An application of any other for-profit foreign-funded bank for engaging in RMB business or expanding the range of clients of RMB business shall be accepted, examined, and decided by the CBRC Office at the place where it is located.
To apply for engaging in RMB business or expanding the range of clients of RMB business, a for-profit foreign-funded bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC or the CBRC Office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 108 To apply for engaging in RMB business or expanding the range of clients of RMB business, the applicant shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A feasibility study report.
(3) The internal control rules and operating procedures for the business.
(4) Other materials as required by the CBRC.
Article 109 To initially engage in RMB business or to expand the range of clients of RMB business from clients other than citizens within the territory of China to include clients within the territory of China, a for-profit foreign-funded bank shall make preparations. The preparatory period shall be four months from the date of approval. If a for-profit foreign-funded bank fails to complete the preparatory work within four months, the approval document issued by the CBRC or the CBRC Office at the place where it is located shall be automatically invalidated.
Where a branch of a foreign bank has been approved to engage in RMB business, the foreign bank's any new branch within the territory of China may make preparations for the operation of RMB business, and, after passing the acceptance check of the CBRC office at the place where the branch is located, may submit an application for engaging in RMB business at the time of business opening.
Article 110 A branch of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall engage in RMB business as authorized within the business scope of its head office. Before launching the business, the branch shall file a letter of authorization issued by the head office with the CBRC Sub-office at the place where it is located, authorizing it to engage in RMB business, and make preparations. The preparatory period shall be four months.
The branch shall undergo the business license modification procedure with the administrative department for industry and commerce on the basis of the letter of confirmation of its RMB business as issued by the CBRC Office at the place where it is located after passing the acceptance check of the CBRC Sub-office at the place where it is located.
A sub-branch of a wholly foreign-funded bank, a Chinese-foreign equity joint venture bank, or a foreign bank shall engage in RMB business as authorized within the business scope of the head office or a branch of the bank. Before launching the business, the sub-branch shall file a letter of authorization issued by the head office or branch with the CBRC Sub-office at the place where it is located, authorizing it to engage in RMB business, and make preparations. The preparatory period shall be four months.
The sub-branch shall undergo the business license modification procedure with the administrative department for industry and commerce on the basis of the letter of confirmation of its RMB business as issued by the CBRC Sub-office at the place where it is located after passing the acceptance check of the CBRC Sub-office at the place where it is located.
Section 2 Issue of Debt and Capital Instruments
Article 111 To apply for issuing a debt or capital instrument approved by the CBRC within or outside China, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall meet the following conditions:
(1) It has a good corporate governance structure.
(2) Its main prudential regulatory indicators satisfy the regulatory requirements.
(3) The result of loan risk classification is true and accurate.
(4) Its provision coverage ratio satisfies the prescribed requirements, and its loan loss provision is adequate.
(5) Other prudential conditions as set out by the CBRC.
Article 112 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for issuing a debt or capital instrument approved by the CBRC shall be accepted, examined, and decided by the CBRC. An application of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank for issuing a debt or capital instrument approved by the CBRC shall be accepted and preliminarily examined by the CBRC Office at the place where it is located, and be examined and decided by the CBRC.
To apply for issuing a debt or capital instrument approved by the CBRC, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located.
The CBRC Office at the place where it is located shall, within 20 days of acceptance of the application, submit the application materials and its examination opinion to the CBRC. The CBRC shall, within three months of acceptance of the application or of receipt of complete application materials, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 113 To apply for issuing a debt or capital instrument approved by the CBRC, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A feasibility study report.
(3) A registration form for the issue of the debt or capital instrument.
(4) A resolution of the board of directors of the applicant regarding the issue of the debt or capital instrument.
(5) A resolution of the board of directors of each shareholder of the applicant regarding the issue of the debt or capital instrument.
(6) The applicant's audited financial reports for the last three years.
(7) A prospectus.
(8) The issue announcement or the issue prospectus.
(9) The issuer's special report on the repayment plan and guarantee measures for the current issue.
(10) The credit rating report for the financial bonds and a statement on arrangements for continuing follow-up rating issued by a credit rating agency.
(11) Other materials as required by the CBRC.
