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20040901 The People's Bank of China Order of the People's Bank Of China No.1 Detailed Rules for the Implementation of the Regulations of the People's Republic of China on the Administration of Foreign-funded Financial Institutions, which have been formulated by the People's Bank of China in accordance with 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-funded Financial Institutions and other relative laws and regulations of finance, were promulgated hereby and shall enter into force as of February 1, 2002. President of the People's Bank Of China Dai Xianglong January 25, 2002 Detailed Rules for the Implementation of the Regulations of the People's Republic of China on the Administration of Foreign-funded Financial Institutions Chapter I General Rules
Article 1 These Rules have been formulated in accordance with 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-funded Financial Institutions (hereinafter referred to as the Regulations).
Article 2 The "foreign investment" as used in item 1) and item 4) of Article 2 of the Regulations shall refer to the investment paid at the registration bodies outside the territory of the People's Republic of China. The "foreign banks" as used in item 2) shall refer to the banks that are registered outside the territory of the People's Republic of China and that are approved or accredited by the financial authorities of the places where they are located. The "foreign financial institutions" as used in item 3) and item 5) shall refer to the financial institutions that are registered outside the territory of the People's Republic of China and that are approved or accredited by the financial authorities of the places where they are located.
Article 3 The "foreign-funded institutions with legal person status" as used in these Rules shall refer to the solely foreign-funded banks, joint venture banks, solely foreign-funded financial companies and joint venture financial companies.
Chapter II Establishment and Registration
Article 4 As to a solely foreign-funded bank established in accordance with Article 6 of the Regulations, its only shareholder or the holding shareholder must be a commercial bank. As to a solely foreign-funded financial company established in accordance with Article 6 of the Regulations, its only shareholder or the holding shareholder must be a commercial bank or a financial company. The rate of capital sufficiency of the commercial bank as referred to in this article shall not be lower than 8%. Item 2) and item 3) of Article 6 of the Regulations shall be applicable to the only shareholder or the holding shareholder.
Article 5 As to a joint venture bank established in accordance with Article 8 of the Regulations, the only shareholder or the holding shareholder of the foreign party must be a commercial bank. As to a joint venture financial company established in accordance with Article 8 of the Regulations, the only shareholder or the holding shareholder of the foreign party must be a commercial bank or a financial company. The rate of capital sufficiency of the commercial bank as referred to in this article shall not be lower than 8%. Item 2) and item 3) of Article 6 of the Regulations shall be applicable to the only shareholder or the holding shareholder of the foreign party.
Article 6 The "applicant" or the "representative office in China of the foreign party" as used in Article 6 , Article 7 and Article 8 of the Regulations shall refer to the representative office established with the approval of and controlled by the People's Bank of China; the "end of the year before the application is filed" shall refer to the end of the fiscal year up to the date of application.
Article 7 The "prudent conditions" as used in the Regulations and these Rules shall include the following conditions at least: 1) having rational system of legal person administration; 2) having moderate system of risk management; 3) having sound and complete system of internal control; 4) having effective system of information management; 5) the applicant running well and having no record of major violations of laws and rules; 6) having effective measures against money laundering.
Article 8 The "report on feasibility study" as used in Article 9 , Article 10 , Article 11 of the Regulations and Article 16 of these Rules shall at least include: the basic information of the applicant, the analysis of the market prospect of the institution to be established, the business development planning of the institution to be established, the framework of organization and management of the institution to be established, and the debt scale and profit forecast in the three years after the start of business of the institution to be established, etc.
Article 9 The "business license (copy)" as used in the Regulations and these Rules shall refer to the copy of the business license or other document of approval for financial business operation. The "business license (copy)", "letter of authorization", "liability guarantee of the head office of a foreign bank for the tax and debt of its branch bank in China", etc. as used in the Regulations and these Rules shall be notarized by the agencies accredited by the country or region where the foreign financial institution is located and be authenticated by the embassy and consulate of the People's Republic of China in that country. But the business license (copy) issued by the department of industry and commerce administration of China shall be the exception.
Article 10 The "relevant materials of the Chinese party" as used in item 6) of Article 11 of the Regulations shall refer to the business license (copy) and the annual reports of the last 3 years of the Chinese Party.
Article 11 The "annual reports" as used in the Regulations and these Rules shall be audited, and the auditing opinions given by the accredited accounting firm of the country or region where the applicant is located shall be attached. The Chinese or English versions shall be attached for the annual reports printed in languages other than Chinese or English.
Article 12 The "other materials as required by the People's Bank of China" as used in Article 9 , Article 10 and Article 11 of the Regulations shall at least include the following materials: 1) for the applicant applying for establishing foreign-funded institution for the first time, the information about the financial system and the provisions of laws and regulations on financial supervision and control of the country or region where it is located; 2) articles of association of the applicant; 3) diagram of organization and structure of the applicant and the group to which it belongs, list of the main shareholders, list of the overseas branches and associate companies.
Article 13 The Chinese versions shall be attached for the application materials, as required to be submitted by these Rules, if they are written in the foreign language except the annual reports.
Article 14 If a foreign bank wishes to add a new branch bank in China, in addition to meeting the conditions as provided for in Article 7 of the Regulations, the business operations of the branches it has already set up in China shall be well and with no record of major violations of laws and rules. The application for adding branch bank of foreign bank may only be filed one year after the day on which the People's Bank of China approved the establishment of its branch for the last time.
Article 15 The following conditions shall be met if a solely foreign-funded bank or a joint venture bank applies to establish a branch bank: 1) having practiced within the territory of China for not less than 3 years, and having made profits for the two successive fiscal years before the application is filed and having no record of major violations of laws and rules; 2) the rate of capital sufficiency being not lower than 8% and assets quality being well; 3) in case of addition of a branch bank, the application may only be filed one year after the day on which the People's Bank of China approved the establishment of branch bank for last time; 4) the applicant shall allocate convertible currency equal to not less than 100,000,000 Renminbi as the working capital of the branch bank to be established; the total amount of the working capital allocated by the applicant for all of its branch banks within the territory of China, including the branch to be established, shall not exceed 60% of its registered capital; 5) other prudent conditions as provided for by the People's Bank of China.
Article 16 If a solely foreign-funded bank or a joint venture bank applies to establish a branch bank, it shall submit the following materials to the branch of the People's Bank of China of the place where it is located, and shall, after being approved after examination by the branch of the People's Bank of China of the place where it is located, submit the materials level by level to the head office of the People's Bank of China for examination and approval: 1) application form signed by the board chairman or the president (CEO, general manager) of the applicant, of which the contents shall include: the name of the branch bank to be established, the amount of working capital to be allocated, and the business types applied for, etc; 2) resolution of the board of directors on approval for applying for the establishment of the branch bank; 3) report on feasibility study; 4) business license (copy); 5) annual reports of the last three years; 6) articles of association of the applicant; 7) other materials as required by the People's Bank of China.
Article 17 The applicant submit to the president of the People's Bank of China for the establishment of foreign-funded institution shall sign by the board chairman or the president (CEO, general manager), to the president of the People's Bank of China; the applicant submit to the president of the People's Bank of China for the establishment of branch of foreign bank shall sign by the board chairman or the president (CEO, general manager).
