Circular of the China Banking Regulatory Commission on Issues Concerning Banking Supervision in the China (Shanghai) Pilot Free Trade Zone
The English version is for reference only. If there is any inconsistency or conflict between the English and Chinese version, the Chinese version shall prevail.
No. 40  of the China Banking Regulatory Commission
All local offices of the China Banking Regulatory Commission (“CBRC”); all policy banks, State-owned commercial banks, joint-stock commercial banks, and financial asset management companies; Postal Savings Bank of China; and trust companies, enterprise group finance companies, and financial leasing companies directly under the supervision of the CBRC:
According to the decision of the Central Committee of the Communist Party of China and the State Council on building the China (Shanghai) Pilot Free Trade Zone, you are hereby notified of the following issues concerning banking supervision in the FTZ with the consent of the State Council:
I. Supporting the development of Chinese-invested banks in the FTZ. National Chinese-invested commercial banks, policy banks, and local banks in Shanghai are allowed to establish new branches or specialized institutions in the FTZ. The existing bank outlets in the FTZ are allowed to be upgraded to branches or sub-branches. Bank branch offices newly established or upgraded in the FTZ are not subject to the annual plan for new outlets.
II. Supporting the establishment of non-banking financial companies in the FTZ. Qualified large enterprise groups shall be supported in establishing enterprise group finance companies in the FTZ; qualified promoters shall be supported in applying for the establishment of auto finance companies and consumer finance companies in the FTZ; trust companies in Shanghai shall be supported in relocation to the FTZ for development; national financial asset management companies shall be supported in establishing branch companies in the FTZ; and financial leasing companies shall be supported in establishing specialized subsidiary companies in the FTZ.
III. Supporting the operations of foreign-invested banks in the FTZ. Qualified foreign-invested banks are allowed to establish subsidiary banks, branches, specialized institutions, and Chinese-Foreign joint venture banks in the FTZ. The sub-branches of foreign-invested banks in the FTZ are allowed to be upgraded to branches. Research shall be conducted to appropriately reduce the number of years required for foreign-invested banks’ representative offices in the FTZ to be upgraded to branches and for branches of foreign-invested banks to engage in RMB business.
IV. Supporting the access of private capital to the banking sector in the FTZ. Qualified private capital shall be supported in establishing private banks, financial leasing companies, consumer finance companies, and other financial institutions in the FTZ at their own risk. Qualified private capital shall be supported in establishing Chinese-Foreign joint venture banks in the FTZ as non-controlling shareholders with Chinese and foreign-invested financial institutions.
V. Encouraging the provision of cross-border investment and financing services. Banking financial institutions in the FTZ shall be supported in developing cross-border financing services, including but not limited to bulk commodity trade financing, whole supply chain trade financing, offshore ship financing, financial support for modern service industry, offshore warranty for onshore loans, and commercial papers. Banking financial institutions in the FTZ shall be supported in promoting cross-border investment financial services, including but not limited to cross-border acquisition and merger loans and project loans, onshore warranty for offshore loans, cross-border asset management and wealth management business, and real estate investment trusts.
VI. Supporting the development of offshore business in the FTZ. Qualified Chinese-invested banks are allowed to conduct offshore banking business in the FTZ.
VII. Simplifying access modes. Access issues concerning banking institutions, senior executives, and certain services below the branch level in the FTZ shall be subject to ex post reporting instead of ex ante approval. A fast-track green channel for access issues of the banking sector in the FTZ shall be established, and rules on time limits for handling access issues shall be developed to improve access efficiency.
VIII. Improving the regulatory service system. The exploration and establishment of a relatively independent regulatory system meeting the reality of the banking sector in the FTZ shall be supported, and regulatory services close to the market shall be provided to effectively prevent and control risks. A distinctive monitoring statements system for the banking sector in the FTZ shall be established and improved, and monitoring indicators adapted to the risk characteristics of the banking sector in the FTZ shall be explored and improved. The calculation standards and regulatory requirements for the loan-to-deposit ratio, liquidity, and other indicators shall be optimized and adjusted.
Saturday, September 28, 2013
(This Circular shall be issued to foreign-invested legal person banking financial institution, foreign bank branches, and banking financial institutions in Shanghai)
Provided by Lawyers Working Committee of Pudong New Area