Section 3 Launch of Derivatives Business
Article 114 There are two types of qualification for a for-profit foreign-funded bank to launch derivatives business:
(1) Basic qualification: allowed to engage in hedging derivatives transactions only.
(2) General qualification: in addition to derivatives transactions allowed with a basic qualification, allowed to engage in non-hedging derivatives transactions.
Article 115 To launch the basic derivatives business, a for-profit foreign-funded bank shall meet the following conditions:
(1) It has sound risk management rules and internal control rules for derivatives transactions.
(2) It has, at a minimum, two dealers who have received special training of half a year or more on the transaction skills for relevant derivatives and have engaged in derivatives transactions or relevant transactions for two years or more, has, at a minimum, one person managing the relevant risks, has, at a minimum, one risk model researcher or risk analyst, and has, at a minimum, one person familiar with the hedge accounting operational procedures, rules, and norms, all of whom shall take their respective positions in a full-time manner, shall not concurrently take one another's positions, and shall have a spotless record.
(3) It has appropriate trading venues and equipment.
(4) It has special departments and relevant professionals to handle legal affairs and take charge of internal control and compliance inspection.
(5) Its main prudential regulatory indicators satisfy the regulatory requirements.
(6) Other prudential conditions as set out by the CBRC.
Article 116 To launch the general derivatives business, a for-profit foreign-funded bank shall, in addition to the conditions as set out in Article 116 of these Measures, meet the following conditions:
(1) It has a sound business processing system that automatically connects the front, middle, and back offices for derivative product transactions and a real-time risk management system.
(2) The person in charge of the derivatives business has five years or more of experience in directly participating in derivatives transactions or risk management, and has a spotless record.
(3) It has strict business segregation rules to ensure the effective segregation between the hedging business and the non-hedging business in market information, risk management, and profit and loss accounting.
(4) It has a sound risk management framework for market risk, operational risk, credit risk, and other risks.
(5) Other prudential conditions as set out by the CBRC.
Article 117 To apply for launching derivatives business, a branch of a foreign bank shall obtain a formal authorization from its head office (or regional headquarters). Its home country shall have the legal framework for regulating derivatives business, and the regulatory authority of its home country shall have the corresponding regulatory capability.
Where a branch of a foreign bank applies for launching derivatives business but doesn't meet the conditions as set out in Article 116 or Article 117 of these Measures, its head office (or regional headquarters) shall meet the aforesaid conditions, and the branch shall meet the following conditions:
(1) The formal authorization from its head office (or regional headquarters), authorizing the branch to conduct derivative transactions, among others, shall expressly include the types and limits of transactions.
(2) Except as otherwise specified by the head office, all derivatives transactions of the branch shall be uniformly balanced in real time through the system of the authorizing head office (or regional headquarters), and the head office (or regional headquarters) shall uniformly conduct balancing and exposure management and risk control.
Article 118 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for launching derivatives business shall be accepted, examined, and decided by the CBRC. An application of any other for-profit foreign-funded bank for launching derivatives business shall be accepted, examined, and decided by the CBRC Office at the place where it is located.
To apply for launching derivatives business, a for-profit foreign-funded bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located.
The CBRC or the CBRC Office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 119 To apply for launching derivatives business, a for-profit foreign-funded bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the authorized signatory of the applicant.
(2) A feasibility study report and a business plan or a business development plan.
(3) The internal management rules and regulations for derivatives business, including:
(a) the guiding principles for derivatives business, the operating procedures (which shall embody the principle of separation of the front, middle, and back offices in transactions), and an emergency response plan;
(b) the rules and procedures for approval of new types of business and new products;
(c) the rules for the types of derivatives and the risk control thereof;
(d) the risk model indicators and quantification management indicators for derivative transactions;
(e) the risk management rules and the internal audit rules;
(f) the management rules and post-assessment rules for the research and development of derivatives business;
(g) the code of conduct for dealers;
(h) the job responsibility rules for persons in change of transactions and the accountability system and incentive and restriction mechanism for the persons in charge at all levels and the dealers; and
(i) the training plans for the persons in charge and employees of the front, middle, and back offices.
(4) The accounting rules for derivative transactions.