Article 18 The applicant for the establishment of foreign-funded institution shall submit the application materials (triplication) as provided for in Article 9 , Article 10 , and Article 11 of the Regulations to the branch of the People's Bank of China of the place where it is located, and shall, after being examined and approved by the branch of the People's Bank of China of the place where the branch bank to be established is located, submit the materials level by level to the head office of the People's Bank of China for examination and approval. If the applicant fails to meet the qualification conditions (excluding the prudent conditions) as required by Article 6 , Article 7 , and Article 8 of the Regulations and Article 14 and Article 15 of these Rules, the branch bank of the People's Bank of China of the place where the applicant is located shall make the decision on rejecting the application, and shall notify the applicant of the reasons for rejection, and shall report the notification on rejection to the head office of the People's Bank of China level by level.
Article 19 The head office of the People's Bank of China shall make a decision on whether to accept the application or not and notify the applicant in written form within 6 months from the day of receiving the complete application materials for the establishment of foreign-funded institution. The applicant that has received the notification of acceptance of application shall, within 15 days from the day of receiving the notification, draw the formal application form at the branch bank of the People's Bank of China of the place where the institution to be established is located and start the preparation work. The preparation period shall be 6 months. If the applicant fails to draw the formal application form within the prescribed period, the applicant may not file the application for the establishment of business institution in the same city again in one year from the day of receiving the notification.
Article 20 The applicant that has received the notification of the head office of the People's Bank of China on rejection may not file the application for the establishment of business institution in the same city again in one year from the day of receiving the notification
Article 21 The "principal" as used in Article 14 of the Regulations shall refer to the board chairman or the president (CEO, general manager) of the foreign-funded institution with the legal person status, or the president (general manager) of the branch bank of foreign bank.
Article 22 The applicant shall finish the following work within the preparation period and submit the relevant materials to the branch bank of the People's Bank of China of the place where it is located: 1) establishing the system of internal control, including the system of internal organization, authorization and accreditation, management of credit fund, fund trade, accounting, control policies and operation procedures of computer system; 2) allocating appropriate number of business personnel according to the needs of business development, thus to meet the requirements such as 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; 3) printing the important vouchers and bills for external use; 4) equipping the safety protection facilities accredited by the relevant departments; 5) the accounting firm accredited by the People's Bank of China making audit of the system of internal control, the accounting system, and the computer system before the start of practice.
Article 23 If the applicant applies for extension of the preparation period, it shall file the application to the branch bank of the People's Bank of China of the place where it is located one month before the expiration of the preparation period. The application form shall be signed by the board chairman or the president (CEO, general manager) of the foreign-funded institution with legal person status to be established or the president or general manager of the branch bank of foreign bank. If the applicant fails to file the application for extension of preparation period within the prescribed time limit, the People's Bank of China shall reject its application for period extension. The branch bank of the People's Bank of China of the place where the applicant is located shall make a decision on whether to approve the extension or not within 15 days from the day of receiving the application materials for extension of the preparation period. If it decides not to approve, it shall notify the applicant of the reasons for not approving in written form and shall report to the head office of the People's Bank of China level by level.
Article 24 After the preparation work is finished, the applicant shall report the application form filled out, together with the documents as provided for in Article 14 of the Regulations to the branch bank of the People's Bank of China of the place where the institution to be established is located. And after the branch bank of the People's Bank of China of the place where the institution to be established is located approves after examination, the materials shall be reported level by level to the head office of the People's Bank of China for examination and approval.
Article 25 The head office of the People's Bank of China shall make a decision on whether to approve or not within 2 months from the day of receiving the formal application form and the relevant materials for the establishment of foreign-funded financial institution. The applicant shall, within 15 days of receiving the notification of the head office of the People's Bank of China, draw the documents of reply for the establishment of foreign-funded financial institution at the head office of the People's Bank of China. Where the decision on not approving is made, the applicant may not file the application for the establishment of business institution in the same city again in one year from the day of receiving the notification of the head office of the People's Bank of China on not approving.
Article 26 The applicant that has been approved to establish a foreign-funded financial institution shall, after drawing the documents of approval of the head office of the People's Bank of China for the establishment of foreign-funded financial institution, file the application to the branch bank of the People's Bank of China where it is located for examination before acceptance and starting practice. The application form shall be signed by the board chairman or president (CEO, general manager) of the foreign-funded institution with legal person status to be established. After passing the examination and being accepted by the branch bank of the People's Bank of China where it is located, the applicant shall, taking the opinions on passing the examination and acceptance, draw the license for financial business at the head office of the People's Bank of China. The foreign-funded financial institution failing the examination may apply for reexamination to the institution of examination and acceptance 10 days after receiving the notification on examination and acceptance.
Article 27 The foreign-funded financial institution shall, before starting practice, make public announcements on the national newspapers designated by the head office of the People's Bank of China and the local newspapers designated by the branch bank of the People's Bank of China of the place where it is located. The foreign-funded financial institution shall, before starting practice, report the date of starting practice in written form to the branch bank of the People's Bank of China of the place where it is located.
Article 28 The foreign-funded financial institution shall start practice within 90 days from the day on which the head office of the People's Bank of China approves its establishment, except that it has been approved to postpone the start of practice by the branch bank of the People's Bank of China under special circumstances. If the foreign-funded financial institution applies to postpone the start of practice, it shall file the application for postponing the start of practice with the branch bank of the People's Bank of China of the place where it is located within 60 days after its establishment upon approval. The application form shall be signed by the board chairman or president (CEO, general manager) of the foreign-funded institution with legal person status. The branch bank of the People's Bank of China of the place where the applicant is located shall make a decision on whether to approve the postponing or not within 15 days from the day of receiving the application materials. Where the decision on not approving is made, it shall notify the foreign-funded financial institution of the reasons for not approving in written form, and shall report to the head office of the People's Bank of China level by level. If the foreign-funded institution fails to file the application for postponing the start of practice within the prescribed time limit, the People's Bank of China shall not accept its application for postponing. The start of practice may be postponed for 90 days at the most. If the foreign-funded financial institution fails to start practice upon the expiration of the period, the original approval for establishment shall be invalidated automatically. The foreign-funded institution shall return the license for financial business and the copy to the head office of the People's Bank of China. And the applicant may not file the application for establishing business institution in the same city again in one year from the day on which the original approval for establishment is invalidated.
Chapter III Business Scope
Article 29 "Trading government bonds and financial bonds, and trading other valuable foreign currency securities other than stocks" as used in item 4) of Article 17 and item 4) of Article 18 shall include, but not be limited to, the following businesses: bonds of Chinese or foreign governments, bonds of Chinese financial institutions and bonds of Chinese non-financial institutions that are issued overseas.
Article 30 "Providing services of credit rating and consulting" as used in item 12) of Article 17 and item 8) of Article 18 shall refer to the credit rating and consulting related to bank business.
