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Decree of the Chairman of China Banking Regulatory Commission
No. 6 The Detailed Rules for the Implementation of the Regulations of the People's Republic of China on the Administration of Foreign-invested
Banks were adopted at the 53rd Chairmen's meeting of China Banking Regulatory Commission. They are hereby promulgated and shall enter
into force as of December 11, 2006.
Chairman of China Banking Regulatory Commission Liu Mingkang
November 24, 2006 Detailed Rules for the Implementation of the Regulations of the People's Republic of China on the Administration of Foreign-invested Banks Chapter I General Provisions
Article 1 The present Detailed Rules have been formulated under the Banking Administration Law of the People's Republic of China, the Law of the People's Republic of China on Commercial Banks and the Regulations of the People's Republic of China on the Administration of Foreign-invested Banks (hereinafter referred to as the Regulations).
Article 2 The banking regulatory institution of the State Council as mentioned in the Regulations refers to China Banking Regulatory Commission (hereinafter referred to as the CBRC). The banking regulatory institutions as mentioned therein refer to the CBRC and its dispatched institutions. Chapter II Establishment and Registration
Article 3 The "prudent conditions" as mentioned in the Regulations and the present Detailed Rules shall at least include the following items: (1) With a good reputation and social image; (2) With continuous good operating performances and good asset quality; (3) The managerial personnel having good professional quality and management abilities; (4) Having a sound risk management system and having the ability to control the risks in associated transactions; (5) Having a sound internal control system and effective management information system (MIS); (6) Having formulated financial statements by following the prudent accounting principle, and the accounting firm holding no reservation about the financial statements of the three years prior to filing the application; (7) Without record of serious violation of law or regulation; (8) Having an effective capital constraint and capital supplement mechanism; and (9) Having a reasonable corporate governance structure.
Items (8) and (9) are applicable to sole foreign-invested banks and the shareholders thereof, Chinese-foreign equity joint banks and the shareholders thereof, as well as foreign banks.
Article 4 The term "major shareholder" as mentioned in Article 11 of the Regulations refers to a commercial bank which holds more than 50% of the total capital or the total shares of a Chinese-foreign equity joint bank to be established, or a commercial bank which does not hold more than 50% of the total capital or the total shares of a Chinese-foreign equity joint bank to be established but is under any of the circumstances: (1) Holding more than half of the voting rights of the Chinese-foreign equity joint bank to be established; (2) Having the power to control the financial affairs and operating policies of the Chinese-foreign equity joint bank to be established; (3) Having the power to appoint or dismiss most of the members in the board of directors or the similar powerful institution of the Chinese-foreign equity joint bank to be established; or (4) Holding more than half of the voting rights in the board of directors or the similar powerful institution of the Chinese-foreign equity joint bank to be established.
The major shareholders of the Chinese-foreign equity joint bank shall list the Chinese-foreign equity joint bank into the consolidation scope.
Article 5 Nobody shall be a shareholder of a solely foreign-invested bank or Chinese-foreign equity joint bank if it is under any of the following circumstances: (1) There are obvious flaws in the corporate governance structure and mechanism thereof; (2) It has a complicated share-right relationship; (3) It has a number of associated enterprises; having frequent and abnormal associated transactions; (4) It does not have an outstanding core business or it engages in too many industries; or
Other circumstances which may result in significant negative influence to the bank to be established.
Article 6 The phrase "end of the year before the establishment application is put forward" as mentioned in Articles 10 through 12 refers to the end of the fiscal year prior to the date of application. The phrase "Having a capital adequacy ratio that is in accordance with the provisions of the financial regulatory authority" therein refers to that the capital adequacy ratio shall not be less than 8%.
Article 7 The "feasibility study report" as mentioned in Articles 14 of the Regulations and Articles 15, 26 and 30 of the present Detailed Rules shall include the basic information of the applicant, the analysis of the market prospect of the institution to be established, the business development plan of the institution to be established, as well as the organizational framework, and projection of asset-liability size and profit for the first three years, etc.
The "feasibility study report" as mentioned in Articles 20 of the Regulations shall include the basic information of the applicant and the aim and plan of the to-be-established representative office.
Article 8 The phrase "the name＃ of the institution to be established" as mentioned in Item 1, Article 14 of the Regulations and the "the title＃ of the representative office to be established" as mentioned in Article 20 of the Regulations shall include the name in Chinese and the one in a foreign language.
The nationality and form of liability of the foreign bank shall be marked in the name of a branch of a foreign bank or representative office.
Article 9 The phrases "Copies of business license", "copies of license documents on operating financial business", "Letters of authorization" and "Tax and liability guarantee of the foreign bank for its branch bank as in the case of applying for establishing a foreign branch bank" shall not only be notarized by an institution accredited by the home country or region but also be certified by the embassy or consulate of China in that country.
China Banking Regulatory Commission may, where necessary, request that other application documents as reported by the applicant shall not only be notarized by an institution accredited by the home country or region but also be certified by the embassy or consulate of China in that country.
Article 10 The phrase "annual financial statements" as mentioned in the Regulations and the present Detailed Rules shall be audited with the auditing opinions issued by the accredited accounting firm of the home country or region of the applicant. Annual financial statements printed in a language other than Chinese or English shall be accompanied by Chinese or English translations.
Article 11 Where it is the first time to establish a foreign bank, it shall report the abstract of the financial situations and relevant financial supervision and administration laws and regulations.
Where it is the first time to establish a representative office, it shall report the certification issued by a banking financial institution registered within the territory of China on that it has established a relationship of agency with the foreign bank.
Article 12 Where a foreign bank plans to establish a new branch within the territory of China, it shall meet the conditions as specified in Articles 9 and 12 of the Regulations, and the branch(es) which it has already established within the territory of China shall satisfy the prudent conditions as provided for by the CBRC, if a foreign bank plans to establish a new branch within the territory of China.
Where a foreign bank plans to establish a new representative office within the territory of China, it shall meet the conditions as specified in Articles 9 of the Regulations, and the representative office(s) which it has already established within the territory of China shall have no record that involves serious violation of any law or regulation.
Article 13 Where a solely foreign-invested bank or Chinese-foreign equity joint bank plans to establish a branch, it shall meet the prudent conditions as provided for by the CBRC.
Article 14 The phrase "the banking regulatory institution in the place where the institution is to be established" as mentioned in Articles 14, 17 and 20 of the Regulations refers to the banking regulatory bureau where the institution or representative office to be established is located. The phrase "timely submit" means that the aforesaid banking regulatory institution shall, submit to the CBRC the application materials with its examination auditing opinions within 20 days after it receives a complete set of the application materials.
The term "application materials" as mentioned in Articles 14, 17 and 20 of the Regulations, shall be reported to the institution dispatched by the CBRC to the place where the institution or representative office to be established is located.
The term "application" as mentioned in Article 14 and 20 of the Regulations shall be jointly signed by the chairmen of the board of directors or presidents (chief executives, general managers) of all capital contributors to establish the solely foreign-invested bank or Chinese-foreign equity joint bank, or shall be signed by the chairman of the board of directors or president of the foreign bank to establish a branch or representative office, and shall be addressed to the Chairman of the CBRC.
Article 15 For the establishment of a branch by a solely foreign-invested bank or Chinese-foreign equity joint bank, preparatory establishment application shall be first made, and the following application materials (in duplicate) shall be submitted to the banking regulatory bureau of the place where its headquarters is located and a copy thereof shall be sent to the banking regulatory bureau where the branch to be established is located: (1) An application signed by the chairman of the board of directors or president (chief executive officer or general manager) of the applicant and addressed to the Chairman of the CBRC, which shall include the name, location, operating capital, categories of business; (2) A feasibility study report; (3) The articles of association of the applicant; (4) The yearly report of the applicant; (5) The anti-money laundering system of the applicant; (6) A copy of the business license of the applicant; (7) A resolution which the board of directors agrees to establish a branch; and (8) Other materials as requested by the CBRC.
The application materials and its auditing opinions shall be submitted to the CBRC by the banking regulatory bureau of the place where the headquarters of the solely foreign-invested bank or of the Chinese-foreign equity joint bank are located within 20 days after it receives a complete set of application materials
The banking regulatory bureau of the place where the branch to be established is located shall submit its examination opinions to the CBRC within 20 days after application materials are received.
Article 16 To establish a foreign-invested business institution, the applicant shall, fetch a operation start application form from the institution dispatched by the CBRC to the place where the institution to be established is located within 15 days after it receives the preparatory establishment notice, and shall begin the preparatory establishment. The applicant shall form a preparatory establishment team responsible for the preparatory establishment within the period of preparatory establishment and shall send a name list of the persons taking charge of the preparatory establishment team to the local institution dispatched by the CBRC. The preparatory establishment team shall be dissolved automatically after the preparatory establishment is finished. The preparatory establishment period shall be six months.
In case the applicant fails to fetch a operation start application form within the prescribed time limit, the CBRC or any of its dispatched institutions shall not accept its application to establish a business institution in the same city within the territory of China within 1 year from the date of approval of the preparatory establishment.