(5) The names and resumes of the persons in charge and the major dealers.
(6) The risk management rules for derivative transactions, including but not limited to: the risk exposure quantification rules or risk limit authorization management rules.
(7) The testing reports on the safety and stability of the trading places, equipment and systems issued by a third party independently.
(8) Other materials as required by the CBRC.
Where a branch of a foreign bank applies for launching derivatives business but doesn't meet the conditions as set out in Article 116 or Article 117, it shall submit the following application materials, in addition to the aforesaid documents and materials of its head office (or regional headquarters):
(1) A formal written authorization from its head office (or regional headquarters) on the types and limits of derivative transactions to be conducted by the branch.
(2) Except as otherwise specified by the head office of a foreign bank, a letter of commitment issued by the head office (or regional headquarters) to ensure that all derivative transactions of the branch will be balanced in real time through the trading system of the authorizing head office (or regional headquarters) and that the head office (or regional headquarters) will be responsible for the balancing and exposure management and risk control.
Section 4 Launch of Credit Card Business
Article 120 The applications for launching credit card business include applications for card issuance business and applications for acquiring business. An applicant shall meet the following conditions:
(1) It has good corporate governance, complies with the relevant provisions of the CBRC in terms of its main prudential regulatory indicators, has an organizational structure and rules and regulations commensurate with its business development, and has adequate and effective internal control, risk management and accountability mechanisms.
(2) It has a good credit standing, has sound and effective mechanisms for internal control and case prevention and control, and has neither committed any serious violation of laws and regulations nor been involved in any major serious case in the past three years.
(3) It has directors and senior executives who are qualified to hold office and qualified employees. It has, at a minimum, one senior executive with expertise and management experience in credit card business, has necessary technical and managerial personnel to conduct credit card business, and has comprehensively implemented hierarchical authorization management.
(4) It has business premises and relevant facilities commensurate with its operations and necessary information technology resources.
(5) It has established in China business systems in compliance with laws and regulations and business management requirements, and has technical capabilities to ensure the information security and operational quality of the relevant business systems.
(6) It is qualified to conduct foreign exchange settlement and sale business if it plans to launch foreign currency credit card business.
(7) Other prudential conditions as set out by the CBRC.
Article 121 To launch credit card issuance business, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall, in addition to the conditions as set out in Article 121 of these Measures, meet the following conditions:
(1) It has a good foundation for conducting retail business. In the past three years, the size and structure of its personal savings and loan business have been stable, the customer number and structure of its personal savings and loan business have been good, its bank card business has been in good operating condition, and its connection to and use of the identity verification system and credit reporting system are in good condition.
(2) It has specialized systems for conducting credit card business. It has established within China the infrastructure for specialized operations, including but not limited to the host machine for card issuance business, an application management system for credit card business, a credit evaluation management system, a credit card account management system, an authorization system for credit card transactions, a credit card transaction monitoring and fake credit card transaction warning system, a credit card customer service center system, and a collection management system, and the relevant infrastructure has passed necessary security check and business testing, and is able to ensure the integrity and security of customer information and business data.
(3) The business is in line with its overall business strategy and development plan and conducive to improving the overall business competitiveness, and it is able to conduct business cost measuring, business scale monitoring, and basic breakeven calculation, among others, on an ongoing basis according to the actual business development.
Article 122 To launch credit card acquiring business, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall, in addition to the conditions as set out in Article 121 of these Measures, meet the following conditions:
(1) It has a good business foundation for launching acquiring business. In the past three years, the size and structure of its enterprise loan business have been stable, the customer number and structure of its enterprise loan business have been relatively stable, and its connection to and use of the identity verification system and credit reporting system are in good condition.
(2) It has specialized systems to support acquiring business. It has established within China the infrastructure for specialized operations, including but not limited to the host machine for acquiring business, an application management system for merchants, a credit evaluation management system for merchants, a merchant settlement account management system, an account management system, an acquiring transactions monitoring and fake transaction warning system, and a transaction authorization system, and the relevant infrastructure has passed necessary security check and business testing, and is able to ensure the integrity and security of customer information and business data.
