Detailed Rules for the Implementation of the Regulations of the People’s Republic of China on the Administration of Foreign-invested Banks (8)
Source: CBRC View: 501 Date: 2011-05-16

Chapter VI Termination and Liquidation

Article 110 The phrase "terminate… by itself" as mentioned in Article 58 of the Regulations refers to:
(1) The business term as provided for in the articles of association of the solely foreign-invested bank or of the Chinese-foreign equity joint bank expires, or any other dissolution cause as described in the articles of association occurs;
(2) The general meeting of shareholders or the board of directors of a solely foreign-invested bank or Chinese-foreign equity joint bank makes a resolution of dissolution;
(3) It is necessary for the solely foreign-invested bank or Chinese-foreign equity joint bank to dissolve wing to merger or split-up; or
(4) The foreign bank, solely foreign-invested bank or Chinese-foreign equity joint bank closes up any branch within the territory of China.

Article 111 A solely foreign-invested bank or Chinese-foreign equity joint bank shall submit the following application materials (in duplicate) to the local banking regulatory bureau when a solely foreign-invested bank or Chinese-foreign equity joint bank applies for dissolution on its own initiative, and a copy shall be sent to the local institution dispatched by the CBRC simultaneously:
(1) An application signed by the chairman of the board of directors (chief executive officer or general manager) and addressed to the Chairman of the CBRC;
(2) A resolution of the general meeting of shareholders or of the board of directors;
(3) A letter of confirmation of the agreement of this institution’s dissolution on its own initiative, which is signed by the chairman of the board of directors or president (chief executive officer or general manager) of each shareholder; and
(4) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application opinions along with its examination opinions within 20 days after it receives a complete set of application materials.
The CBRC shall make a decision of approval or disapproval of the dissolution and present a written notice to the applicant within 3 months after it receives a complete set of the application materials. It shall make an explanation if it makes a decision of disapproval.

Article 112 A foreign bank, solely foreign-invested bank or Chinese-foreign equity joint bank shall submit the following application materials (in duplicate) to the local banking bureau when it applies for closing up any branch within the territory of China, and a copy shall be simultaneously sent to the banking regulatory bureau of the place where the solely foreign-invested bank or Chinese-foreign equity joint bank is located and to the institution dispatched by the CBRC to the place where branch is located:
(1) An application signed by the chairman of the board of directors (chief executive officer or general manager) and addressed to the Chairman of the CBRC;
(2) A resolution made by the general meeting of shareholders or of the board of directors of the solely foreign-invested bank or Chinese-foreign equity joint bank;
(3) The opinions of the financial regulatory authority of the country or region where the foreign bank is located about its application; and
(4) Other materials as requested by the CBRC.
The banking regulatory bureau of the place where the branch is located shall, submit to the CBRC the application opinions along with its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the dissolution within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.

Article 113 From the day when the CBRC’s decision to approve a solely foreign-invested bank or Chinese-foreign equity joint bank to dissolve on its initiative or approves a foreign bank, solely foreign-invested bank or Chinese-foreign equity joint bank to close down its branch within the territory of China, becomes effective, the institution approved to dissolve on its initiative or to close down shall stop its business operations at the same time, shall hand back its financial business permit, and form a liquidation group within 15 days.

Article 114 The president (general manger), chief accountant, a Chinese certified public account, and other persons designated by the CBRC shall be include in the members of the liquidation group The representative and chairman of the board of directors of each shareholder shall be included in the liquidation group of a solely foreign-invested bank or Chinese-foreign equity joint bank. The members of the liquidation group shall be subject to the consent of the institution dispatched by the CBRC.

Article 115 The liquidation group shall present a written notice to the administrative department for industry and commerce, tax organ, labor and social security department, and other relevant departments.

Article 116 Other liquidation affairs in relation to a solely foreign-invested bank or Chinese-foreign equity joint bank to dissolve on its own initiative, or in respect of a solely foreign-invested bank or Chinese-foreign equity joint bank or foreign bank to close down its branch within the territory of China shall be dealt with in accordance with the relevant provisions of the Company Law of the People’s Republic of China.

Article 117 The institution dispatched by the CBRC to the place where the business institution of a foreign-invested bank or its branch is dissolved or closed down shall be responsible for supervising the dissolution and liquidation courses and report the important matters and the liquidation result to the CBRC level by level.

Article 118 The liquidation group shall, hire a qualified accounting firm lawfully established within the territory of China, conduct an audit within 30 days from the date of formation, and shall submit an audit report to the local institution dispatched by the CBRC within 60 days from the day when it hires the said accounting firm.

Article 119 The foreign exchange examination and approval items involved during the process of dissolution or closedown shall be subject to the approval of the State Administration of Foreign Exchange and its branch.

Article 120 The liquidation group shall, in the course of settling debts, give priority to the payment of the principal and interests of personal savings after it has paid off the liquidation fees, wages and labor insurance premiums owed to the employees.

