Related stories

Provisional Rules on the Administration of Foreign Enterprises Engaging in Design Activities for Construction Projects within the People's Republic of China (the "Rules") Implementation Measures of the "Rules of the People's Republic of China on Customs Protection of Intellectual Property Rights" Decision on Amendments to the Law of Judges of the People's Republic of China Order No. 31 of the State Administration of Radio, Film, and Television (SARFT) - Provisions of Administration on Sino-Foreign Joint Films Production (the Provisions) Regulations on the Administration of Production and Transaction of Broadcasting and TV Programmes (The Regulations)

Rules for the Implementation of Regulations on the Management of Foreign Invested Financial Institutes for the People's Republic of China (the Rules)

中人民共和国外金融机构管理条例施华资实细则

Issued: July 26, 2004

Effective: September 1, 2004

Issuing Authority: China Banking Regulatory Commission (CBRC)

In addition to changing the name of "People's Bank of China" into "China Banking Regulatory Commission," the Rules provide for the following substantial changes:

First, the Rules repeal the requirements that were provided for in the previous Rules, i.e. that a foreign bank cannot open more than one branch per year; and any foreign-funded financial institution whose application has been rejected must wait at least one year to submit another application. They also significantly relax minimum and operating capital requirements for both the Chinese branches of foreign banks providing RMB services to Chinese enterprises and individuals, and Chinese branches of wholly foreign-owned banks and Sino-foreign joint-venture banks.

Second, the Rules make three adjustments to the application process: 1) application documents for opening a foreign bank branch or subsidiary may now be submitted directly to the CBRC headquarters with a copy sent to the corresponding local CBRC office; 2) application documents from a foreign-funded financial institution for undertakings subject to regulatory approval must first be submitted to the corresponding local CBRC office for preliminary review and then submitted directly to the CBRC headquarters for final approval; and 3) local CBRC offices are delegated the power of reviewing and approving the qualifications of the board members and senior executives of foreign banks. 

Third, the Rules feature some risk-focused and prudential supervisory requirements as well as some non-administrative supervisory measures. In line with international supervisory practices, the Rules also require special supervisory actions to be taken to address the non-prudent behaviour of foreign-funded financial institutions.

Lastly, in order to fulfil China's WTO commitments, the Rules embody certain requirements that level the playing field for domestic and foreign financial institutions.