(3) The business is in line with its overall business strategy and development plan and conducive to improving the business competitiveness, and it is able to conduct business cost measuring, business scale monitoring, and basic breakeven calculation, among others, on an ongoing basis according to the actual business development.
Article 123 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for launching credit card business shall be accepted, examined, and decided by the CBRC. An application of any other wholly foreign-funded bank or Chinese-foreign equity joint venture bank for launching credit card business shall be accepted, examined, and decided by the CBRC Office at the place where it is located.
To apply for launching credit card business, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC or the CBRC Office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 124 To apply for launching credit card business, a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the chairman of the board of directors or the president (chief executive officer or general manager) of the applicant.
(2) A feasibility study report.
(3) A development plan for credit card business.
(4) The management rules for credit card business.
(5) The credit card terms and conditions, which shall, at a minimum, include the name, type, functions, and uses of the credit card, to whom the cards are issued, the eligibility requirements and procedures for application, the range (including the limitations on use) and methods of use, the interest rate applicable to the credit card accounts, the charge items and rates for cardholders, and the rights and obligations of the card issuing bank, cardholders, and other parties.
(6) The draft designs of the credit card or the acceptable types of credit cards.
(7) An introduction to the operating facilities, business system, and disaster recovery system of credit card business.
(8) An introduction of the connection to and use of the identity verification system and credit reporting system.
(9) The testing reports and safety evaluation reports on the business system and disaster recovery system of credit card business.
(10) The emergency response plan and the business continuity plan for credit card business.
(11) The building of the risk management system for credit card business and the corresponding rules and regulations.
(12) An introduction to the management department for credit card business, the division of duties, and the primary person in charge.
(13) The contact person(s), telephone number(s), address, fax number, e-mail, and other contact methods of the applicant.
(14) Other materials as required by the CBRC.
Section 5 Launch of Securities Investment Fund Custody Business
Article 125 An application of a for-profit foreign-funded bank for launching any other business means an application for launching a business specified in Article 29 (13) or Article 31 (12) of the Regulation of the People's Republic of China on the Administration of Foreign-Funded Banks.
Article 126 To apply for launching any other business, a for-profit foreign-funded bank shall meet the following conditions:
(1) It has an organizational structure and rules and regulations commensurate with its business development, and has adequate and effective internal control, risk management and accountability mechanisms.
(2) The business is not in conflict with laws and regulations currently in force.
(3) Its main prudential regulatory indicators satisfy the regulatory requirements.
(4) The business is in line with the strategic development orientation and direction of the foreign-funded bank.
(5) The business has been approved under the internal decision-making procedures.
(6) It has necessary technical and managerial personnel for conducting the business, and has comprehensively implemented hierarchical authorization management.
(7) It has business premises and relevant facilities commensurate with its operations.
(8) It has necessary, safe, and compliant information technology systems for conducting the business, and has technologies and measures to ensure the effective and safe operation of the information technology systems.
(9) It has neither committed any serious violation of laws and regulations nor been involved in any major case resulting from internal management problems.
(10) Other prudential conditions as set out by the CBRC.
Article 127 An application of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC for launching any other business shall be accepted, examined, and decided by the CBRC. An application of any other for-profit foreign-funded bank for launching any other business shall be accepted, examined, and decided by the CBRC Office at the place where it is located.
To apply for launching any other business, a for-profit foreign-funded bank shall submit the application materials to the CBRC or the CBRC Office at the place where it is located, and send a copy thereof to the CBRC Sub-office at the place where it is located.
The CBRC or the CBRC Office at the place where it is located shall, within three months of acceptance of the application, make a decision to approve or disapprove the application, and notify the applicant in writing of the decision. In the case of disapproval, reasons shall be explained.
Article 128 To launch any other business, a for-profit foreign-funded bank shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where it is located, and send one copy thereof to the CBRC Sub-office at the place where it is located:
(1) A written application addressed to the Chairman of the CBRC as signed by the authorized signatory of the applicant.
(2) A detailed introduction to the business to be launched and a feasibility study report.
(3) The internal control rules and operating procedures for the business to be launched.
(4) An introduction to the personnel and business system for the business to be launched.
(5) Other materials as required by the CBRC.