Article 17 The applicant shall finish the following tasks in order to establish a business institution of a foreign-invested bank within the preparatory establishment period: (1) Establishing a sound corporate governance structure, and to submitting an explanation of the corporate governance structure to the local institution dispatched by the CBRC (only solely foreign-invested banks and Chinese-foreign equity joint banks are so requested); (2) Establishing an internal control system, including the control systems and operating procedures for the internal organizational structure, authorization and credit, credit fund management, money transactions, accounting as well as computer information management system, and submitting the aforesaid internal control systems and operating procedures to the local institution dispatched by the CBRC; (3) Equipping with a certain number of business personnel, who can meet the needs of its business development and have accepted relevant training in the relevant policies, regulations and professional knowledge, so as to meet the requirements for effective supervision and control of risks of the main businesses, the graded examination and approval and reexamination of business, the division of work and restraint of each other for the key posts; (4) Printing the important vouchers and documents for external use and submitting specimens to the local institution dispatched by the CBRC; (5) Being equipped with the safety protection facilities accredited by the relevant departments and submitting the copies of the pertinent certifications to the local institution dispatched by the CBRC; and (6) The internal control system, accounting system, and computer system shall be audited by a qualified accounting firm lawfully established within the territory of China before it starts business, and an audit report shall be submitted to the local institution dispatched by the CBRC.
Article 18 If an applicant applies for extending the preparatory establishment period, it shall file an application with the local institution dispatched by the CBRC one month before the expiration of the preparatory establishment period. The application shall be signed by the person responsible for the preparatory establishment team of the business institution of the foreign-invested bank.
The local institution dispatched by the CBRC shall make a decision of approval or disapproval of the extension of the preparatory establishment period within 15 days after it receives a complete set of application materials, and a written notice to the applicant shall be presented and simultaneously a copy shall be sent to the CBRC. If it makes a decision of disapproval, explanations shall be specified.
If the applicant, within the prescribed time limit, cannot file an application for the extension of the preparatory establishment period, the institution dispatched by the CBRC may not accept its application.
Article 19 The person in charge of the preparatory establishment team shall apply to the institution dispatched by the CBRC for a check before its operation starts when the preparatory establishment of a business institution of a foreign-invested bank is finished. The local institution dispatched by the CBRC shall make a check within 10 days. The local institution dispatched by the CBRC shall issue a written opinion on passing the check if the applicant passes the check. The local institution dispatched by the CBRC shall give it a written notice if the applicant cannot pass the check. The applicant may, after the lapse of 10 days from the receipt of the said notice, file a re-check application with the institution dispatched by the CBRC to the place where the institution is to be established.
Article 20 After an applicant fulfills the preparatory establishment and passes the examination, a written opinion in respect of passing the check, the operation start application signed by the person-in-charge of the preparatory establishment team of the to-be-established business institution of the foreign-invested bank and addressed to the Chairman of the CBRC along with the application materials (in duplicate) as described in Article 17 of the Regulations shall be submitted by the applicant to the banking regulatory bureaus of the place where the institution to be established is located, and a copy shall be simultaneously sent to the institution dispatched by the CBRC to the place where the institution to be established is located.
The banking regulatory bureau of the place where the institution to be established is located shall, submit the application materials, its written opinion on passing the check and its examination opinions to the CBRC within 20 days after it receives a complete set of operation start application materials.
Article 21 After a business institution of a foreign-invested bank acquires the approval for operation start, it shall fetch a financial business permit pursuant to the relevant provisions.
Article 22 The business institution of a foreign-invested bank shall start operations within 6 months after it fetches a business license. It may, under any special circumstance, extend the time limit for operation start upon approval of the local institution dispatched by the CBRC.
A business institution of a foreign-invested bank shall file a operation start extension application to the local institution dispatched by the CBRC 1 month before the expiration of the time limit for operation start if a business institution of a foreign-invested bank applies for extending the time limit for operation start. The application shall be signed by the chairman of the board of directors or president (chief executive officer, general manager) of the solely foreign-invested bank or Chinese-foreign equity joint bank, or by the president (general manager) of the branch of the foreign bank.
The local institution dispatched by the CBRC shall, decide to approve or disapprove the deferment of operation start, present a written notice to the applicant and simultaneously a copy shall be sent to the CBRC within 15 days after it receives a complete set of application materials. If it makes a decision of disapproval, it shall make an explanation.
The institution dispatched by the CBRC shall not accept its operation start extension application if a business institution of a foreign-invested bank cannot file an operation start postponement application within the prescribed time limit.
The maximum extended time limit for operation start shall be 3 months. The original approval of operation start shall be nullified automatically if the business institution of a foreign-invested bank cannot start operations after the expiration of the extended time limit. The business institution of a foreign-invested bank shall return its financial business permit to the CBRC. The CBRC or any of its dispatched institution shall not accept its application for the establishment of business institution in the same city within 1 year after the nullification of the original approval of operation start.
Article 23 A business institution of a foreign-invested bank shall submit to the local institution dispatched by the CBRC a written report of the date of operation start before it starts business, and it shall make an announcement on a national newspaper as designated by the CBRC and on a local newspaper as designated by the local institution dispatched by the CBRC.
Article 24 Articles 15 through 19 of the Regulations and Articles 16 through 23 of the Detailed Rules shall govern branches of the solely foreign-invested banks and branches of Chinese-foreign equity joint banks.
Article 25 A foreign bank may not only satisfy the conditions of the Regulations and the present Detailed Rules on the establishment of a solely foreign-invested bank if it plans to change its branch within China into a solely foreign-invested bank solely invested by its headquarters, but also be capable of implementing continuous business operations within the territory of China and effectively managing the solely foreign-invested bank to be established.
Article 26 A foreign bank shall simultaneously apply for the preparatory establishment of a solely foreign-invested bank and for changing all of its branches within China into branches of the solely foreign-invested bank and submit the following application materials (in duplicate) to the banking regulatory bureau of the place where the solely foreign-invested bank to be established is located if it plans to change its branch within China into a solely foreign-invested bank solely invested by its headquarters, , and a copy shall be sent to the institution dispatched by the CBRC to the place of each of its branches within China simultaneously. (1) An application, including the name, location, registered capital or operating capital of the solely foreign-invested bank and its branches, and the businesses for which the applicant applies, shall be signed by the chairman of the board of directors or president (chief executive or general manager) of the foreign bank and addressed to the Chairman of the CBRC; (2) A feasibility study report and a plan on the change of institution; (3) A draft of the articles of association of the solely foreign-invested bank to be established and the legal advice issued by a law firm lawfully established within China about the draft of the articles of association; (4) The resolution of the board of directors of a foreign bank on the consent to change the original branch of the foreign bank into a solely foreign-invested bank solely invested by its headquarters; (5) A letter of opinions signed by the chairman of the board of directors president (chief executive or general manager) of the foreign bank on the consent to inherit the rights, debts and taxation of the original branch of the foreign bank, and a letter of guarantee to continuously implement business within China and to effectively manage a solely foreign-invested bank; (6) The audited unified financial report of all the foreign bank's branches within China of the 2 years before filing the application (7) A written opinion on the change issued by the financial regulatory authority of the country or region where the applicant is located; (8) The applicant's annual statements of the recent 3 years; and (9) Other materials as requested by the CBRC.
The banking regulatory bureau of the place where the headquarters of a solely foreign-invested bank shall submit the application materials along with its examination opinions to the CBRC within 20 days after it receives a complete set of application materials.
The CBRC shall, make a decision of approval or disapproval of the change and present a written notice to the applicant within 6 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 27 Where a foreign bank plans to reserve one branch engaging in the wholesale business of foreign exchange, it shall simultaneously file an application when it applies for the preparatory establishment of a solely foreign-invested bank.
The original branch of a foreign bank shall determine the creditor's rights, debts and taxation which should be inherited by the branch of foreign bank and the solely foreign-invested bank, respectively. A checklist of the assets, liabilities, owner's equities, the application signed by the chairman or president (chief executive or general manager) and addressed to the Chairman of the CBRC, as well as the application materials (in duplicate) which is described in Article 26 of the Detailed Rules should be submitted to the local banking regulatory bureau of the place where the solely foreign-invested bank to be established is located, and a copy shall be sent to the institution dispatched by the CBRC to the place where the original branch of the foreign bank is located simultaneously.
Article 28 If a foreign bank changes its branch within China into a solely foreign-invested bank solely invested by its headquarters, the operating capital of the original branch of the foreign bank may, upon approval of the CBRC, be changed into registered capital of the solely foreign-invested bank or may be transferred back to its headquarters through merger-related capital verification.
Article 29 After it finishes its preparatory establishment and passes the check, as for a foreign bank planning to change its branch within China into a solely foreign funded bank solely invested by its headquarters, the letter of opinions on passing the check and the following application materials (in duplicate) shall be submitted to the local banking regulatory bureau of the place where the solely foreign-invested bank is located and a copy shall be sent to the institution dispatched by the CBRC to the place where the original branch of the foreign bank is located simultaneously: (1) An application signed by the person-in-charge of the preparatory team of the solely foreign-invested bank to be established and addressed to the Chairman of the CBRC, and the name, business address, registered capital or operating capital, and categories of business of the solely foreign-invested bank to be established shall be included ; (2) A checklist of the assets, liabilities, owner's equities of the solely foreign-invested bank to be established; (3) A capital verification certification issued by a qualified accounting firm lawfully established within China; (4) The name list, resumes, and copies of the identity cards and the academic credentials of the candidates for the chairman of the board of directors and president of the branch or intercity sub-branch of the solely foreign-invested bank; (5) An authorization to the president of the branch or intercity sub-branch of the solely foreign-invested bank; (6) Formal announcement of having no bad record as signed by the candidates; and (7) Other materials as requested by the CBRC.