Article 31 If foreign-funded financial institutions operate, within the business scope as provided for by Article 17 or Article 18 of the Regulations, foreign exchange business for overseas institutions, foreign-funded enterprises, foreign institutions stationed in China, representative institutions of Hong Kong, Macao or Taiwan stationed in the mainland, foreigners and compatriots from Hong Kong, Macao or Taiwan, and some foreign exchange businesses for non-foreign-funded enterprises, the following conditions shall be met separately: 1) The operating fund of the branch banks of a foreign bank shall not be less than convertible currencies equal to 100,000,000 Renminbi; 2) The registered capital of a solely foreign-funded or a joint venture bank shall not be less than convertible currencies equal to 300,000,000 Renminbi; 3) The registered capital of a solely foreign-funded financial company or a joint venture financial company shall not be less than convertible currencies equal to 200,000,000 Renminbi.
Article 32 If foreign-funded financial institutions operate, within the business scope as provided for by Article 17 or Article 18 of the Regulations, the comprehensive foreign exchange business for all kinds of customers, the following conditions shall be met separately: 1) The working capital of the branch banks of a foreign bank shall not be less than convertible currencies equal to 200,000,000 Renminbi; 2) The registered capital of a solely foreign-funded or a joint venture bank shall not be less than convertible currencies equal to 400,000,000 Renminbi; 3) The registered capital of a solely foreign-funded financial company or a joint venture financial company shall not be less than convertible currencies equal to 300,000,000 Renminbi.
Article 33 The foreign-funded financial institutions which meet the provisions of Article 20 of the Regulations and have been approved to operate, within the business scope as provided for by Article 17 or Article 18 of the Regulations, foreign exchange business and Renminbi business for overseas institutions, foreign-funded enterprises, foreign institutions stationed in China, representative institutions of Hong Kong, Macao or Taiwan stationed in the mainland, foreigners and compatriots from Hong Kong, Macao or Taiwan, and to operate some foreign exchange business and Renminbi business for non-foreign-funded enterprises shall meet the following conditions separately: 1) The working capital of the branch bank of a foreign bank shall not be less than convertible currencies equal to 200,000,000 Renminbi, among which the operating fund in Renminbi shall not be less than 100,000,000 Renminbi, and the working capital in foreign exchange shall not be less than convertible currencies equal to 100,000,000 Renminbi; 2) The registered capital of a solely foreign-funded or a joint venture bank shall not be less than convertible currencies equal to 400,000,000 Renminbi, among which the capital in Renminbi shall not be less than 100,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 300,000,000 Renminbi; 3) The registered capital of a solely foreign-funded financial company or a joint venture financial company shall not be less than convertible currencies equal to 300,000,000 Renminbi, among which the capital in Renminbi shall not be less than 100,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 200,000,000 Renminbi
Article 34 The foreign-funded financial institutions which meet the provisions of Article 20 of the Regulations and have been approved to operate, within the business scope as provided for by Article 17 or Article 18 of the Regulations, comprehensive foreign exchange business for all kinds of customers, to operate Renminbi business for overseas institutions, foreign-funded enterprises, foreign institutions stationed in China, representative institutions of Hong Kong, Macao or Taiwan stationed in the mainland, foreigners and compatriots from Hong Kong, Macao or Taiwan, and to operate some Renminbi business for non-foreign-funded enterprises shall meet the following conditions separately: 1) The working capital of the branch bank of a foreign bank shall not be less than convertible currencies equal to 300,000,000 Renminbi, among which the working capital in Renminbi shall not be less than 100,000,000 Renminbi, and the working capital in foreign exchange shall not be less than convertible currencies equal to 200,000,000 Renminbi; 2) The registered capital of a solely foreign-funded or joint venture bank shall not be less than convertible currencies equal to 500,000,000 Renminbi, among which the capital in Renminbi shall not be less than 100,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 400,000,000 Renminbi; 3) The registered capital of a solely foreign-funded financial company or a joint venture financial company shall not be less than convertible currencies equal to 40,000,000 Renminbi, among which the capital in Renminbi shall not be less than 100,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 300,000,000 Renminbi
Article 35 The foreign-funded financial institutions which meet the provisions of Article 20 of the Regulations and have been approved to operate, within the business scope as provided for by Article 17 or Article 18 of the Regulations, comprehensive foreign exchange business for all kinds of customers, and to operate all Renminbi business for overseas institutions, foreign-funded enterprises, foreign institutions stationed in China, representative institutions of Hong Kong, Macao or Taiwan stationed in the mainland, foreigners and compatriots from Hong Kong, Macao or Taiwan, and non-foreign-funded enterprises shall meet the following conditions separately: 1) The working capital of the branch bank of a foreign bank shall not be less than convertible currencies equal to 400,000,000 Renminbi, among which the working capital in Renminbi shall not be less than 200,000,000 Renminbi, and the working capital in foreign exchange shall not be less than convertible currencies equal to 200,000,000 Renminbi; 2) The registered capital of a solely foreign-funded or joint venture bank shall not be less than convertible currencies equal to 600,000,000 Renminbi, among which the capital in Renminbi shall not be less than 200,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 400,000,000 Renminbi; 3) The registered capital of a solely foreign-funded financial company or a joint venture financial company shall not be less than convertible currencies equal to 50,000,000 Renminbi, among which the capital in Renminbi shall not be less than 200,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 300,000,000 Renminbi
Article 36 The foreign-funded financial institutions which meet the provisions of Article 20 of the Regulations and have been approved to operate, within the business scope as provided for by Article 17 or Article 18 of the Regulations, comprehensive foreign exchange business for all kinds of customers, and to operate comprehensive Renminbi business shall meet the following conditions separately: 1) The working capital of the branch bank of a foreign bank shall not be less than convertible currencies equal to 600,000,000 Renminbi, among which the working capital in Renminbi shall not be less than 400,000,000 Renminbi, and the working capital in foreign exchange shall not be less than convertible currencies equal to 200,000,000 Renminbi; 2) The registered capital of a solely foreign-funded or a joint venture bank shall not be less than convertible currencies equal to 1,000,000,000 Renminbi, among which the capital in Renminbi shall not be less than 600,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 400,000,000 Renminbi; 3) The registered capital of a solely foreign-funded financial company or a joint venture financial company shall not be less than convertible currencies equal to 70,000,000 Renminbi, among which the capital in Renminbi shall not be less than 400,000,000 Renminbi, and the capital in foreign exchange shall not be less than convertible currencies equal to 300,000,000 Renminbi
Article 37 "Some foreign exchange business" as used in Article 31 and Article 33 of these Rules shall refer to the transfer of deposit, export settlement under the item of foreign exchange loans and the import settlement and remit-in remittance under the item of loan set up for non-foreign-funded enterprises. "Some Renminbi Business" as used in Article 33 and Article 34 of these Rules shall refer to the accessory Renminbi loan and the transfer of deposit thereof for the non-financial funded enterprises that have obtained the foreign exchange loan from that foreign-funded financial institution, and the guarantee for the non-foreign-funded enterprises that have obtained the foreign exchange loan from that foreign-funded financial institution.
Article 38 Item 1) and item 2) of Article 20 of the Regulations shall mean that the institution set up by the applicant has practiced for more than 3 years in the city where it wishes to launch or expand the Renminbi business, and has made profit for two successive years before the application is filed.
