Dec 27, 2019 (China Knowledge) - The China Banking and Insurance Regulatory Commission (CBIRC) has announced new revisions of regulations to increase access of overseas financial institutions into China’s financial markets.
Under the revision, overseas financial institutions will no longer be subjected to a minimum asset requirement and will be allowed to expand their operations to cover more commercial services. Previously, overseas banks were required to register at least USD 20 bln in assets in order to be granted permission to set up respective branches in mainland China. Overseas banks were also prohibited to underwrite local bonds in China, and require a full year of waiting period in order to provide currency-related services under the original rules.
In addition, with the new regulations, cross-border yuan will also be subjected to less restrictions. Services such as bond issuance, M&A and IPO underwriting will be allowed to be carried out. However, overseas banks need to report annual duties and other relevant details by Q1 each year.
According to CBIRC, China aims to stimulate its economy and attract more foreign investments into the country with the amended regulations. In addition, the increase access of foreign banks will also help to promote the competitiveness within the banking industry in China.
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