The local financial regulatory bureau of the headquarters of the solely foreign-invested bank to be established shall submit the application materials, a written opinion on passing the check, and examination opinions to the CBRC within 20 days after it receive a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of operation start and present a written notice to the applicant within 2 months after it receives a complete set of the application materials. In case it makes a decision of disapproval, an explanation shall be specified.
Article 30 If a foreign bank plans to retain one branch doing the wholesale business of foreign exchange, it shall submit the following application materials (in duplicate) to the banking regulatory bureau of the headquarters of the solely foreign-invested bank when it applies for the operation start of the solely foreign-invested bank to be established simultaneously: (1) An application signed by the chairman of the board of directors or president (chief executive or general manager) and addressed to the CBRC, including the location, operating capital and categories of business of the branch to be maintained; (2) A feasibility study report; (3) A checklist of the assets, liabilities, owner's equities of the branch of foreign bank remained to engage in wholesale business of foreign exchange; (4) A capital verification certification issued by a qualified accounting firm lawfully established within China; and (5) Other materials as requested by the CBRC.
The local banking regulatory bureau of the place where the headquarters of the solely foreign-invested bank is located shall submit the application materials and its examination opinions to the CBRC within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of maintaining the foreign bank's branch working wholesale business of foreign exchange and send a written notice to the applicant within 2 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 31 When a foreign bank changes its branch within China into a foreign-invested bank solely invested by its headquarters, a foreign bank shall make an announcement on a national newspaper designated by the CBRC and on a local newspaper designated by the institution dispatched by the CBRC to the place where the solely foreign-invested bank to be established is located during the period of the preparatory establishment of the solely foreign-invested bank to be established and after it goes through the registration procedures,
Article 32 A representative office of a foreign bank shall go through the registration procedures in the administrative department for industry and commerce after it is established upon approval,.
The representative office of foreign bank shall make an announcement on a national newspaper designated by the CBRC and on a local newspaper designated by the institution designated by the CBRC to the place where the representative office is located after the representative office of foreign bank goes through the registration procedures.
The representative office of foreign bank shall, within 6 months from the date of approval of establishment of the CBRC, move into a fixed office. The original approval of the CBRC shall be invalidated automatically if it cannot begin operation within the time limit of 6 months.
Article 33 The representative office of foreign bank shall submit the following materials to the local institution dispatched by the CBRC after it moves into a fixed office: (1) The registration form of its basic information; (2) A copy of the industrial and commercial registration certificate; (3) The internal management system, including the duty arrangement, internal division and internal reporting system of the representative office; (4) A copy of the lease contract or property right certification of the office; (5) The information about the preparation of office facilities and about the rent of data communication lines from the telecom department; (6) The official seal, specimen of official document paper, and specimens of the name cards to be utilized by its personnel; and (7) Other materials as requested by the CBRC.
Article 34 The "other materials" as mentioned in Article 17 (6) of Article 17 of the Regulations shall at least include the copies of the identity card and the academic credentials of the principals, and their declarations of having no bad record as signed by them.
The "principals" as mentioned Article 17 and in the preceding Paragraph of this Article concerns the chairman of the board of directors and president (chief executive or general manger).
Article 35 A solely foreign-invested bank or Chinese-foreign equity joint bank shall submit the following application materials (in duplicate) to the local banking regulatory bureau, and a copy shall be simultaneously sent to the institution dispatched by the CBRC to the place where the business institution of the foreign-invested bank is located when a solely foreign-invested bank or Chinese-foreign equity joint bank plans to modify its registered capital, to change any shareholder or to adjust any shareholder's proportion of shares, or when a foreign bank plans to change the operating capital of any branch within China,: (1) An application signed by the chairman of the board of directors or president (chief executive or general manager) and addressed to the Chairman of the CBRC; (2) The decision made by the board of directors of the solely foreign-invested bank or Chinese-foreign equity joint bank about the item to be modified; (3) The decision made by the board of directors of each capital contributor of the solely foreign-invested bank or of the Chinese-foreign equity joint bank about the item to be modified, or the a written opinion signed by the legal representative of each capital contributor of the solely foreign-invested bank or of the Chinese-foreign equity joint bank about the item to be modified. The written opinions of the financial regulatory authority of the country or region where it is located shall be submitted if the transferor and the transferee of the solely foreign-invested bank or Chinese-foreign equity joint bank are financial institutions; (4) The transfer agreement or contract signed by the relevant shareholders of the solely foreign-invested bank or Chinese-foreign equity joint bank; and (5) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit the application materials and its examination opinions to the CBRC within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the modification and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 36 A business institution of a foreign-invested bank shall, hire a qualified accounting firm lawfully established within China to verify its capital within 30 days after it receives the approval document of the CBRC When it is approved to modify its registered capital or operating capital, change any shareholder or adjust any shareholder's proportion of shares, and the capital verification certification shall be submitted to the local institution dispatched by the CBRC.
Article 37 A foreign bank may file a preliminary application to the CBRC and submit the following application materials if it plans to change the name of any of its branch institutions within China due to merger or split-up. (1) An application signed by the chairman or president (chief executive or general manager) of a foreign bank and addressed to the CBRC; and (2) The merger or split-up license or approval as issued by the financial regulatory bureau of the country or region where the foreign bank is located.
The CBRC shall confirm the application by a signed letter after it receives a complete set of application materials.
The foreign bank shall, report it to the CBRC or to the institution dispatched by the CBRC to the place where the China-based branch institution of the foreign bank is located within 5 days after the formal merger or split-up, and the following materials (in duplicate) shall be submitted to the CBRC within 30 days: (1) An application signed by the chairman or president (chief executive or general manager) of the applicant and addressed to the CBRC; (2) An completed application form which is printed and distributed by the CBRC (3) The articles of association of the applicant; (4) The organizational structure, name list of the members of the board of directors and the major shareholders of the applicant; (5) The guarantee signed by the chairman or president (chief executive or general manager) to undertake the taxes and debts of the branch within China; (6) The applicant's unified financial statements; (7) The resumes, copies of the identity card and the academic credentials of the president (general manager) of the applicant's branch within the territory of China; (8) An authorization to the president (general manager) or chief executive of the China-based branch signed by the chairman or president (chief executive or general manager) of the applicant or by its authorized person; (9) A copy of the business license or of other financial business permit, and the license or approval of the adjustment of the foreign bank, which is issued by the financial regulatory authority of the country or region where the applicant is located; and (10) Other materials as requested by the CBRC.
The foreign bank shall send a copy to the institution dispatched by the CBRC to the place where its branch institution within China is located when it submits to the CBRC the preliminary application and formal application materials for modification.
The CBRC shall make a decision of approval or disapproval of the modification and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 38 A foreign bank shall submit the following application materials (in duplicate) to the CBRC when applies for modifying the name of any branch institution within China, and simultaneously a copy shall be sent to the institution dispatched by the CBRC to the place where the China-based branch institution of the foreign bank is located: (1) An application signed by the chairman of the board of directors or president (chief executive or general manager) of the applicant and addressed to the Chairman of the CBRC; (2) Copies of the business license or any other financial business permit after the name is changed and the name modification approval which is issued by the financial regulatory authority of the country or region where the foreign bank is located; and (3) Other materials as requested by the CBRC.
The CBRC shall make a decision of approval or disapproval of the modification and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 39 The registered capital or operating capital and business scope of a post-merger or post-split-up business institution of a foreign-invested bank shall be subject to a new approval of the CBRC.
Article 40 A solely foreign-invested bank or Chinese-foreign equity joint bank shall submit an application (in duplicate) signed by the chairman of the board of directors or president (chief executive or general manager) and addressed to the CBRC when it plans to modify its name, and a copy shall be a copy shall be sent to the institution dispatched to the place where its headquarters is located simultaneously.
The CBRC shall make a decision of approval or disapproval of the modification and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 41 A business institution or any of the branch institutions of a foreign-invested banks shall submit the application materials to the local institution dispatched by the CBRC when it plans to change its business place within the same city, or where a representative office of a foreign bank plans to change its office within the same place. (1) An application signed by the chairman or president (chief executive or general manager) of the solely foreign-invested bank or Chinese-foreign equity joint bank or president (general manager) of the branch of the foreign bank or chief representative of the representative office and addressed to the local institution dispatched by the CBRC; (2) A copy of the letter of intention to rent or buy the business place or office, in which the foreign-invested bank plans to move; and (3) Other materials as requested by the CBRC.
The local institution dispatched by the CBRC shall examine the business place, to which the business institution or branch institution of the foreign-invested bank plans to change. It shall issue the aforesaid business institution or branch institution a document of opinions on passing the check if the business place passes the check. It shall make an explanation if it cannot pass the check. The business institution of a foreign-invested bank may apply to the local institution dispatched by the CBRC for a recheck within 10 days after it receives a notice of failure to pass the check.
The local institution dispatched by the CBRC shall make a decision of approval or disapproval of the change of business place or office, and present a written notice to the applicant within 3 months after it receives a complete set of the application materials, and simultaneously a copy shall be sent to the CBRC level by level. It shall make an explanation if it makes a decision of disapproval.
Before a foreign-invested bank gets a business place or office modification approval from the local institution dispatched by the CBRC, it shall not move in a new business place or office.