Article 39 If a foreign-funded financial institution wishes to operate Renminbi business or expand the scope of the service object, it shall submit the following materials (triplication) to the branch of the People's Bank of China of the place where it is located, and the materials shall be, being examined and approved by the sub-branch of the branch bank of the People's Bank of China of the place where it is located, submitted to the head office of the People's Bank of China for examination and approval: 1) application form signed by the board chairman or president (CEO, general manager) of the applicant to the president of the People's Bank of China, and the contents shall include: the concrete contents of the Renminbi business to be operated or the scope of service object to be expanded, the capital to be increased and the working capital to be allocated by the head office, etc; 2) report on feasibility study; 3) articles of association to be modified (only limited to the foreign-funded institutions with legal person status); 4) operation rules for the business to be launched and the internal control system; 5) copy of the license for financial business of the foreign-funded financial institution; 6) other materials to be submitted as required by the People's Bank of China.
Article 40 The foreign-funded financial institution shall finish the following preparation work within 4 months from the day on which the People's Bank of China approves it to operate Renminbi business or expand the scope of service object, and shall report the relevant materials to the branch bank of the People's Bank of China of the place where it is located: 1) transferring the increased capital or working capital to China to be verified by the accounting firm accredited by the People's Bank of China, and the accounting firm shall issue the certification on verification of capital; 2) allocating appropriate number of business personnel meeting the need of business development; 3) printing important business vouchers and bills for external use; 4) equipping safety protection facilities accredited by the relevant department. If the foreign-funded financial enterprise fails to finish the preparation work within 4 months, the approval of the head office of the People's Bank of China shall be invalidated automatically.
Article 41 The foreign-funded financial institution shall submit the application for the examination before acceptance to the branch bank of the People's Bank of China of the place where it is located, and the application form shall be signed by the board chairman or president (CEO, general manager) of the foreign-funded institution with legal person status or the president or general manager of the branch bank of foreign bank. After passing the examination before acceptance, the foreign-funded financial institution shall, taking with it the opinions on passing the examination before acceptance and the certification on verification of capital, go to the head office of the People's Bank of China to change the license for operation of financial business. The foreign-funded financial institutions failing the examination before acceptance may apply for reexamination to the institution of examination and acceptance 10 days after receiving the notification of examination and acceptance.
Article 42 Before starting the business listed in the documents of approval, the foreign-funded financial institution shall make public announcements on the national newspapers designated by the head office of the People's Bank of China and the local newspapers designated by the branch bank of the People's Bank of China.
Article 43 The scope of area where the foreign-funded financial institution operates Renminbi business shall be the cities where foreign-funded institutions have already been allowed to operate Renminbi business.
Article 44 "New line of business" as used in Article 21 of the Regulations shall be the lines of financial business that the banks or financial companies within the territory of China haven't provided, or that the banks or financial companies within the territory of China have already provided but have relatively high operation risks. To apply for a new line of financial business, the foreign-funded financial institution shall submit the following materials (triplication) to the branch bank of the People's Bank of China of the place where it is located, and the materials shall be, after being examined and approved by the branch bank of the People's Bank of China of the place where it is located, submitted to the head office of the People's Bank of China for examination and approval: 1) application form signed by the person authorized by the headquarters of the foreign-funded financial institution; 2) detailed introduction of the business to be launched, necessary preparations for running the business, including: operation rules, analysis on risk-proceeds, control measures, allocation of professional personnel and computer system, etc; 3) other materials to be submitted as required by the People's Bank of China. The People's Bank of China shall make a decision on whether to approve or not within 60 days from the day on which it received the complete application materials from the foreign-funded institution.
Article 45 If a foreign-funded financial institution wishes to launch new lines of business in more than two branches within the territory of China, the headquarters of the foreign-funded institution with legal person status or the principal reporting bank of the foreign bank may submit the application materials uniformly to the branch bank of the People's Bank of China of the place where it is located, and the materials shall be submitted level by level to the head office of the People's Bank of China for examination and approval.
Article 46 The foreign-funded financial institution applying for operating the "other businesses approved by the People's Bank of China" as provided for by item 13) of Article 17 and item 10) of Article 44 of the Regulations shall go through the procedures for application according to the provisions of Article 44 of these Rules.
Article 47 When launching the products or services within the business scope and lines that have been approved, foreign-funded financial institution shall report to the branch bank of the People's Bank of China of the place where it is located.
Article 48 Foreign-funded financial institutions may engage in the business of foreign exchange settlement and sale according to the relevant provisions.
Article 49 The solely foreign-funded banks, joint venture banks and branch banks of foreign banks that have been approved to operate Renminbi business may engage in the business of interbank borrowing of Renminbi according to the relevant provisions of the People's Bank of China.
Chapter IV Management of Post Qualifications
Article 50 One shall meet the following basic conditions to be the senior managerial personnel of foreign-funded financial institutions: 1) being familiar with the laws and regulations of China on financial supervision and control; 2) having the professional knowledge, work experience and organizing and managing ability corresponding to the post assumed; 3) having no record of bad deeds.
Article 51 One may not be the senior managerial personnel of foreign-funded financial institutions if he (she) has been in any of the following situations: 1) having record of crime; 2) being given major punishment for violation of law; 3) being mainly responsible or directly responsible as a leader for the bankruptcy, major violation of rules, revocation of the license for operation of financial business or the business license, and it hasn't been for 5 years since that; 4) causing major losses to the financial institution or other enterprise in which he (she) took post due to major work fault in the past 5 years.
Article 52 The People's Bank of China shall apply two forms, namely the ratification system and the record system, for the examination and verification of the senior managerial personnel of foreign-funded financial institutions.
Article 53 The senior managerial personnel of foreign-funded financial institution assuming the following posts shall be subject to the system of ratification and meet the following conditions: 1) to be the board chairman, president (general manager) of a foreign-funded institution with legal person status, one shall have more than 10 years of financial work experience or more than 15 years of experience of relevant economic work (among which the financial work experience shall be more than 5 years), and have more than 3 years of experience of working on the posts higher than the business department manager or than the posts equal to business department manager; 2) to be the vice board chairman, president (general manager) of a foreign-funded institution with legal person status, president (general manager) of a foreign bank, one shall have more than 5 years of financial work experience or more than 10 years of experience of the relevant economic work (among which there shall be more than 3 years of financial work experience), and have more than two years of experience of working on the posts higher than the business department manager or than the posts equal to the business department manager; 3) to be the vice president (vice general manager ) of the branch bank of a foreign bank, the president of the sub-branch of a foreign bank, one shall have more than 4 years of financial work experience or more than 6 years of experience of the relevant economic work (among which the financial work experience shall be more than 2 years); 4) having the education background of regular colleges or universities or higher levels; or having been engaged in the area of finance for more than 6 years or in relevant economic work for more than 8 years (among which more than 4 years for financial work) if one doesn't have the education background of regular colleges or universities or higher levels.
