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Article 1. The present Measures are formulated in order to regulate the foreign financial institutions' investment and shareholding in Chinese-funded financial institutions, and to optimize the capital structure of Chinese-funded financial institutions. Article 2. The present Measures shall apply to the overseas financial institutions investing and holding shares in Chinese-funded financial institutions. The term "foreign financial institutions" used herein include international financial institutions and financial institutions of foreign countries. The term "international financial institutions" refers to the World Bank and the affiliated agencies thereof, other intergovernmental development financial institutions, and other international financial institutions recognized by the China Bank Regulatory Commission (hereinafter referred to CBRC); the term "financial institutions of foreign countries" refers to the financial holding companies, commercial banks, securities companies, insurance companies, and funds that are registered in foreign countries, and other foreign financial institutions recognized by CBRC. The term "Chinese-funded financial institutions" used herein refers to the Chinese-funded commercial banks, urban credit cooperatives, rural credit cooperatives, trust and investment companies, enterprise group finance companies, and financial leasing companies that are established within China according to law, and other Chinese-funded financial institutions that are established upon approval of CBRC. The term "proportion of the investment or shareholding" used herein refers to the proportion that the capital contributed or the shares held account for in the paid-in total capital or total shares of the Chinese-funded financial institution. Article 3. CBRC shall supervise and administer the foreign financial institutions' investment and shareholding in Chinese-funded financial institutions according to law. Article 4. To make investment or hold shares in a Chinese-funded financial institution, a foreign financial institution shall obtain the approval of CBRC. Article 5. When making investment or holding shares in a Chinese-funded financial institution, a foreign financial institution shall do so on the basis of good faith and for the purpose of medium-and long-term investment. Article 6. When making investment or holding shares in a Chinese-funded financial institution, a foreign financial institution shall make the capital contribution in money. Article 7. To invest or hold shares in a Chinese-funded financial institutions, a foreign financial institution shall meet the following conditions: (1) For making investment or holding shares in a Chinese-funded commercial bank, the total assets of the foreign financial institution at the end of the last year shall, as a general principle, be no less than 10 billion US dollars; for making investment or holding shares in a Chinese-funded urban credit cooperative or rural credit cooperative, the total assets at the end of the last year shall be no less than 1 billion US dollars; for making investment or holding shares in a Chinese-funded non-bank financial institution, the total assets at the end of the last year shall be no less than 1 billion US dollars; (2) The long-term credit rank given by an international ranking institution recognized by CBRC for that foreign financial institution is good; (3) The foreign financial institution has been profit-making for two consecutive fiscal years; (4) If the foreign financial institution is a commercial bank, the capital adequacy rate shall be no less than 8%; if it is a non-bank financial institution, the total amount of capital shall be no less than 10% of the total amount of the risk-weighted assets; (5) The foreign financial institution has sound internal control system; (6) The place of registration of the foreign financial institution has sound supervision and administration system; (7) The home country (region) of the foreign financial institution has satisfactory economic status; and (8) Other prudential conditions provided for by CBRC. According to the risk status of the financial industry and the needs of regulation, CBRC may adjust the qualification requirements for foreign financial institutions for making investment and holding shares in Chinese-funded financial institutions. Article 8. The proportion of the investment or shareholding in a Chinese-funded financial institution by a single foreign financial institution may not exceed 20%. Article 9. When the aggregate proportion of the investment or shareholding in a non-listed Chinese-funded financial institution by several foreign financial institutions reaches or exceeds 25%, that non-listed financial institution shall be regarded as a foreign-funded financial institution in the supervision and administration. When the aggregate proportion of the investment or shareholding in a listed Chinese-funded financial institution by several foreign financial institutions reaches or exceeds 25%, that listed financial institution shall still be regarded as a Chinese-funded financial institution in the supervision and administration. Article 10. Where a foreign financial institution is to make investment or hold shares in a Chinese-funded financial institution, the Chinese-funded financial institution that absorbs the investment shall act as the applicant and file the application with CBRC: (1) Where a commercial bank solely funded by the state, or a joint stock commercial bank, or any other non-bank financial institution directly under the control of CBRC absorbs the investment of an overseas foreign financial institution, the applicant shall directly apply to CBRC for approval; (2) Where any Chinese-funded financial institution other than those provided for in Item (1) of this Article absorbs the investment of an overseas financial institution, the applicant shall file the application with the provincial agency of CBRC of the place where it is located, and the agency shall submit the application to CBRC for approval after examination. Article 11. A Chinese-funded financial institution shall submit the following documents when filing the application with CBRC for absorbing foreign investment: (1) Application form of the Chinese-funded financial institution for absorbing foreign investment; (2) Resolution of the shareholders' meeting or the board of directors of the Chinese-funded financial institution on consenting to the absorption of investment or the document of approval of the competent authority at the higher level; (3) Resolution of the shareholders' meeting or the board of directors of the foreign financial institution on consenting to investing and holding shares in the Chinese-funded financial institution; (4) Agreement of intent signed by the two parties; (5) Annual reports, or audited balance sheets, statements of profits, and other financial statements of the foreign financial institution for the last three years; (6) Information about the source of fund and the business operations of the foreign financial institution, etc.; and (7) Other relevant materials required by CBRC. Where the investor is a foreign financial institution, the Chinese-funded financial institution shall also submit the ranking reports of that foreign financial institution for the last two years made by an international ranking institution recognized by CBRC, and the documents of approval of the financial authority of the place of registration of that foreign financial institution. Article 12. CBRC shall make the decision on whether or not to grant the approval within 3 months from receiving the complete set of application documents; and if it decides not to grant the approval, it shall notify the applicant in writing and explain the reasons. Article 13. A foreign financial institution shall, within 60 workdays from receiving the decision of approval of CBRC, transfer the capital in full amount to the account of the Chinese-funded financial institution, and the capital shall be verified by an accounting firm recognized by CBRC. Article 14. Where a Chinese-funded financial institution alters its registered capital or shareholding structure as a result of the investment or shareholding by any foreign financial institution, it shall go through alteration formalities pursuant to the relevant provisions. Article 15. Where a Chinese-funded financial institution, in violation hereof, changes the shareholders or adjusts the shareholding structure without authorization, CBRC shall punish it pursuant to the relevant provisions. Article 16. Where a foreign financial institution that has already invested or held shares in a Chinese-funded financial institution increases its proportion of shareholding, the relevant provisions hereof shall apply. Article 17. The present Measures shall apply to the investment and shareholding in Chinese-funded financial institutions by financial institutions from Hong Kong, Macao and Taiwan area; and if the State Council has otherwise provisions, such provisions shall apply. Article 18. The present Measures shall not apply to the purchase of negotiable shares of listed Chinese-funded financial institutions by qualified foreign institutional investors. Article 19. Investment and shareholding in automobile financial companies shall be governed by the relevant provisions of the Measures for the Administration of Automobile Financial Companies. Article 20. The power to interpret the present Measures shall remain with CBRC. Article 21. The present Measures shall come into force on December 31, 2003. Where any relevant documents promulgated prior to the implementation hereof conflict with the present Measures, the latter shall prevail. |
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