Article 42 The articles of association shall be revised within 1 year after the said item is changed when any of the items as listed in the articles of association of a solely foreign-invested bank or Chinese-foreign equity joint bank is changed. The applicant shall submit the following application materials (in duplicate) to the local banking regulatory bureau in order to apply for revising the articles of association, and a copy shall be sent to the local institution dispatched by the CBRC simultaneously: (1) An application signed by the chairman of the board of directors or president (chief executive or general manager) of the applicant and addressed to the Chairman of the CBRC; (2) A resolution of the general meeting of shareholders or board of directors of the applicant; (3) The original articles of association and the draft of the new article of association of the applicant; (4) A table of comparison of the adjustment between the original articles of association and the draft of the new articles of association; (5) A legal advice issued by a law firm lawfully established within China about the draft of the new articles of association; and (6) Other materials as requested by the CBRC.
The local banking regulatory bureau shall, submit the application materials and the examination opinions to the CBRC within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the revising the articles of association and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 43 A business institution of a foreign bank shall file an application to the local institution dispatched by the CBRC, make an explanation and present an account of the arrangements during the period of temporary stop of business when it plans to temporarily stop its business for not less than 3 days but not more than 6 months.
The local institution dispatched by the CBRC shall make an approval or disapproval of the temporary stop of business within 10 days after it receives from the business institution of a foreign-invested bank an application for the temporary stop of business. It shall make an explanation if it makes a decision of disapproval.
Upon approval of temporary stop of business, a business institution of a foreign bank shall make an announcement outside its business place.
Article 44 The institution shall resume its business after the approved period of temporary stop of business expires, or after the reason for temporary stop of business disappears. The original applicant, within 5 days after it resumes its business, shall submit a report to the local institution dispatched by the CBRC. The applicant shall not resume its business until it has submitted to the local institution dispatched by the CBRC a copy of the letter of intent to rent or purchase the business place as well as the photocopies of the safety and fire prevention conformity certificates if its business place is rebuilt.
A new application shall be filed under Article 43 of the present Detailed Rules if it is necessary to extend the period of temporary stop of business.
Article 45 The modification shall be made in accordance with the provisions concerning the administration of financial permits when it is necessary to modify the financial permit of a business institution of a foreign-invested bank under any of the circumstances as mentioned in Article 27 of this Regulations.
The business institution of the foreign-invested bank shall submit to the local institution dispatched by the CBRC a capital verification certification issued by a qualified accounting firm lawfully established within China if capital verification is requested. If it is necessary to check, the institution dispatched by the CBRC to the place where the business institution of the foreign-invested bank is located shall do so.
Upon the strength of the approval document of the CBRC, the business institution of the foreign-invested bank shall go through the registration modification procedures in the administrative department for industry and commerce so as to fetch a new business license and hand back the former one.
A business institution of a foreign-invested bank shall make an announcement on a national newspaper as designated by the CBRC and on a local newspaper as designated by the local institution dispatched by the CBRC when it is under any of the circumstances as specified in Items (1) through (3) of Article 27 of the Regulations. The announcement shallㄛ,within 30 days, be completed after the business license becomes valid.
Article 46 Any representative office of a foreign bank shall make an announcement on a local newspaper as designated by the local institution dispatched by the CBRC after it has gone through the procedures for modifying the industrial and commercial registration when it changes its name, office or any other item. Chapter III Business Scope
Article 47 The phrase "purchasing/sell government bonds, financial bonds and other foreign currency negotiable securities other than stocks" as mentioned in Article 29 (4) and Article 31 (4) of the Regulations includes but is not limited to the following foreign exchange investment businesses, i.e. the Chinese and foreign government bonds, Chinese financial institution bonds and Chinese non-financial institution bonds which are issued outside the territory of China.
Article 48 The phrase "services of credit rating and consulting" as mentioned in Article 29 (12) and Article 31 (11) of the Regulations refers to the credit standing investigations and consultation services in relation to the banking businesses.
Article 49 Any branch of a foreign bank shall have the operating capital which is not less than 200 million Yuan or the equivalent value in a freely convertible currency when it plans to engage in the foreign exchange businesses as prescribed in Article 31 of the Regulations.
Article 50 Any branch of a foreign bank shall have an operating capital which is not less than 300 million Yuan or the equivalent value in a freely convertible currency, of which the Renminbi operating capital shall not be less than 100 million Yuan when it plans to engage in the foreign exchange businesses and Renminbi business.
Article 51 A solely foreign-invested bank, which is transformed from a branch of a foreign bank and which is solely invested by its headquarters, may inherit all businesses in which the original branch of the foreign bank is approved to engage.
Article 52 A solely foreign-invested bank or Chinese-foreign equity joint bank may authorize its branch institution(s) to implement businesses within its approved business scope.
Any branch of a foreign bank may authorize its inner-city sub-branches to implement businesses within the approved business scope.
Article 53 Article 34 of the Regulations prescribes the conditions which a business institution of a foreign-invested bank initially applies for engaging in Renminbi businesses shall satisfy, among which Items (1) and (2) mean that 3 years or more have lapsed since the operation start of the business institution of the foreign-invested bank and it has a favorable balance for 2 consecutive years before filing the application. The phrase "having practiced＃ for 3 years＃" refers to 3 full years from the day when an approval of operation start is obtained by the business institution of the foreign-invested bank to the date of application. The phrase "having made profits for 2 successive years before filing the application" refers to the fact that the audited financial statements of business institution of the foreign-invested bank of the previous before 2 fiscal years as at the date of application show favorable balances.
A business institution of a foreign-invested bank which has acquired an approval to engage in Renminbi business shall meet the prudent conditions as described by the CBRC when it applies for expanding its service scope of Renminbi business, and the examination and approval of the CBRC shall be subject to.
Article 54 A solely foreign-invested bank or Chinese-foreign equity joint bank may not only meet the prudent conditions as described by the CBRC in order to engage in Renminbi businesses aiming at citizens within China, but also have business networks which accord with its business features and development needs.
Article 55 It shall submit the following application materials (in duplicate) to the local banking regulatory bureau when any business institution of a foreign-invested bank applies for engaging in Renminbi businesses or expanding the scope of service objects of Renminbi businesses, and a copy shall be sent to the local institution dispatched by the CBRC simultaneously: (1) An application signed by the chairman of the board of directors or president (chief executive officer or general manager) of the applicant and addressed to the Chairman of the CBRC; (2) A feasibility study report; (3) The internal control system and operating procedures for the businesses to be engaged in; (4) The audited balance sheets and income statements of the previous 2 fiscal years as at the date of application; and (5) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials along with its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the applicant's engaging in Renminbi businesses or expanding the scope of service objects of Renminbi businesses within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.
Article 56 The business institution of the foreign-invested bank shall finish the preparatory tasks within 4 months after it obtains the CBRC's approval of its engaging in Renminbi businesses or expanding the scope of service objects of Renminbi businesses: (1) Hiring an appropriate number of business personnel that can satisfy the demands of its business development; (2) Printing the important business vouchers and documents for external use and to submit relevant specimens to the local institution dispatched by the CBRC; (3) To be equipped with safety protection facilities accredited by the relevant department and submit photocopies of the pertinent certifications to the local institution dispatched by the CBRC; (4) To establish a sound internal control system and operating procedures for Renminbi businesses and send them to the local institution dispatched by the CBRC; and (5) It shall hire an accounting firm lawfully established within China to verify its capital and submit the capital verification certification to the local institution dispatched by the CBRC if it needs to improve the registered capital or operating capital.
The original approval of the CBRC shall be invalidated automatically if the business institution of the foreign-invested bank cannot finish the preparatory tasks within 4 months.
Article 57 The business institution of a foreign-invested bank shall apply to the local institution dispatched by the CBRC for a check after it finishes the preparatory tasks, and the local institution dispatched by the CBRC shall do so within 10 days. The local institution dispatched by the CBRC shall issue to the applicant a document of opinions on passing the check if it passes the check. The applicant may apply to the local institution dispatched by the CBRC for a recheck within 10 days after it receives a notice that it cannot pass the check.
, The business institution of the foreign-invested bank shall fetch an approval from the CBRC upon the strength of the document of opinions on passing the check.
Article 58 Any branch of a solely foreign-invested bank or branch of a Chinese-foreign equity joint bank shall engage in Renminbi businesses within the scope of the business scope of and under the authorization of its headquarters. It shall, before carrying out such businesses, finish the preparatory tasks in accordance with Article 56 of the present Detailed Rules and submit the authorization of its headquarters to the local institution dispatched by the CBRC.
The branch of the solely foreign-invested bank or branch of the Chinese-foreign equity joint bank shall apply to the local institution dispatched by the CBRC for a check after it finishes the preparatory work. After it receive the check materials, the local institution dispatched by the CBRC shall do so within 10 days. The local institution dispatched by the CBRC shall issue to it a document of opinions on passing the check if the applicant passes the check. It may apply to the local institution dispatched by the CBRC for a recheck within 10 days after it receives a notice that it fails to pass the check.
Upon the strength of the document of opinions on passing the check, the branch of the solely foreign-invested bank or branch of the Chinese-foreign equity joint bank shall fetch from the CBRC a confirmation letter for engaging in Renminbi business and go through the procedures for modifying the business license in the administrative department for industry and commerce.
