Detailed Rules for the Implementation of the Regulations of the People’s Republic of China on the Administration of Foreign-invested Banks (3)
Source: CBRC View: 405 Date: 2011-05-16

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.

 

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