Article 54 The head office of the People's Bank of China shall be responsible for ratifying or canceling the post qualifications for the following personnel: 1) the board chairman, president (general manager) of a foreign-funded institution with legal person status; 2) the president (general manager) of a branch bank of foreign bank; The branch (department of business management) of the People's Bank of China shall be responsible for ratifying or canceling the post qualifications of the following personnel; 1) the vice president (vice general manager) of a foreign-funded institution with legal person status; 2) the vice president (vice general manager) of the branch bank of a foreign bank, and the president of the sub-branch of a foreign bank.
Article 55 Where the system of ratification is applied to the post qualification for senior managerial personnel, the applicant shall submit the following materials (triplication) to the branch bank of the People's Bank of China of the place where it is located: 1) the application form to the People's Bank of China signed by the signer authorized by the applicant. Those to be ratified by the head office of the People's Bank of China shall be submitted to the president of the People's Bank of China; those to be ratified by the branch bank or the department of business management of the People's Bank of China shall be submitted to the president of branch bank or the director of the department of business management of the People's Bank of China; 2) the authorization letter signed by the signer authorized by the applicant; 3) resume of the person to take the post; 4) copy of the identification certification and education background certification of the person to take the post; 5) where the articles of association of a foreign-funded institution with legal person status provides for that the general meeting of shareholders shall be held, the resolution of the general meeting of the shareholders shall also be submitted; 6) declaration of no bad record signed by the person to take the post; 7) other materials as required by the People's Bank of China.
Article 56 The post term of the senior managerial personnel of foreign-funded institutions, to which the system of ratification is applied, shall not be less than 2 years, and the personnel may not take other managerial posts of other business institutions within their post term, with the exception of those approved by the People's Bank of China. The senior managerial personnel of foreign-funded institutions may not take the posts of the representative institutions within China concurrently.
Article 57 The "senior managerial personnel" as used in item 7) of Article 33 of the Regulations shall refer to the senior managerial personnel to whom the system of ratification is applied.
Article 58 The system of record shall be applied to the senior managerial personnel of foreign-funded financial institutions assuming the following posts: 1) the directors of the board, the assistant of president (general manager), the general financial inspector; the general auditor; the senior compliance manager and the general operation inspector of a foreign-funded financial institution with legal person status; 2) the general accountant, the compliance manager and the general operation inspector of the branch bank of a foreign-funded institution with legal person status; 3) the vice president of the sub-branch established by the branch bank of a foreign bank; 4) other senior managerial personnel that the People's Bank of China considers need to be put on record.
Article 59 Where the system of record is applied to the post qualification of senior managerial personnel, the foreign-funded financial institution shall submit the following materials to the branch bank of the People's Bank of China: 1) authorization letter signed by the signer authorized by the foreign-funded financial institution; 2) resume of the person to take the post; 3) copy of the identification certification and education background certification of the person to take the post; 4) the presentation on whether there is bad record signed by the person to take the post; 5) other materials as required by the People's Bank of China.
Article 60 The resume, identification certification and education background certification of the person to take the post shall be signed by the person authorized by the applicant.
Article 61 Where the president (general manager) of a foreign-funded financial institution and the president of its sub-branch leaves the post for one month successively, that shall be reported to the branch of the People's Bank of China of the place where it is located; where the personnel leave for more than 3 successive months, they shall be replaced.
Article 62 If the senior managerial personnel are responsible for any of the following matters, the People's Bank of China may, according to the seriousness of the circumstances and the subsequences, cancel their post qualification for a certain period or even for their lifetime: 1) being investigated for criminal responsibilities according to law; 2) refusing, intervening in, frustrating or seriously affecting the supervision and control carried out by the People's Bank of China according to law; 3) causing major losses of property or the occurrence of major financial crimes due to the imperfection of the internal management and control system or the poor implementation of supervision; 4) causing the institution in which he(she) takes post to be taken over, merged or declared bankruptcy due to the business operation seriously violating laws and rules, the imperfection of internal system or the lasting poor operation and management; 5) causing serious losses to the institution in which he(she) takes post due to the lasting poor operation and management; 6) as to the senior managerial personnel of foreign-funded financial institutions that have already taken the posts, if the People's Bank of China finds that they have, before taking the posts, violated laws or rules, or have other acts not fit for the posts of senior managerial personnel; 7) other matters as determined by the People's Bank of China.
Article 63 Where the post qualification of the senior managerial personnel need to be ratified by the head office of the People's Bank of China, the People's Bank of China shall give the reply on whether to approve or not within 90 days from the day of receiving the complete application materials. Where the post qualification of the senior managerial personnel need to be ratified by the branch bank or the department of business management of the People's Bank of China, the People's Bank of China shall give a reply on whether to approve or not within 45 days from the day of receiving the complete application materials. Where the decision on not approving is made, the applicant shall be notified in written form of the reasons. Where the taking of post of the senior managerial personnel shall be reported to the branch bank of the People's Bank of China of their locations for record, the approval shall be regarded as granted if the People's Bank of China hasn't raised written objections within 30 days from the day of receiving the complete materials.
Chapter V Supervision and Management
Article 64 The foreign bank that has established two or more than two branch banks within China shall designate the principal reporting bank to be responsible for the combination of financial statements of its branch banks within China.
Article 65 The "interest-earning assets" as used in Article 24 of the Regulations shall include foreign exchange interest-earning assets and Renminbi interest-earning assets. Thirty percent of the working capital for foreign exchange business of the branch bank of a foreign bank shall be deposited in foreign currency for fixed term of not less than 6 months (including 6 months) as the foreign exchange interest-earning assets; thirty percent of the working capital for Renminbi business shall be deposited in Renminbi national debt or in Renminbi for fixed term of not less than 6 months (including 6 months) as the Renminbi interest-earning assets. The fixed deposit in home currency or foreign currency of not less than 6 months (including 6 months) shall be deposited in three or less than three Chinese commercial banks within China that have steady operations and considerable strength. The interest rate for the fixed deposit of interest-earning assets shall be determined by both parties according to the relevant provisions. The branch bank of a foreign bank shall report the bank where the interest-earning assets are deposited and the interest rate to the branch bank of the People's Bank of China. The branch bank of foreign bank may not use the interest-earning assets it holds in the form of fixed deposit without the approval of the branch bank of the People's Bank of China of the place where it is located. The bank where the interest-earning assets are deposited shall handle the alteration of the interest-earning assets according to the documents of approval of the People's Bank of China.
Article 66 The "capital" used in Article 26 and Article 28 of the Regulations shall refer to the registered capital, the capital accumulation fund, the surplus accumulation fund, the undistributed profit, the reserve fund for general loan losses, the revaluated reserves, the balance of the sum of long-term secondary bonds of not less than 5 years (including 5 years) with the deduction of the investment to the institutions of which the financial statements are not combined. The "totality of the working capital and reserve" as used in Article 28 of the Regulations shall refer to the totality of the working capital, undistributed profit and the reserve fund for general loan losses. The "risk assets" as used in Article 28 of the Regulations shall refer to the weighted risk assets on and off the financial statements calculated according to the provisions of the People's Bank of China on the weighted risk assets. The method of calculating and examining the "rate of capital sufficiency" as used in Article 25 of the Regulations shall be implemented according to the relevant provisions of the People's Bank of China on the rate of capital sufficiency. The "proportion" as provided for in Article 28 of the Regulations shall be calculated on the basis of each branch established within China by foreign-funded financial institutions, and shall be examined on the basis of the average balance at the end of each month every quarter. The People's Bank of China may, according to the risk status of a foreign-funded institution with legal person status, raise special requirements for its rate of capital sufficiency.