Article 59 Any business institution or branch institution of a foreign-invested bank shall make an announcement on a national newspaper as designated by the CBRC and on a local newspaper as designated by the local institution dispatched by the CBRC when it engages in Renminbi businesses or expands its scope of objects of Renminbi businesses.
Article 60 Any business institution of a foreign-invested bank shall submit the application materials (in duplicate) to the banking regulatory bureau of the place where the solely foreign-invested bank, headquarters of the Chinese-foreign equity joint bank, or the management bank of foreign bank is located when it plans to engage in the businesses as mentioned in Article 29 (13) or in Article 31 (12), and a copy shall be simultaneously sent to the institution dispatched by the CBRC to the place where the business institution of the foreign-invested bank is located: (1) An application signed by the person authorized by the applicant and addressed to the Chairman of the CBRC. (2) A detailed description of the businesses to be engaged in, the internal control system and the operating procedures; and (3) Other materials as requested by the CBRC.
The local banking regulatory bureau shall, submit to the CBRC the application materials along with its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall, make a decision of approval or disapproval and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 61 Any business institution or branch institution of a foreign-invested bank shall, when it operates any new product within its business scope, submit to the local institution dispatched by the CBRC a written report, which includes an introduction to the new product, features of risks, internal control system and operating procedures within 5 days after it starts such business operations.
Article 62 Any business institution of a foreign-invested bank may engage in the inter-bank Renminbi borrowing business under the relative provisions. Chapter IV Administration on Post-holding Qualifications
Article 63 The term "senior managerial personnel" as mentioned in the Regulations and in the present Detailed Rules refers to the managerial personnel of a foreign-invested bank who shall be subject to the post-holding qualification examination and approval by the CBRC or by the local banking regulatory bureau.
Article 64 Anyone, who assume the position of a director, senior manager or chief representative of a foreign-invested bank, shall be a natural person with complete civil capacity and shall satisfy the following basic conditions: (1) Being familiar with and complying with the Chinese laws, administrative regulations, and rules; (2) Having good professional ethics, moral integrity, behaviors and reputation, having good records of complying with the law and abiding by the regulation, and having no bad record; (3) Having a university educational background or higher, and having the professional knowledge, work experience and organization and management abilities which can satisfy the demands of the position; or if he fails to have a university educational background, 6 or more years of experience of financial work or related economic work experience (among which 4 or more years shall be financial work experience) shall be added accordingly; and (4) Having the independence which is essential to assume the relevant duties.
Article 65 Before the CBRC or the local banking regulatory bureau examines and approves his qualifications to assume the position, no director, senior manager or chief representative of any foreign-invested bank may fulfill his duties.
Article 66 Anyone, under any of the following circumstances, shall not assume the position of a director, senior manager or chief representative of a foreign-invested bank: (1) Having any criminal record of intentional or gravely wrongful act; (2) Assuming or having ever assumed the position of a director or senior manager of any institution which is taken over, revoked, merged, declared bankrupt, or of which the business license is withdrawn because of its illegal business operations, unless he can prove that he has no fault; (3) Instigating the institution, in which he takes up a position, to prevent or resist the supervision and inspection or investigation and punishment of a case implemented by the CBRC or its dispatched institution, or participating in doing so; (4) Causing any severe loss or bad results to the institution, in which he takes up a position, owing to violating the professional ethics or moral integrity, or towing to his serious negligence of duties; (5) Being unable to repay any relatively large sum of debt borrowed by himself or by his spouse; (6) Being forbidden by any law, administrative regulation or rule of any government department to assume the director, senior manager or chief representative of any financial institution; or (7) Any other circumstance as determined by the CBRC.
Article 67 The CBRC shall take charge of checking and approving the qualifications of a person to take up any of the following positions or disqualify a person from taking up any of the following positions in a foreign-invested bank: (1) The chairman of the board of directors, president (chief executive officer or general manager) of a solely foreign-invested bank or Chinese-foreign equity joint bank, or president of any branch of a solely foreign-invested bank or branch of a Chinese-foreign equity joint bank; (2) The president (general manager) of a branch of a foreign bank; and (3) The chief representative of a representative office of a foreign bank.
Article 68 The CBRC shall authorize the local banking regulatory bureau of the place where the foreign-invested bank is located to examine and approve the post-holding qualifications of the new candidate when the change of the president of a branch of a solely foreign-invested bank, president of a Chinese-foreign equity joint bank, president (general manager) of a branch of a foreign bank, or chief representative of a foreign bank happens.
Article 69 A local banking regulatory bureau shall take charge of examining and approving the qualifications of a person to assume any of the following positions, or disqualifying a person from assuming any of the following positions: (1) The directors, deputy chairman of the board of directors, secretary of the board of directors, deputy president (deputy general manager), assistant to the president, chief operating officer, chief risk controlling officer, chief finance officer (chief financial officer or financial person-in-charge), chief technical officer, person-in-charge of internal audit and person-in-charge of regulation compliance; (2) The deputy president and regulation-compliance person-in-charge of any branch of a solely foreign-invested bank, the deputy president (deputy general manager) and person-in-charge of regulation compliance of any branch of a foreign bank; (3) The president of a branch; and (4) Other positions having the business management decision-making power or playing an important part in the control of risks.
Article 70 A person who plans to assume the position of a director, senior manager or chief representative of a foreign-invested bank shall meet the following conditions: (1) He shall have 8 or more years of financial work experience or 12 or more years of relevant economic work experience (among which 5 or more years shall be financial work experience), if he plans to assume the position of the chairman of a solely foreign-invested bank or of a Chinese-foreign equity joint bank; (2) , He shall have 5 or more years of financial work experience or 10 years of relevant economic work experience (among which 3 or more years shall be financial work experience), if he plans to assume the position of the deputy chairman of the board of directors of a solely foreign-invested bank or Chinese-foreign equity joint bank; (3) He shall have 8 or more years of financial work experience or 12 years of relevant economic work experience (among which 4 or more years shall be financial work experience), if he plans to assume the position of the president (chief executive officer or general manager) of a solely foreign-invested bank or of a Chinese-foreign equity joint bank; (4) He shall have five or more years of financial work experience or 10 or more years of relevant economic work experience (among which 3 or more years shall be financial work experience), if he plans to assume the position of the secretary of the board of directors, deputy president (deputy general manager), assistant of the president, chief operating officer, chief risk controlling officer, chief finance officer (chief financial officer or financial person-in-charge), chief technical officer, or president (general manager) of any branch of a solely foreign-invested bank or branch of a Chinese-foreign equity joint bank or branch of a foreign bank; (5) He shall have 5 or more years of economic, financial, law or accounting work experience, shall be able to judge the business operation, management and risk status, and can understand the corporate governance structure of the bank, articles of association, duties of the board of directors as well as the rights and obligations of the directors with the help of financial statements and statistical statements, if he plans to assume the position of a director of a solely foreign-invested bank or of a Chinese-foreign equity joint bank; (6) He shall have 4 or more years of financial work experience or 6 or more years of relevant economic work experience (among which 2 or more years shall be financial work experience), if he plans to assume the position of a deputy president (deputy general manager) of any branch of a solely foreign-invested bank, branch of a Chinese-foreign equity joint bank or branch of a foreign bank; (7) He shall have 4 or more years of financial work experience if he plans to assume the person-in-charge of internal audit or person-in-charge of regulation compliance of a solely foreign-invested bank or Chinese-foreign equity joint bank; (8) He shall have 3 or more years of financial work experience if he plans to assume the person-in-charge of regulation compliance of any branch of a solely foreign-invested bank, branch of Chinese-foreign equity joint bank or branch of a foreign bank; or (9) He shall have 3 or more years of financial work experience or 6 or more years of relevant economic work experience (among which 1 or more years shall be financial work experience), if he plans to assume the position of the chief representative of any representative office of a foreign bank.
Article 71 A foreign-invested bank shall submit the following application materials (in duplicate) to the local banking regulatory bureau of the place where the institution, in which the candidate is to take up the said position, is located, when it applies for examining and approving the qualifications of a candidate director, senior manager or chief representative, and a copy shall be simultaneously sent to the institution dispatched by the CBRC to the place where the institution, in which the candidate is to take up the said position, is located: (1) An application signed by the person authorized by the applicant; it shall be addressed to the Chairman of the CBRC if it is subject to the examination and approval of the CBRC; it shall be addressed to the director of said banking regulatory bureau if it is subject to a banking regulatory bureau; the application shall include the title, duties, powers, position of this title in the organizational structure of this institution; (2) An authorization to the candidate signed by the person authorized by the applicant, and an authorization to the person who signs the first-mentioned authorization; (3) copies of the identity card and the academic credentials of the candidate; (4) The resume and a detailed description of his plan on fulfilling the duties in the future; (5) A formal announcement of having no bad record and a letter of commitment to comply with the law or fulfill his duties after he assumes the position, which are signed by the candidate; (6) The applicant shall submit the resolution of the corresponding meeting if the articles of association of the solely foreign-invested bank or Chinese-foreign equity joint bank requests a general meeting of shareholders or meeting of the board of directors; and (7) Other materials as requested by the CBRC.
Article 72 The resumes, and copies of the identity card and the academic credentials of the candidates as mentioned in the Regulations and in the present Detailed Rules shall be signed by the authorized person.