Article 121 The liquidation group shall, not later than the tenth date of each month, submit a report on the settlement of debts, disposal of assets, repayment of loans, cancellation of credit accounts to the local institution dispatched by the CBRC etc.

Article 122 The liquidation group shall submit the following application materials to the local institution dispatched by the CBRC for examination and approval when it applies for drawing the interest-earning assets after the institution liquidated has settled all the debts:
(1) An application bearing the signature of the head of the liquidation group;
(2) A liquidation report; and
(3) Other materials as requested by the CBRC.

Article 123 The liquidation group shall make a liquidation report after the liquidation is completed. It shall submit the report to the local institution dispatched by the CBRC for confirmation and to the administrative department for industry and commercial so as to apply for deregistration of industry and commerce, and shall make an announcement on a national newspaper designated by the CBRC and on a local newspaper designated by the local institution dispatched by the CBRC. A report shall be submitted to the local institution dispatched by the CBRC in written form about the contents of the announcement by the liquidation group

Article 124 After the liquidation, the accounting archives and business materials shall be dealt with in accordance with the relevant provisions.

Article 125 Within 2 years after the end of the liquidation of a branch of a foreign bank, neither the CBRC nor its dispatched institution may accept any application of this foreign bank for the establishing a business institution in the same city within the territory of China.

Article 126 If a foreign bank applies for closing down any branch within the territory of China and applies for establishing a representative office in the same city, it shall submit the following application materials (in duplicate) to the local banking regulatory bureau and a copy shall be simultaneously sent to the institution dispatched by the CBRC:
(1) An application signed by the chairman of the board of directors or president (chief executive officer or general manager) and addressed to the Chairman of the CBRC;
(2) An authorization to the candidate chief representative, which is signed by the person authorized by the foreign bank;
(3) A resume of the candidate chief representative;
(4) Copies of the identity card and the academic credentials of the candidate chief representative;
(5) A formal announcement of having no bad record, which is signed by the candidate chief representative; and
(6) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials and its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall determine whether to approve the closedown of the branch and the establishment of a representative office in the same city within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.

Article 127 Where a solely foreign-funded bank or Chinese-foreign equity joint bank is under such circumstances as running its business illegally and managing its business operations poorly so that it poses a serious threat to the order of the financial market or to the interests of the general public if it is not revoked, the CBRC shall revoke it under the Regulations on Closure of Financial Institutions.
To order the closedown of any branch of a foreign bank, the CBRC shall abide by the relevant provisions of the Company Law of the People’s Republic of China.

Article 128 Where a solely foreign-invested bank or Chinese-foreign equity joint bank is liquidated due to dissolution, it shall immediately apply to the people’s court for bankruptcy upon approval of the CBRC if the liquidation group finds that the properties of the solely foreign-invested bank or of the Chinese-foreign equity joint bank are not enough to pay off the debts after it clears up the properties and works out an asset-liability statement and a checklist of properties. The liquidation group shall hand over the liquidation affairs to the people’s court after the solely foreign-invested bank or Chinese-foreign equity joint bank is ruled by the people’s court to be insolvent.

Article 129 It shall submit the following application materials (in duplicate) to the local banking regulatory bureau when any business institution of a foreign-invested bank applies for resuming business in accordance with Article 59 of the Regulations, and a copy shall be sent to the local institution dispatched by the CBRC simultaneously:
(1) An application signed by the chairman of the board of directors or president (chief executive officer, general manager) of the applicant and addressed to the Chairman of the CBRC;
(2) The resolution of the board of directors of the solely foreign-invested bank or of the Chinese-foreign equity joint bank; and
(3) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials and its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of resuming business within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. It shall make an explanation if it makes a decision of disapproval.

Article 130 If a foreign bank changes any branch within the territory of China into a solely foreign-funded bank solely invested by its headquarters, the original branch of the foreign bank shall hand back the financial business permit after the said solely foreign-invested bank starts business and go through the deregistration procedures in the administrative organ for industry and commerce in accordance with the law.

Article 131 A foreign bank shall, after it applies for closing down its representative office within the territory of China, submit the following applications materials (in duplicate) to the local banking regulatory bureau and a copy shall be sent to the local institution dispatched by the CBRC simultaneously:
(1) An application signed by the chairman of the board of directors or president (chief executive officer or general manager) of the foreign bank and addressed to the Chairman of the CBRC; and
(2) Other materials as requested by the CBRC.
The local banking regulatory bureau shall submit to the CBRC the application materials and its examination opinions within 20 days after it receives a complete set of the application materials.
The CBRC shall make a decision of approval or disapproval of the closedown within 3 months after it receives a complete set of the application materials, and present a written notice to the applicant. If it makes a decision of disapproval, it shall make an explanation.

Article 132 A representative office closed down upon approval shall make an announcement on a national newspaper designated by the CBRC and on a local newspaper designated by the local institution dispatched by the CBRC within 15 days after it goes through the deregistration procedures, and shall report the contents of the announcement to local institution dispatched by the CBRC.


 

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