Article 67 The "associates" as used in Article 26 of the Regulations shall refer to the enterprises among which the enterprises of one party are capable of directly controlling or jointly controlling the enterprises of the other party or exerting major influences on the enterprises of the other party, and refer to the enterprises among which the enterprises of two or more than two parties are under the control of one party. The "balance of credits granted" as used in Article 26 of the Regulations shall include the programs on and off the financial statements.
Article 68 The "liquid assets" as used in Article 29 of the Regulations shall refer to cash, gold, deposits in the People's Bank of China, interbank deposits, interbank loans to be due in one month, net amount of the correspondent credit given to foreign associated banks and their affiliated institutions, discounts and other bills bought to be due in one month, other receivable funds to be due in one month, loans to be due in one month, bonds to be due in one month and other assets that may be realized in one month. The part that may not be drawn back as estimated shall be deducted from the assets aforesaid. The "liquid debts" as used in Article 29 of the Regulations shall refer to deposits to be due in one month, interbank borrowings to be due in one month, payable funds to be due in one month, net amount of correspondent debt owed to the foreign associated banks and their affiliated institutions, and other debts to be due in one month. Foreign-funded financial institutions shall calculate separately on the basis of Renminbi and foreign currencies every day, and shall keep the proportion of liquidity as provided for in Article 29 of the Regulations. The People's Bank of China shall carry out combined-statement examination of the liquidity of foreign-funded institutions with legal person status, and shall examine the branch banks of a foreign bank as one institution.
Article 69 The "foreign exchange deposits drawn within China" as used in Article 30 of the Regulations shall include the interbank and non-interbank deposits of foreign exchange, and the method for calculating the "total foreign exchange assets within China" shall be as follows: Total foreign exchange assets within China=total foreign exchange assets ?C correspondent foreign exchange (assets) of foreign associated banks ?C correspondent foreign exchange (assets) of foreign affiliated institutions ?C overseas foreign exchange loans ?C foreign interbank deposits of foreign exchange ?C foreign interbank loans of foreign exchange ?C foreign investment of foreign exchange. The following foreign exchange investment shall not be included in the overseas investment of foreign exchange: bonds of Chinese government issued abroad, bonds of Chinese financial institutions and bonds of Chinese non-financial institutions. The proportion as provided for in Article 30 of the Regulations shall be examined on the basis of the balance at the end of each month of a single institution.
Article 70 The credit assets transferred in by the head office or associated bank of a foreign-funded financial institution shall be approved by the branch bank of the People's Bank of China of the place where it is located.
Article 71 Foreign-funded financial institutions shall implement the provisions of the People's Bank of China on the classification of assets.
Article 72 Foreign-funded financial institutions shall apply the prudent accounting system.
Article 73 The conditions for granting credit to interested persons may not be more preferential than those for granting the same kind of credit to other borrowers. The interested persons as used in this Article shall refer to 1) the directors of board, inspectors, managers, credit business person and their close relatives of the foreign-funded financial institutions; 2) the companies, enterprises and other economic organizations in which the aforesaid personnel invest or take the senior managerial posts; 3) shareholders and their associated enterprises of the foreign-funded institutions with legal person status.
Article 74 The "proportion" as used in Article 26 and Article 27 of the Regulations shall be examined on the basis of the balance at the end of each quarter.
Article 75 The "registered Chinese accountants" as used in Article 32 of the Regulations shall refer to the registered Chinese accountants of the accounting firms that have been examined and approved by the People's Bank of China to engage in the relevant auditing business.
Article 76 Where a foreign-funded institution with legal person status adjusts or transfers its registered capital, alters the total amount of capital it holds or the shareholders with more than 10% of the total shares, or where a foreign bank applies for altering its working capital of its branch banks within China, the following materials shall be submitted to the branch bank of the People's Bank of China of the place where it is located, and shall, after being examined and approved by the branch bank of the People's Bank of China of the place where it is located, be reported level by level to the head office of the People's Bank of China for examination and approval: 1) application form signed by the board chairman or president (CEO, general manager) of the applicant; 2) resolution of the board of directors of the foreign-funded institution with legal person status on adjusting, transferring the registered capital or changing the shareholders; 3) where the foreign investor of the foreign-funded institution with legal person status alters the amount of investment or the proportion of shares, the resolution of board of directors of the foreign investor and the opinion letter of the authority of financial supervision of the country or region where it is located shall be provided; 4) other materials to be provided as required by the People's Bank of China.
Article 77 Where a foreign bank wishes to alter the name of its branch bank within China because of merger or splitting, it may go through the formal procedures for name alteration in two steps or straightforward: The head office of the foreign bank may file the preliminary application to the head office of the People's Bank of China, and submit the following materials; 1) the application form to the president of the People's Bank of China signed by the board chairman or president (CEO, general manager) of the foreign bank; 2) the recognition letter or approval letter of the authority of financial supervision of the country or region where the foreign bank is located. The head office of the People's Bank of China shall, after receiving the complete application materials, confirm its application for name alteration in the form of signing letter. The foreign bank shall, after altering the name formally, submit the following materials to the head office of the People's Bank of China within 60 days, and shall go through the formal procedures for altering the name of its branch bank within China: 1) the application form signed by the board chairman or president (CEO, general manager) of the new institution; 2) the application form printed and distributed by the People's Bank of China which is filled in according to the provisions; 3) the formal approval letter of the authority of financial supervision of the country or region where the new institution is located; 4) the business license (copy) of the new institution; 5) the liability guarantee letter for the taxes and debts of the branch bank within China of the new institution signed by the board chairman or president (CEO, general manager) of the new institution; 6) the combined financial statements of the new institution; 7) the articles of association of the new institution; 8) the list of the board members of the new institution; 9) the graphic of the organization and structure of the new institution; 10) the resume, identification certification, education background certification of the president or general manager of the branch bank within China of the new institution; 11) the authorization letter to the president or general manager of the branch bank within China signed by the board chairman or president (CEO, general manager) of the new institution. The foreign bank shall submit the copies of the preliminary application and the formal application materials to the branch bank of the People's Bank of China of the place where the branch bank within China of the foreign bank is located.
Article 78 After a foreign-funded financial institution is merged or split, its registered capital or working capital and the business scope shall be ratified by the People's Bank of China over again.
Article 79 Where a foreign-funded financial institution applies for changing its name because of other reasons, it shall submit the application form signed by its board chairman or president (CEO, general manager) to the People's Bank of China, and shall submit the copy of the application form to the branch bank of the People's Bank of China of the place where the foreign-funded financial institution is located.