Article 73 Before it examines and approves its qualifications the CBRC or the local banking regulatory bureau may, where a candidate is a former director, senior manager or chief representative of a banking financial institution within China, consult the opinions of the banking regulatory bureau of the place where the institution in which the candidate took up a position is located.
The institution in which the candidate assumes a position shall offer feedback opinions in a timely manner.
Article 74 The CBRC and the local banking regulatory bureau may have an interview with the candidate prior to the appointment after a foreign-invested bank submits the post-holding qualification application materials.
Article 75 The president (chief executive officer or general manager) of any business institution of a foreign-invested bank, chief executive of any representative office of a foreign bank shall submit a written report to the local institution dispatched by the CBRC and designate a special person to fulfill his duties if he needs to continuously leave his office for 1 month or longer He shall be replaced if he leaves his post for consecutively 3 months or longer without any special reason.
Article 76 If a director, senior manager or chief representative is under any of the following circumstances, the CBRC and its dispatched institution may, in view of the seriousness of the case, disqualify him from taking up such a position for a certain time period or for life; (1) Being investigated for criminal liabilities under the law; (2) Rejecting, disturbing, frustrating or seriously impairing the supervision and inspection carried out by the CBRC and its dispatched institution under the law; (3) The imperfect internal management and control system or weak supervision results in serious property losses to the institution in which he assumes a position or causes any severe financial criminal case; (4) The institution, in which he assumes a position, is taken over, merged or declared bankrupt due to business operations in serious violation of any law or regulation, imperfect internal system or long-term poor management of business operations; (5) Serious losses to the institution, in which he takes up a position, wing to long-term poor management of business operations; (6) As regards a person who has been appointed to a senior managerial post of a foreign-invested financial institution, if the CBRC finds that he has ever breached any law or regulation before taking up the position, or finds any other circumstance that it is unsuitable for him to take the post; and (7) Any other circumstance as determined by the CBRC.
Article 77 The local banking regulatory bureau shall submit to the CBRC the application materials and the examination opinions within 20 days after it receives a complete set of application materials, if the qualifications of a candidate shall be subject to the examination and approval of the CBRC. The CBRC shall make a decision of approval or disapproval and present a written notice to the applicant within 30 days after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
The local banking regulatory bureau shall make a decision of approval or disapproval and present a written notice to the applicant within 30 days after it receives a complete set of the application materials, if the qualifications of a candidate shall be subject to the examination and approval of the local banking regulatory bureau. It shall make an explanation if it makes a decision of disapproval. Chapter V Supervision and Administration
Article 78 A business institution of a foreign-invested bank shall establish an internal control system and business operating procedures which satisfy the demands of the development of its Chinese businesses and shall, report to the local institution dispatched by the CBRC the revisions to its internal control system and business operating procedures before the end of March every year.
Article 79 An independent risk management department, a regulation-compliance management department and an internal audit department shall be established by a solely foreign-invested bank, Chinese-foreign equity joint bank.
A branch of a foreign bank shall appoint a special department or employee to be responsible for the regulation-compliance work.
Article 80 After the end of an internal audit, a business institution of a foreign-invested bank shall timely submit an internal audit report to the local institution dispatched by the CBRC, which may communicate with the internal auditors of the business institution of the foreign-invested bank in a proper way.
Article 81 A loan risk classification system shall be established by a business institution of a foreign-invested bank and reported to the local institution dispatched by the CBRC the corresponding relationship between its loan risk classification criterions and the classification criterions as provided for by the CBRC.
Article 82 The phrase "provisions on the administration of the ratio of liabilities to assets" as mentioned in Article 40 of the Regulations refers to the provisions of Article 39 of the Law of the People's Republic of China on Commercial Banks governing the ratio of liabilities to assets.
The ratio of liabilities to assets of a solely foreign-invested bank or Chinese-foreign equity joint bank shall, according to the provisions of the banking regulatory statement indicator system, be calculated and shall be evaluated in accordance with the criterions on consolidated statements for both home and foreign currencies.
Article 83 An affiliated transaction management system shall be established by a solely foreign-invested bank or Chinese-foreign equity joint bank. The commercial principles shall be abided by in affiliated transactions, of which the transaction conditions shall not be more favorable than those of any transaction between non-affiliated parties.
The CBRC and its dispatched institution shall determine the affiliated transactions and non-affiliated transactions in accordance with the administrative measures for the affiliated transactions of commercial banks.
Article 84 A business institution of a foreign-invested bank shall make policies and management rules on business outsourcing, inclusive of decision-making procedures for business outsourcing, evaluation and management of contractors, measures for the control of confidentiality and safety of bank information, and the emergency plan.
A business institution of a foreign-invested bank shall report to the local institution dispatched by the CBRC the main risks of the business outsourcing agreement and the corresponding risk prevention measures before it signs a business outsourcing agreement.
Article 85 The term "interest-earning assets" as mentioned in Article 44 of the Regulations covers the foreign exchange interest-earning assets and Renminbi interest-earning assets.
30% of the foreign exchange operating capital of a branch of a foreign bank shall be foreign exchange fixed deposits of 6 months or longer as foreign exchange interest-generating assets. 30% of the Renminbi operating capital of the said branch shall be Renminbi fixed deposits of 6 months or longer as Renminbi interest-generating assets.
The interest-earning assets of a branch of a foreign bank, which exist in the form of fixed deposits, shall be deposited in 3 or less Chinese-invested commercial banks within the territory of China that have steady business operations and considerable strength. It shall not repurchase the interest-earning assets in the form of government debts in Renminbi by way of pledge or other methods that may have a bearing on the right to dispose of them.
By the end of June and December every year, the branch of the foreign bank shall report to the local institution dispatched by the CBRC the information about interest-earning assets, covering the banks where the interest-earning assets are deposited, amounts, interest rates, terms and interest rates of the interest-earning assets, as well as the amounts, forms and maturity dates of the government debts in Renminbi that it holds.
The branch of the foreign bank shall be subject to the approval of the local institution dispatched by the CBRC if it plans to change the form of any interest-earning assets or change the depositing bank of any fixed deposit. The branch of foreign bank shall not use such interest-earning assets without approval of the institution dispatched by the CBRC.
Article 86 The term "the totality of operating capital and reserve" as mentioned in Article 45 of the Regulations refers to the total amount of the operating capital, undistributed profits and general loan loss reserves. The term "risk assets" refers to the in-statement and off-statement weighted risk assets which are calculated in accordance with the provisions on weighted risk assets.
The ratio as mentioned in Article 45 of the Regulations shall be calculated according to each China-based branch of the foreign bank and shall be evaluated on the basis of the balance by the end of every quarter.
Article 87 The liquid assets of a branch of a foreign bank include the cash, gold, deposits in the People's Bank of China, inter-bank deposits, inter-bank loans to be due in one month, inter-bank lending to be due in one month, net amount of the corresponding assets with overseas associated banks and their affiliated institutions, interests receivable and other receivables within 1 month, loans to be due in 1 month, bond investments to be due in 1 month, other bond investments that may be realized in 1 month at the secondary markets home and abroad, and other assets that may be realized in 1 month. Those among the aforesaid assets, which may not be drawn back as estimated shall be deducted. The interest-earning assets shall not be included into the liquid assets.
The "liquid debts" of a branch of a foreign bank include current deposits, fixed deposits to be due in 1 month, inter-bank deposits, inter-bank borrowings to be due in 1 month, payables to be due in 1 month, net amount of correspondent liabilities with the foreign associated banks and their affiliated institutions, and other debts to be due in 1 month. Frozen deposits shall not be included into the present liabilities.
A branch of a foreign bank shall calculate its liquidity ratio on the basis of Renminbi and foreign currencies every day, respectively, and maintain the liquidity ratio as provided for in Article 46 of the Regulations. It shall be separately estimated as a China-based branch of a foreign bank.
Article 88 The balance of domestic and foreign currencies assets within territory of China and the balance of domestic and foreign currencies liabilities within territory of China as mentioned in Article 47 of the Regulations shall be calculated as follows:
The balance of domestic and foreign currencies assets within territory of China = total assets in home and foreign currencies 每 the (assets) to and from overseas associated banks 每 the (assets) to and from overseas affiliated institutions 每 the overseas loans 每 the overseas inter-bank deposits 每 the overseas inter-bank lending 每 the purchase of overseas reverse-sale assets 每 the overseas investments and other overseas assets
The following investments may not be included into the overseas investments: the purchase of Chinese government bonds issued outside the territory of China, bonds of Chinese financial institutions and bonds of Chinese non-financial institutions.
The balance of domestic and foreign currencies liabilities within territory of China ˊ total liabilities in home and foreign currencies 每 the (liabilities) to and from overseas affiliated institutions 每 the overseas deposits 每 the overseas inter-bank deposits 每 the overseas inter-bank borrowings 每 the sales amount of overseas reverse-purchase items 每 other overseas liabilities
The provisions of Article 47 of the Regulations shall be implemented according to the China-based branches of a foreign bank on a consolidated basis.
Article 89 No business institution of any foreign-invested bank may falsely state, overstate or understate its assets, liabilities and the owner' s equities.
Article 90 The headquarters or the authorized regional headquarters of the foreign bank shall appoint one of these branches as the managing bank to manage the businesses within China as a whole and to submit the unified financial information and comprehensive information of all branches within China when a foreign bank has established 2 or more branches within China.
