Regulations to Change for Foreign Financiers

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Last updated at: (Beijing Time) Monday, December 31, 2001

Regulations to Change for Foreign Financiers

To come into effect on February 1, 2002

The new Rules on the Regulation of Foreign-Funded Financial Institutions that were published on Sunday have incorporated China's commitments to the World Trade Organization, the People's Bank of China spokesman said.

The new regulations, published by the State Council, will come into effect on February 1, 2002. The old rules with the same title, promulgated in 1994, will become history on the same day.

Two new-added provisions

The new regulations will require foreign-funded banks and finance companies to meet the internationally accepted capital adequacy ratio of 8 per cent.

Overseas financial institutions applying to operate in China will need to submit a reference from the financial authorities of their home country.

These two provisions are both absent in the old set of rules.

Comparison

The new rules will govern foreign financial institutions' operations of both foreign and local currencies. Previously, there was an additional regulation on their renminbi business because the service was conducted on a trial basis.

But the central bank's spokesman said that, as China has promised to officially open the local currency business gradually to all foreign banks within five years, the regulations should put business involving foreign and local currencies under one umbrella.

The new rules will also unify the application procedures for domestic and foreign banks planning to set up new operational establishments. Under the current rules, the procedures for foreign and domestic applicants are different.

China Issues Governing Regulations for Overseas Financial Institutions

China's State Council issued a new set of governing regulations for overseas financial institutions Saturday.

The regulations provide systematic explanations and requirements regarding the registration, business scope, supervision, liquidation and liabilities for overseas financial institutions. full text

'Timetable' Set for Lifting Restrictions on Foreign-Funded Banks

China will gradually lift regional restriction on foreign-funded banks in handling Renminbi (People's Currency) business:

When joining the WTO, China will open Shenzhen, Shanghai, Dalian ;and Tianjin;

In one year after WTO entry, it will open Guangzhou, Zhuhai, Qingdao, Nanjing and Wuhan;

In two years after WTO entry, it will open Jinan, Fuzhou, Chengdu and Chongqing;

In three years after WTO entry,it will open Kunming,Beijing and Xiamen;

In four years after WTO entry, it will open Shantou, Ningbo, Shenyang and Xi'an;

In five years after WTO entry, it will lift all regional restrictions. full text

Chinese version of the current Regulation of Foreign-Funded Financial Institutions (1994)

Five Commitments on Foreign Financial Institutions' Entry into China

Foreign Financial Institutions Step Up Investment in Shanghai

China to Allow Renminbi Business for Overseas Banks in Shanghai, Shenzhen