Article 80 Where a foreign-funded financial institution changes its business place in the same city, it shall submit the following materials to the branch bank of the People's Bank of China of the place where it is located, and the materials shall, after being examined and approved by the branch of the People's Bank of China of its location, be submitted level by level to the head office of the People's Bank of China: 1) the application letter to the branch bank of the People's Bank of China of the place where it is located signed by the board chairman or president (CEO, general manager) of the foreign-funded institution with legal person status or the president or general manager of the branch bank of foreign bank; 2) other materials to be provided as required by the People's Bank of China. The local branch bank of the People's Bank of China shall finish the work of examination and acceptance according to the relevant provisions. Where the examination is passed, the local branch bank of the People's Bank of China shall issue the documents of approval for the foreign-funded financial institution to alter its business place in the same city. The foreign-funded financial institution failing the examination may apply to the examination and acceptance agency for reexamination 10 days after receiving the notification of examination and acceptance.
Article 81 Where a foreign-funded financial institution has been approved to alter its registered capital or working capital, to alter the total amount of capital it holds or the shareholders with more than 10% of the total shares, it shall, within 30 days from the day of receiving the documents of approval of the head office of the People's Bank of China, retain the registered accounting firm accredited by the People's Bank of China to verify the capital, and shall submit the certification of the capital verification to the local branch bank of the People's Bank of China.
Article 82 Where a foreign-funded institution with legal person status applies for changing its articles of association, it shall submit the following materials to the local branch bank of the People's Bank of China, and the materials shall, after being examined and approved, be reported level by level to the head office of the People's Bank of China for examination and approval: 1) application form signed by the board chairman or president (CEO or general manager) of the applicant; 2) resolution of the shareholder meeting or the board of directors.
Article 83 Where issues or situations as listed in Article 33 of the Regulations occur and it is needed to alter the license for financial business, a foreign-funded financial institution shall, within 60 days from the day of receiving the formal documents of approval, handle the alteration at the head office of the People's Bank of China. Where it is needed to verify the capital, the foreign-funded financial institution shall, taking the certification of capital verification, change the license for financial business at the head office of the People's Bank of China. Where examination and acceptance is needed, the foreign-funded financial institution shall, taking the opinion letter on passing the examination before acceptance issued by the local branch bank of the People's Bank of China, change the license for financial business at the People's Bank of China. The foreign-funded financial institution shall, taking the license for financial business, handle the registration of alteration at the department of industry and commerce administration and change the business license. Where the issues or situations as listed in Article 33 of the Regulations happen to a foreign-funded financial institution, and it is needed to change the license for financial business, the foreign-funded financial institution shall make public announcement on the national newspapers designated by the head office of the People's Bank of China and the local newspapers designated by the local branch bank of the People's Bank of China. The public announcements shall be finished within 30 days from the day on which the new business license takes effect. The foreign-funded financial institution shall report the contents of the public announcement in written form to the local branch bank of the People's Bank of China 3 days before the date of the public announcement.
Article 84 The foreign-funded financial institution shall report the following matters to the local branch bank of the People's Bank of China without delay: 1) major problems occurred in the financial status and business operations of the foreign-funded financial institution; 2) major adjustment of business strategies of the foreign-funded financial institution; 3) important resolutions of the board of directors of the foreign-funded institution with legal person status; 4) alteration of the total amount of capital or of the shareholders with more than 10% of the total shares by the foreign-funded institution with legal person status; 5) alteration of the articles of association, registered capital and registered address of the head office of the branch bank of foreign bank and the investor of the foreign-funded institution with legal person status; 6) merger, splitting, and other restructuring, and the alteration of the chairman of board or president (CEO, general manager) of the head office of the branch bank of foreign bank and of the investor of the foreign-funded institution with legal person status; 7) major problems emerging in the financial status and operations of the head office of the branch bank of foreign bank and of the investor of the foreign-funded institution with legal person status; 8) major changes taking place in the laws and regulations on supervision of the registered place of the head office of the branch bank of foreign bank and of the investor of the foreign-funded institution with legal person status; 9) except due to force majeure, the foreign-funded financial institution shall report to the local branch bank of the People's Bank of China 7 days before it suspends its business on a day which is not a legal holiday; 10) other matters as required by the People's Bank of China.
Article 85 A foreign-funded financial institution shall retain the accounting firm accredited by the People's Bank of China to make the annual auditing, and shall submit the auditing report and the management suggestion letter to the local branch bank of the People's Bank of China. The foreign-funded institution with legal person status and the foreign bank which has set up two or more than two branch banks shall also retain the accounting firm accredited by the People's Bank of China to make the combined financial statements auditing of all of its business institutions within China, and shall submit the auditing report and the management suggestion letter to the branch bank of the People's Bank of China of the place where the head office of the foreign-funded institution with legal person status or the principal reporting bank of the foreign bank is located.
Article 86 The People's Bank of China and its branch banks may entrust accounting firms to make the auditing of the operation and financial status of foreign-funded financial institutions when necessary.
Article 87 Where a foreign-funded financial institution operates Renminbi business for the clients not in the place where it is located, it shall report the relevant status of the distant Renminbi business to the branch bank of the People's Bank of China of the place where that foreign-funded financial institution is located in the first workdays of each quarter.
Article 88 For the conversion of the registered capital between Renminbi and foreign currencies, the exchange of profit in Renminbi to foreign exchange for remitting aboard, settlement and sale of foreign exchange, and other matters related to examination and approval of foreign exchange, the ratification of the State Administration of Foreign Exchange and its branch banks shall be necessary.
Article 89 All the relevant matters involving foreign exchange administration of foreign-funded financial institutions shall be handled according to the relevant provisions of the State on foreign exchange administration.
Chapter VI Dissolution and Liquidation
Article 90 The dissolution and liquidation as used in the Regulations shall include the following situations: 1) a foreign-funded institution with legal person status which has been in any of the following situations shall disband itself upon the approval of the People's Bank of China: a. the operating term prescribed by the articles of association expires or other reasons for disbanding prescribed by the articles of association emerge; b. the shareholder meeting or board of directors makes the resolution on disbanding; c. it is needed to disband because of merger or splitting. 2) the People's Bank of China approves foreign banks, solely foreign-funded banks or joint venture banks to close their branch banks within China or order the aforesaid banks to close their branch banks within China; 3) the People's Bank of China cancels the foreign-funded institutions with legal person status; 4) the foreign-funded institutions with legal person status are declared bankrupt according to law.
Article 91 Where a foreign-funded institution applies for disbanding itself, it shall submit the following materials to the local branch bank of the People's Bank of China, and the materials shall, after being examined and approved by the branch bank of the People's Bank of China, be submitted level by level to the head office of the People's Bank of China for examination and approval: 1) the application form signed by the board chairman or president (CEO, general manager); 2) the resolution of the shareholder meeting or board of directors; 3) the confirming letter signed by the board chairmen or presidents (CEOs, general managers) of the investing parties on approval for the disbanding of the institution itself; 4) other materials to be provided as required by the People's Bank of China. The People's Bank of China shall make a decision on whether to approve the application or not within 60 days after receiving the complete application materials.