Chapter VI Confirmation of the Office Qualifications of Directors and Senior Executives
Article 129 For the purposes of these Measures, “senior executives” means the executives of a foreign-funded bank who are subject to the office qualification confirmation by the CBRC or the CBRC Office at the place where it is located.
Article 130 To apply for serving as a director, senior executive, or chief representative of a foreign-funded bank, the proposed person shall be a natural person with full capacity for civil conduct, and meet the following basic conditions:
(1) Being familiar with and abiding by the laws, administrative regulations, and rules of China.
(2) Having good professional ethics, integrity, characters, and reputation, having a good record of compliance with laws and regulations, and having a spotless record.
(3) Having a university diploma at or above the undergraduate level, and having the expertise, work experience, and organization and management ability appropriate for the office; or having six years or more of work experience in the financial field or eight years or more of work experience in the relevant economic fields (including four years or more of work experience in the financial field), though without a university diploma at or above the undergraduate level.
(4) Having the independency required for his or her performance of duties.
A director, senior executive, or chief representative of a foreign-funded bank may not take office before his or her office qualification is confirmed by the CBRC or the CBRC Office at the place where it is located.
Article 131 Under any of the following circumstances, the proposed person may not serve as a director, senior executive, or chief representative of a foreign-funded bank:
(1) The person has a record of any crime committed intentionally or in gross negligence.
(2) The person has committed any misconduct against social morality, having any execrable effect.
(3) The person is liable personally or as a direct supervisor for any business activity in non-compliance with any law or regulation or any heavy loss of a previous employer, and the circumstances are serious.
(4) The person is or was a member of the board of directors or a senior executive of an institution which has been received, abolished, or declared bankrupt or whose business license has been revoked, unless it can be proved that the person is not personally liable for the receivership, abolition, declaration of bankruptcy, or revocation of business license.
(5) The person's violation of professional ethics or code of conduct or serious neglect of duties has caused any major loss or had any execrable effect.
(6) The person has instigated or participated in his or her employer's noncooperation in any supervisory action or case investigation conducted in accordance with the law.
(7) The person has been disqualified for life to serve as a director or a senior executive, or has been punished by the regulatory authorities or any other financial administrative department twice or more cumulatively.
(8) The person or the spouse thereof has a relatively large amount of due debts that have not been repaid, including but not limited to any overdue loan borrowed from the foreign-funded bank.
(9) There is any other evident conflict of interest between an office currently held and the office to be held by the person, or an office held by the person evidently distracts the person in his or her time and energy to perform his or her duties in the office to be held.
(10) The person does not meet the qualification requirements for office as set out in these Measures, but attempts to obtain a confirmation of his or her qualification to hold office by illegal means.
(11) The person is prohibited by any law, administrative regulation, or departmental rule from serving as a director, senior executive, or chief representative of a financial institution.
(12) Other circumstances as determined by the CBRC.
Article 132 In the replacement of the chairman of the board of directors or the president (chief executive officer or general manager), the president of a branch, or the president of a managing sub-branch of a for-profit foreign-funded bank, or the chief representative of a representative office of a foreign bank, before the office qualification of the proposed person is confirmed, the foreign-funded bank shall designate a person qualified for the corresponding office to act in that capacity, and report to the deciding authority for the office qualification confirmation within three days after the date of designation.
If the person designated to act in that capacity is not qualified for the office, the regulatory authority may order the foreign-funded bank to replace the person during a specified period. The period for the designated person to act in that capacity may not exceed six months. The foreign-funded bank shall, within the six months, elect or employ a person qualified for the office to officially hold the office.
Article 133 Where a person qualified as a senior executive without discontinuing his holding of office for one consecutive year or more is transferred to or concurrently holds a parallel or lower position in a foreign-funded bank of the same nature and type, no new application for the confirmation of office qualification of the person is required. The person shall report to the CBRC or the local CBRC dispatched office at the place where the employer is located for recordation within five days after holding the new position.
Article 134 In addition to the conditions as set out in Article 140 of these Measures, for the following offices, a director, a senior executive, or the chief representative of a foreign-funded bank shall meet the following conditions:
(1) To serve as the chairman of the board of directors of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the person shall have eight years or more of work experience in the financial field or 12 years or more of work experience in the relevant economic fields (including five years or more in the financial field).