A foreign bank or its authorized regional headquarters shall appoint the managing president to manage the businesses within China and appoint a person-in-charge of regulation compliance to be responsible for regulation compliance of the businesses within China.
Article 91 By the end of each quarter, a business institution of a foreign-invested bank shall submit to the local institution dispatched by the CBRC the information about the transnational flow of large-sum money and about the transnational transfer of assets in accordance with the provisions of the CBRC.
Article 92 A business institution of a foreign-invested bank plans to transfer in any credit asset from its headquarters or from any associated bank, it shall be subject to the approval of the local institution dispatched by the CBRC.
Article 93 The branch of a foreign bank shall submit a report to the institution dispatched by the CBRC to the place where this branch or managing bank is located if it is under any of the following circumstances: (1) If the aggregate of undistributed profit of a branch of a foreign bank and the net income or loss of the current year is negative, and if the aggregate of the absolute negative amount and the insufficient part of loan-loss reserve is over 30% of the operating capital, a report shall be submitted by the end of each quarter; (2) A report shall be submitted by the end of each quarter, if the balance of credits which the branch of the foreign bank grants to all its big clients exceeds 8 times its operating capital. The term "big client" concerns the clients to whom the balance of credits is over 10% of operating capital of the branch of the foreign bank. Such indicator shall be calculated by consolidating the quarter-end balances of the branches of the China-based branches of the foreign bank; (3) A report shall be submitted by the end of each quarter, if the balance of the assets to and from the overseas associated banks and affiliated institutions of the branch of the foreign bank exceeds the aggregate of the balance of liabilities to and from the overseas associated banks and affiliated institutions. This indicator shall be accounted by consolidating the China-based branches of the foreign bank; or (4) Any other circumstances as determined by the CBRC.
Article 94 The special regulatory measures as taken by the CBRC and its dispatched institution against a business institution of a foreign-invested bank cover: (1) Having an interview with the relevant persons-in-charge so as to give them a warning; (2) Ordering the business institution to regularly submit written reports about pertinent issues; (3) Taking measures to restrict the outbound flow of funds; (4) Ordering the business institution to suspend part of its businesses, or to suspend the acceptance of the application of this business institution for engaging in any new business; (5) Ordering the business institution to issue a guarantee; (6) Putting forward special requirements for the relevant risk control indicators; (7) Ordering the business institution to keep a certain rate of assets as accepted by the CBRC; (8) Requested the business institution to supplement capital or operating capital within a time limit; (9) Ordering the business institution to change its director or senior manager within a time limit; (10) Suspending the acceptance of the application of the business institution for establishing any new institution; (11) Taking restrictive measures for the profit distribution and the outbound remittance of profit; (12) Assigning special supervisors to this business institution so as to supervise and direct its routine management of business operations; (13) Increasing the frequency of submission of the relevant supervisory statements; and (14) Other special supervisory measures as taken by the CBRC.
Article 95 The following important matters shall be timely reported to the local institution dispatched by the CBRC by a business institution of a foreign-invested bank: (1) The serious problems which occur in the financial status and business operations of this business institution; (2) The important changes in the operating strategies of this business institution; (3) If the business institution suspends business on a day that is not a legal holiday, it shall, except for any case of force majeure, submit a written report to the local institution dispatched by the CBRC not later than 7 days before it does so; (4) The important resolutions of the board of directors of the solely foreign-invested bank or Chinese-foreign equity joint bank; (5) The modification made to the articles of association, registered capital or registered address of the headquarters of the branch of the foreign bank, of the solely foreign-invested bank, or of the shareholders of the Sino-foreign equity joint equity bank; (6) The merger, split-up and other restructuring matters of the headquarters of the branch of the foreign bank, of the solely foreign-invested bank, or of the shareholders of the Chinese-foreign equity joint bank, and changes of the chairman of the board of directors or president (chief executive officer, general manager); (7) The serious problems which occur in the financial status and business operations of the headquarters of the branch of foreign bank, of the solely foreign-invested bank, of the shareholders of the Chinese-foreign equity joint bank; (8) The serious cases which occur in the headquarters of the branch of the foreign bank, in the solely foreign-invested bank, or in the shareholders of the Chinese-foreign equity joint bank; (9) The important supervisory measures taken against the headquarters of the branch of the foreign bank, solely foreign-invested bank or the foreign shareholder of the Chinese-foreign equity joint bank by the financial regulatory authority of the country or region where it is located; (10) The important changes of the financial regulations and of financial regulatory system of the country or region where the headquarters of the branch of the foreign bank, solely foreign-invested bank, or foreign shareholder of the Chinese-foreign equity joint bank; and (11) Other matters as requested by the CBRC.
Article 96 If any of the following important matters occurs in the foreign bank a representative office represents, the said representative office shall timely report it to the local institution dispatched by the CBRC: (1) The modification of the articles of association, registered capital or registered address; (2) The merger, split-up and other restructuring matters as well as the change of the chairman of the board of directors or president (chief executive or general manager) of the foreign bank; (3) The serious problems which occur in the financial status or business operations of the foreign bank; (4) The serious cases which occur in the foreign bank; (5) The important supervisory measures taken against the foreign bank by the financial regulatory commission of the country or region where it is located; and (6) Other matters which have an important influence on the business operations of the foreign bank.
Article 97 If a non-formal employee of a China-based institution of a foreign-invested bank works in this institution for more than 20 consecutive days, or for more than 30 days in accumulation within 90 days, the foreign-invested bank shall report to the local institution dispatched by the CBRC.
Article 98 By the end of each fiscal year, a solely foreign-invested bank, Chinese-foreign equity joint bank, or a foreign bank which has established 2 or more branches within the territory of China shall hire a qualified accounting firm lawfully established within the territory of China to audit all its business institutions within the territory of China on a consolidated basis and shall submit an audit report and an management proposal to the banking regulatory institution where the solely foreign-invested bank, Chinese-foreign equity joint bank or managing bank is located within 4 months after the end of each fiscal year.
By the end of each fiscal year, a branch of a foreign bank shall hire a qualified accounting firm lawfully established within the territory of China to audit it and shall submit an audit report and an management proposal to the local banking regulatory institution within 4 months after the end of each fiscal year.
Article 99 One month before a business institution of a foreign-invested bank hires a qualified accounting firm lawfully established within the territory of China to conduct an annual audit or an audit of other items, it shall submit to the local institution dispatched by the CBRC the basic materials of the accounting firm as well as of the certified public accountants who participate in the audit.
Article 100 The information about the capital adequacy, asset quality, corporate governance, internal control, profit, liquidity, market risk management, etc. shall be included in the annual audit of a solely foreign-invested bank or Chinese-foreign equity joint bank.
The financial report, risk management, operating control, regulation-compliance information, asset quality, etc. shall be covered by the annual audit of a branch of a foreign bank.
Article 101 The CBRC and its dispatched institution may, where necessary, appoint an accounting firm to audit the operating status, financial status, risk status and internal control system of a business institution of a foreign-invested bank, and the business institution's carrying out the internal control system.
Article 102 The CBRC and its dispatched institution may request a business institution of a foreign-invested bank to replace an accounting firm whose professional skill and independence do not satisfy the supervisory requirements with a new one.
Article 103 A solely foreign-invested bank or Chinese-foreign equity joint bank shall submit to the local institution dispatched by the CBRC annual statements of the solely foreign-invested bank and of its shareholder(s), or annual statements of the Chinese-foreign equity joint bank and of its shareholders within 6 months after the end of a fiscal year.
A branch or a representative office of a foreign bank shall submit an annual statement of its headquarters to the local institution dispatched by the CBRC within 6 months after the end of the fiscal year of its headquarters.
Article 104 Before the end of February every year, a representative office of a foreign bank shall submit to the local institution dispatched by the CBRC a work report of the previous year and a work plan for the present year in accordance with the formats as requested by the CBRC.
Article 105 A representative office of a foreign bank shall have a separate office, office facilities and full-time personnel.
Article 106 A proper number of personnel shall be necessary for a representative office. The duties of the personnel shall conform to the functions of the representative office.
Article 107 A representative office of a foreign bank shall establish account books to reflect the actual information about its incomes and disbursements. Its costs and expenses shall accord with its functions.
No representative office of a foreign bank may utilize the account of any other enterprise, organization or individual.
Article 108 No representative office of a foreign bank may utilize any business processing system which does not accord with its functions through its computer system.
Article 109 As regards the materials which the present Detailed Rules require submission, those written in a foreign language shall be accompanied by a Chinese translation except for the annual statements. A Chinese translation shall be attached to the internal control system, business operating procedures, and specimens of business vouchers of a business institution of a foreign-invested bank. As regards the relevant documents of other business archives and management archives, they shall be accompanied by a Chinese translation, if the supervisory personnel deem it necessary. The CBRC and its dispatched institution may require that the relevant Chinese translation be notarized by an institution accredited by the country or region where the headquarters of the branch of the foreign bank under any special circumstance, or the foreign shareholder of the solely foreign-invested bank or the foreign shareholder of the Chinese-foreign equity joint bank is located, and be certified by the Chinese embassy or consulate in this country or region. Chapter VI Termination and Liquidation
Article 110 The phrase "terminate＃ by itself" as mentioned in Article 58 of the Regulations refers to: (1) The business term as provided for in the articles of association of the solely foreign-invested bank or of the Chinese-foreign equity joint bank expires, or any other dissolution cause as described in the articles of association occurs; (2) The general meeting of shareholders or the board of directors of a solely foreign-invested bank or Chinese-foreign equity joint bank makes a resolution of dissolution; (3) It is necessary for the solely foreign-invested bank or Chinese-foreign equity joint bank to dissolve wing to merger or split-up; or (4) The foreign bank, solely foreign-invested bank or Chinese-foreign equity joint bank closes up any branch within the territory of China.