Article 92 If a foreign bank, a solely foreign-funded bank or a joint venture bank applies for closing its branch bank within China, it shall submit the following materials to the local branch bank of the People's Bank of China, and the materials shall be submitted level by level to the head office of the People's Bank of China after being examined and approved by the local branch bank of the People's Bank of China: 1) application form signed by the board chairman or president (CEO, general manager) of the applicant; 2) the solely foreign-funded bank or joint venture bank shall submit the resolution of the board of directors; 3) the foreign bank shall submit the opinion letter on its application of the authority of financial supervision of the place where it is registered; 4) other materials to be provided as required by the People's Bank of China. The head office of the People's Bank of China shall make a decision on whether to approve its application or not within 60 days after receiving the complete application materials.
Article 93 On the day when the decision of the People's Bank of China to approve the foreign-funded institution with legal person status to disband itself, to approve the foreign bank, solely foreign-funded bank, or joint venture bank to close its branch bank within China or to order it to close its branch bank within China takes effect, the foreign-funded financial institution which has been approved to disband itself, to close or been ordered to close shall stop its business operations immediately, return its license for financial business, and its senior managerial personnel, the board of directors and the general meeting of shareholders of foreign-funded institution with legal person status must stop exercising their powers, and shall form the liquidation group within 15 days.
Article 94 The members of the liquidation group shall include the president (general manager), the accounting director, the registered Chinese accountants and other personnel designated by the People's Bank of China. The liquidation group of foreign-funded institution with legal person status shall also include the representatives of shareholders and the board chairman. The members of the liquidation group shall be reported to the local branch bank of the People's Bank of China for approval.
Article 95 The liquidation group shall notify the department of industry and commerce administration, the department of taxation, the department of labor and social security and other relevant departments in written form.
Article 96 When a foreign-funded institution with legal person status disbands itself, or a solely foreign-funded bank, joint venture bank or foreign bank closes its branch bank within China, the other liquidation matters shall be carried out according to the relevant provisions of the Company Law of the People's Republic of China.
Article 97 The branch bank of the People's Bank of China of the place where the foreign-funded financial institution disbanded or closed is located shall be responsible for the supervision of the process of disbanding and liquidation, and shall report the major matters and the liquidation results to the head office of the People's Bank of China level by level.
Article 98 The liquidation group shall retain the accounting firm accredited by the People's Bank of China to make the auditing within 30 days from the day of its establishment, and shall submit the auditing report to the local branch bank of the People's Bank of China within 60 days from the day of retaining the accounting firm.
Article 99 The foreign-funded financial institution may not transfer or sell its assets without the approval of the local branch bank of the People's Bank of China from the day it submits the application materials for disbanding or closing.
Article 100 Where the matters subject to foreign exchange examination and approval or ratification are involved in the process of disbanding or liquidation, the approval of the State Administration of Foreign Exchange and its branches shall be necessary.
Article 101 The liquidation group shall submit the report on the payment of debts, disposition of assets, collection of loans and cancellation of accounts, etc. to the local branch bank of the People's Bank of China before 10th of each month.
Article 102 After the debts of the liquidated institution have been paid off, and when the liquidation group applies for drawing the interest-earning assets deposited in the form of fixed deposition, it shall submit the following materials to the local branch bank of the People's Bank of China for examination and approval: 1) application form signed by the leader of the liquidation group; 2) report on the liquidation; 3) other materials as required by the People's Bank of China.
Article 103 After the liquidation work is ended, the liquidation group shall make the liquidation report and submit it to the local branch bank of the People's Bank of China for confirmation, and shall submit it to the department of industry and commerce administration to apply for cancellation of registration, and shall make public announcement on the national newspapers designated by the head office of the People's Bank of China and on the local newspapers designated by the local branch bank of the People's Bank of China. The liquidation group shall report the contents of the public announcement in written form to the local branch bank of the People's Bank of China 3 days before the day of public announcement.
Article 104 The accounting files and the business materials after the liquidation shall be disposed of according to the relevant provisions.
Article 105 Within two years ever since the liquidation of the branch of a foreign bank is ended, that foreign bank may not apply for setting up any business institution in the same city again.
Article 106 Where a foreign bank applies for closing its branch bank within China and setting up representative office in the same city, it shall submit the following materials to the local branch bank of the People's Bank of China, and the materials shall be submitted to the head office of the People's Bank of China level by level after being examined and approved by the local branch bank of the People's Bank of China: 1) application form signed by the board chairman or president (CEO, general manager) of the applicant; 2) authorization letter to the chief representative signed by the signer authorized by the foreign bank; 3) resume of the chief representative to take the post; 4) copies of the identification certification, education background of the chief representative to take the post; 5) the presentation on whether there is bad record signed by the chief representative to take the post; 6) other materials as required by the People's Bank of China.
Article 107 Where a foreign-funded institution with legal person status operates in violation of laws and regulations, or operates and manages poorly, and may seriously harm the financial order and damage the public interests, the People's Bank of China shall cancel it according to the Regulations on Cancellation of Financial Institutions. Where the People's Bank of China orders the close of the branch bank of a foreign bank, it shall implement that according to the relevant provisions of the Company Law of the People's Republic of China.
Article 108 Where a foreign-funded institution with legal person status is liquidated because of disbanding, and if the liquidation group finds that the property of the foreign-funded institution with legal person status is not enough to pay the debts after clearing the property and drawing on the balance sheet and property list, it shall apply to the people's court for bankruptcy upon the approval of the People's Bank of China. After the foreign-funded institution with legal person status is declared bankrupt as ruled by the people's court, the liquidation group shall transfer the liquidation matters to the people's court.
Article 109 Where a foreign-funded financial institution applies for restarting its business according to Article 39 of the Regulations, it shall submit the following materials to the local branch bank of the People's Bank of China, and the materials shall be submitted to the head office of the People's Bank of China for examination and approval after being examined and approved by the local branch bank of the People's Bank of China: 1) application form signed by the board chairman or president (CEO, general manager); 2) resolution of the board of directors; 3) other materials to be provided as required by the People's Bank of China.
Chapter VII Supplementary Provisions
Article 110 The measures of the People's Bank of China on the administration of the solely foreign-funded banks, joint venture banks and their branch banks within China shall be carried out in reference to the relevant provisions on the branches of foreign banks.
Article 111 The measures for the administration of the branches of a foreign-funded financial institution in the same city shall be formulated by the People's Bank of China separately.
Article 112 Where any foreign-funded financial institution violates these Rules, it shall be punished by the People's Bank of China according to the Regulations and other relevant provisions.
Article 113 These Rules shall be enter into force as of Feberuary 1, 2002. From the day of the implementation of these Rules, the Detailed Rules on the Implementation of the Regulations on the Administration of Foreign-funded Financial Institution of the People's Republic of China promulgated on April 30, 1996, the Provisional Measures for the Establishment of Branch Banks of Foreign-funded Banks in China promulgated on January 4, 1996, the Provisional Measures for the Administration of the Pilot Spots of Renminbi Business of Foreign-funded Financial Institutions in Shanghai Pudong promulgated on December 2, 1996, the Interim Provisions on the Administration of the Post Qualification of Middle-level and Senior Managerial Personnel of Foreign-funded Financial Institution promulgated on May 15, 1997 and the Operation Guidance for Foreign Banks to Cancel Business Branches in China promulgated on April 21, 1999 by the People's Bank of China shall be abolished simultaneously.
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