(2) To serve as the vice-chairman of the board of directors of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the person shall have five years or more of work experience in the financial field or ten years or more of work experience in the relevant economic fields (including three years or more in the financial field).
(3) To serve as the president (chief executive officer or general manager) of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the person shall have eight years or more of work experience in the financial field or 12 years or more of work experience in the relevant economic fields (including four years or more in the financial field).
(4) To serve as the secretary for the board of directors, vice president (deputy general manager), assistant to president, chief operating officer, chief risk officer, chief financial officer (financial manager or person in charge of financial affairs), or chief technology officer (chief information officer) of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, or to serve as the president (general manager) of a branch of a wholly foreign-funded bank, a branch of a Chinese-foreign equity joint venture bank, or a branch of a foreign bank, the person shall have five years or more of work experience in the financial field or ten years or more of work experience in the relevant economic fields (including three years or more in the financial field).
(5) To serve as a director of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the person shall have five years or more of work experience related to economy, finance, law, or accounting, be able to judge the operating, management, and risk status of the bank based on financial statements and statistical statements, and understand the corporate governance structure and bylaws of the bank, the functions of the board of directors, and the rights and obligations of directors.
(6) To serve as the vice president (deputy general manager) of a branch of a wholly foreign-funded bank, a branch of a Chinese-foreign equity joint venture bank, or a branch of a foreign bank, or the president of a managing sub-branch, the person shall have four years or more of work experience in the financial field or six years or more of work experience in the relevant economic fields (including two years or more in the financial field).
(7) To serve as the person in charge of internal audit or compliance of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, the person shall have four years or more of work experience in the financial field.
(8) To serve as the person in charge of compliance of a branch of a wholly foreign-funded bank, a branch of a Chinese-foreign equity joint venture bank, or a branch of a foreign bank, the person shall have three years or more of work experience in the financial field.
(9) To serve as the chief representative of a representative office of a foreign bank, the person shall have three years or more of work experience in the financial field or six years or more of work experience in the relevant economic fields (including one year or more in the financial field).
Article 135 An application for the confirmation of qualification of the following persons of a foreign-funded bank shall be accepted, examined, and decided by the CBRC: the chairman of the board of directors, president (chief executive officer or general manager), directors, vice-chairman of the board of directors, secretary for the board of directors, vice president (deputy general manager), assistant to president, chief operating officer, chief risk officer, chief financial officer (financial manager or person in charge of financial affairs), chief technology officer (chief information officer), person in charge of internal audit, person in charge of compliance, and other persons that have a decision-making power on the business management or a significant impact on the risk control of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank under the direct supervision of the CBRC.
An application for the confirmation of qualification of the following persons shall be accepted and preliminarily examined by the CBRC Office at the place where the employing institution is located, and be examined and decided by the CBRC: the chairman of the board of directors and the president (chief executive officer or general manager) of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank not under the direct supervision of the CBRC. The CBRC Office at the place where the employing institution is located shall submit the application materials together with its examination opinion to the CBRC within 20 days of acceptance of the application.
An application for the confirmation of qualification for serving as the chairman of the board of directors or the president (chief executive officer or general manager) of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank, as initially appointed in the opening of the bank, shall be accepted, examined, and decided by the local CBRC Office as authorized by the CBRC.
An application for the confirmation of qualification of the following persons of a foreign-funded bank shall be accepted, examined, and decided by the CBRC Office at the place where the employing institution is located:
(1) The chairman of the board of directors, vice-chairman of the board of directors, secretary for the board of directors, vice president (deputy general manager), assistant to president, chief operating officer, chief risk officer, chief financial officer (financial manager or person in charge of financial affairs), chief technology officer (chief information officer), person in charge of internal audit, and person in charge of compliance of a wholly foreign-funded bank or a Chinese-foreign equity joint venture bank not under the direct supervision of the CBRC.
(2) The president (general manager), vice president (deputy general manager), person in charge of compliance, and president of a managing sub-branch of a branch of a wholly foreign-funded bank, a branch of a Chinese-foreign equity joint venture bank, or a branch of a foreign bank; and the chief representative of a representative office of a foreign bank.