Article 111 A solely foreign-invested bank or Chinese-foreign equity joint bank shall submit the following application materials (in duplicate) to the local banking regulatory bureau when a solely foreign-invested bank or Chinese-foreign equity joint bank applies for dissolution on its own initiative, and a copy shall be sent to the local institution dispatched by the CBRC simultaneously: (1) An application signed by the chairman of the board of directors (chief executive officer or general manager) and addressed to the Chairman of the CBRC; (2) A resolution of the general meeting of shareholders or of the board of directors; (3) A letter of confirmation of the agreement of this institution's dissolution on its own initiative, which is signed by the chairman of the board of directors or president (chief executive officer or general manager) of each shareholder; and (4) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application opinions along with its examination opinions within 20 days after it receives a complete set of application materials.
The CBRC shall make a decision of approval or disapproval of the dissolution and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.
Article 112 A foreign bank, solely foreign-invested bank or Chinese-foreign equity joint bank shall submit the following application materials (in duplicate) to the local banking bureau when it applies for closing up any branch within the territory of China, and a copy shall be simultaneously sent to the banking regulatory bureau of the place where the solely foreign-invested bank or Chinese-foreign equity joint bank is located and to the institution dispatched by the CBRC to the place where branch is located: (1) An application signed by the chairman of the board of directors (chief executive officer or general manager) and addressed to the Chairman of the CBRC; (2) A resolution made by the general meeting of shareholders or of the board of directors of the solely foreign-invested bank or Chinese-foreign equity joint bank; (3) The opinions of the financial regulatory authority of the country or region where the foreign bank is located about its application; and (4) Other materials as requested by the CBRC.
The banking regulatory bureau of the place where the branch is located shall, submit to the CBRC the application opinions along with its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the dissolution within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.
Article 113 From the day when the CBRC's decision to approve a solely foreign-invested bank or Chinese-foreign equity joint bank to dissolve on its initiative or approves a foreign bank, solely foreign-invested bank or Chinese-foreign equity joint bank to close down its branch within the territory of China, becomes effective, the institution approved to dissolve on its initiative or to close down shall stop its business operations at the same time, shall hand back its financial business permit, and form a liquidation group within 15 days.
Article 114 The president (general manger), chief accountant, a Chinese certified public account, and other persons designated by the CBRC shall be include in the members of the liquidation group The representative and chairman of the board of directors of each shareholder shall be included in the liquidation group of a solely foreign-invested bank or Chinese-foreign equity joint bank. The members of the liquidation group shall be subject to the consent of the institution dispatched by the CBRC.
Article 115 The liquidation group shall present a written notice to the administrative department for industry and commerce, tax organ, labor and social security department, and other relevant departments.
Article 116 Other liquidation affairs in relation to a solely foreign-invested bank or Chinese-foreign equity joint bank to dissolve on its own initiative, or in respect of a solely foreign-invested bank or Chinese-foreign equity joint bank or foreign bank to close down its branch within the territory of China shall be dealt with in accordance with the relevant provisions of the Company Law of the People's Republic of China.
Article 117 The institution dispatched by the CBRC to the place where the business institution of a foreign-invested bank or its branch is dissolved or closed down shall be responsible for supervising the dissolution and liquidation courses and report the important matters and the liquidation result to the CBRC level by level.
Article 118 The liquidation group shall, hire a qualified accounting firm lawfully established within the territory of China, conduct an audit within 30 days from the date of formation, and shall submit an audit report to the local institution dispatched by the CBRC within 60 days from the day when it hires the said accounting firm.
Article 119 The foreign exchange examination and approval items involved during the process of dissolution or closedown shall be subject to the approval of the State Administration of Foreign Exchange and its branch.
Article 120 The liquidation group shall, in the course of settling debts, give priority to the payment of the principal and interests of personal savings after it has paid off the liquidation fees, wages and labor insurance premiums owed to the employees.
Article 121 The liquidation group shall, not later than the tenth date of each month, submit a report on the settlement of debts, disposal of assets, repayment of loans, cancellation of credit accounts to the local institution dispatched by the CBRC etc.
Article 122 The liquidation group shall submit the following application materials to the local institution dispatched by the CBRC for examination and approval when it applies for drawing the interest-earning assets after the institution liquidated has settled all the debts: (1) An application bearing the signature of the head of the liquidation group; (2) A liquidation report; and (3) Other materials as requested by the CBRC.
Article 123 The liquidation group shall make a liquidation report after the liquidation is completed. It shall submit the report to the local institution dispatched by the CBRC for confirmation and to the administrative department for industry and commercial so as to apply for deregistration of industry and commerce, and shall make an announcement on a national newspaper designated by the CBRC and on a local newspaper designated by the local institution dispatched by the CBRC. A report shall be submitted to the local institution dispatched by the CBRC in written form about the contents of the announcement by the liquidation group
Article 124 After the liquidation, the accounting archives and business materials shall be dealt with in accordance with the relevant provisions.
Article 125 Within 2 years after the end of the liquidation of a branch of a foreign bank, neither the CBRC nor its dispatched institution may accept any application of this foreign bank for the establishing a business institution in the same city within the territory of China.
Article 126 If a foreign bank applies for closing down any branch within the territory of China and applies for establishing a representative office in the same city, it shall submit the following application materials (in duplicate) to the local banking regulatory bureau and a copy shall be simultaneously sent to the institution dispatched by the CBRC: (1) An application signed by the chairman of the board of directors or president (chief executive officer or general manager) and addressed to the Chairman of the CBRC; (2) An authorization to the candidate chief representative, which is signed by the person authorized by the foreign bank; (3) A resume of the candidate chief representative; (4) Copies of the identity card and the academic credentials of the candidate chief representative; (5) A formal announcement of having no bad record, which is signed by the candidate chief representative; and (6) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials and its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall determine whether to approve the closedown of the branch and the establishment of a representative office in the same city within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.
Article 127 Where a solely foreign-funded bank or Chinese-foreign equity joint bank is under such circumstances as running its business illegally and managing its business operations poorly so that it poses a serious threat to the order of the financial market or to the interests of the general public if it is not revoked, the CBRC shall revoke it under the Regulations on Closure of Financial Institutions.
To order the closedown of any branch of a foreign bank, the CBRC shall abide by the relevant provisions of the Company Law of the People's Republic of China.
Article 128 Where a solely foreign-invested bank or Chinese-foreign equity joint bank is liquidated due to dissolution, it shall immediately apply to the people's court for bankruptcy upon approval of the CBRC if the liquidation group finds that the properties of the solely foreign-invested bank or of the Chinese-foreign equity joint bank are not enough to pay off the debts after it clears up the properties and works out an asset-liability statement and a checklist of properties. The liquidation group shall hand over the liquidation affairs to the people's court after the solely foreign-invested bank or Chinese-foreign equity joint bank is ruled by the people's court to be insolvent.
Article 129 It shall submit the following application materials (in duplicate) to the local banking regulatory bureau when any business institution of a foreign-invested bank applies for resuming business in accordance with Article 59 of the Regulations, and a copy shall be sent to the local institution dispatched by the CBRC simultaneously: (1) An application signed by the chairman of the board of directors or president (chief executive officer, general manager) of the applicant and addressed to the Chairman of the CBRC; (2) The resolution of the board of directors of the solely foreign-invested bank or of the Chinese-foreign equity joint bank; and (3) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials and its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of resuming business within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.
Article 130 If a foreign bank changes any branch within the territory of China into a solely foreign-funded bank solely invested by its headquarters, the original branch of the foreign bank shall hand back the financial business permit after the said solely foreign-invested bank starts business and go through the deregistration procedures in the administrative organ for industry and commerce in accordance with the law.
Article 131 A foreign bank shall, after it applies for closing down its representative office within the territory of China, submit the following applications materials (in duplicate) to the local banking regulatory bureau and a copy shall be sent to the local institution dispatched by the CBRC simultaneously: (1) An application signed by the chairman of the board of directors or president (chief executive officer or general manager) of the foreign bank and addressed to the Chairman of the CBRC; and (2) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials and its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the closedown within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. If it makes a decision of disapproval, it shall make an explanation.
Article 132 A representative office closed down upon approval shall make an announcement on a national newspaper designated by the CBRC and on a local newspaper designated by the local institution dispatched by the CBRC within 15 days after it goes through the deregistration procedures, and shall report the contents of the announcement to local institution dispatched by the CBRC. Chapter VII Supplementary Provisions
Article 133 In case any foreign-funded bank violates the present Detailed Rules, it shall be punished by the CBRC under the Regulations and other relevant provisions.
Article 134 The present Detailed Rules shall enter into force as of December 11, 2006. As from the date of implementation of the present Detailed Rules, the Detailed Rules for the Implementation of the Regulations of the People's Republic of China on the Administration of Foreign-funded Financial Institutions promulgated by the CBRC on July 26, 2004 shall be abolished simultaneously.
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