(3) Other persons that have a decision-making power on business management or a significant impact on risk control.
Article 136 The CBRC or the local CBRC Office shall, within 30 days of acceptance of an application or receipt of complete application materials, make a decision to confirm or not to confirm it, and notify the applicant in writing of the decision. In the case of a decision not to confirm it, reasons shall be explained.
For an application for the qualification for the office of the chairman of the board of directors or president (chief executive officer or general manager) or the president (general manager) of a branch, as the person is appointed in the formation of the institution, the CBRC Office at the place where the employing institution is located shall, within two months of acceptance of the application, make a decision to confirm or not to confirm it in the official reply on the business opening of the institution; in the case of an application for the qualification for the office of the chief representative of a representative office, as the person is appointed in the formation of the representative office, the CBRC Office at the place where the employing institution is located shall, within six months of acceptance of the application, make a decision to confirm or not to confirm it in the official reply on the business opening of the representative office, and notify the applicant in writing of the decision. In the case of a decision not to confirm it, reasons shall be explained.
Article 137 To apply for the confirmation of the qualification for the office of a director, a senior executive, or a chief representative of a foreign-funded bank, the applicant shall submit the following application materials in duplicate to the CBRC or the CBRC Office at the place where the employing institution is located, and send one copy thereof to the CBRC Sub-office at the place where the employing institution is located:
(1) A written application addressed to the CBRC as signed by the authorized signatory of the applicant. Specifically, if the qualification is subject to the confirmation of the CBRC, the application shall be addressed to the Chairman of the CBRC; or, if it is subject to the confirmation of the CBRC Office, the application shall be addressed to the person in charge of the CBRC Office. The application shall specify the office to be held by the proposed person, the duties and powers, and the position of the office in the organizational structure of the institution.
(2) A power of attorney issued to the proposed person as signed by the authorized signatory of the applicant and the power of attorney issued to the signatory.
(3) The photocopies of the resume, identification, and academic credentials of the proposed person as signed by the authorized signatory.
(4) A detailed description of the experience of the proposed person in commercial bank business and related management and the plan on his or her performance of duties.
(5) 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.
(6) A resolution of the shareholders' meeting or the board of directors if it is required by the bylaws of the wholly foreign-funded bank or the Chinese-foreign equity joint venture bank.
(7) The exit audit report (economic responsibility audit report) on the proposed person or the performance evaluation report issued by his or her previous employer.
(8) An explanation on any office held or concurrently held by the proposed person in any bank or bank group or any affiliate thereof.
(9) Other materials as required by the CBRC.
Chapter VII Supplementary Provisions
Article 138 For the purposes of these Measures, “day” means a working day.
Article 139 For the purposes of these Measures, “more” as mentioned in these Measures includes the figure or level itself.
Article 140 For the purposes of these Measures, a “foreign-funded bank under the direct supervision of the CBRC” means a foreign-funded corporate bank that has primary branch offices in 15 or more provinces (regions or municipalities).
Article 141 Where a sub-branch is upgraded to a branch, it is required to conform to relevant provisions on the formation of branches.
Article 142 For the purposes of these Measures, a “managing sub-branch” means a sub-branch that has some or full jurisdiction over, in addition to itself, other sub-branches or the branch offices below the sub-branch level in terms of institution management, business management, and personnel management, among others.
Article 143 These Measures shall apply, mutatis mutandis, to the banking institutions formed in the inland/mainland by financial institutions from Hong Kong, Macao, and Taiwan regions, except as otherwise prescribed by the State Council.
Article 144 The CBRC shall be responsible for the issuance and management of the financial business permits of foreign-funded corporate banks under its direct supervision; where the local CBRC Offices or authorized CBRC Sub-offices shall be responsible for the issuance and management of the financial business permits of other for-profit foreign-funded banks.
Article 145 These Measures shall be subject to interpretation by the CBRC.
Article 146 These Measures shall come into force on the date of issuance. The Implementation Measures of the China Banking Regulatory Commission for the Administrative Licensing Items concerning Foreign-Funded Financial Institutions (Order No. 6 [2014], CBRC) shall be repealed concurrently.