中华人民共和国外资金融机构管理条例 PRC Administration of Foreign-funded Financial Institutions Regulations

China shall carry out a preliminary examination on the application for establishing a foreign-funded financial institution, and shall render a decision on whether to accept the application within six months of the date of receipt of a complete set of application documents. In the case of a decision to accept, it shall issue an official application form to the applicant. In the case of a decision to deny, it shall notify the applicant in writing and state the reasons.

　　In special circumstances where the People's Bank of China fails to complete preliminary examination and render a decision on whether to accept the application within the time period stipulated in the preceding paragraph, it may extend the time period and notify the applicant. However, the extension of the time period may not exceed three months.

　　Article 14　An applicant shall, within six months of the date of receipt of an official application form, complete preparations for establishment. Where it fails to complete the preparations for establishment within the stipulated time period and there are legitimate reasons, the time period may be extended for three months with the approval of the People's Bank of China. Where it still fails to complete the preparations for establishment within the extended period, the decision of the People's Bank of China to accept shall automatically become void. After the completion of preparations for establishment, the applicant shall submit to the People's Bank of China the duly completed application form together with the following documents for examination and approval:

　　1. a list and résumés of the key persons in charge of the foreign-funded financial institution to be established;

　　2. the powers of attorney for the persons in charge that are to take up key positions at such foreign-funded financial institution;

　　3. proof of capital verification issued by a statutory capital verification institution;

　　4. information on the security and precautionary measures and other facilities related to business;

　　5. where a Foreign Bank Branch is to be established, a liability guarantee by its head office for th

e tax and debt liability of such branch; and

　　6. other documents required for submission by the People's Bank of China.

　　Article 15　The People's Bank of China shall, within two months of the date of receipt of a complete set of formal application documents from the foreign-funded financial institutions to be established, make a decision on whether to approve. In the case of a decision to approve, it shall grant a permit to conduct financial business. In the case of a decision to disapprove, it shall notify the applicant in writing and state the reasons.

　　Article 16　After the establishment of the foreign-funded financial institution is approved, the applicant shall register with the administration authorities for industry and commerce on the strength of the permit to conduct financial business and obtain a business permit.

　　PART THREE　SCOPE OF BUSINESS

　　Article 17　A Wholly Foreign-owned Bank, a Foreign Bank Branch or a Joint Venture Bank may operate part or all of the following types of business in line with the business scope approved by the People's Bank of China in accordance with the law:

　　1. taking deposits from the public;

　　2. granting short-term, medium-term and long-term loans;

　　3. handling the acceptance and discounting of negotiable instruments;

　　4. buying and selling government bonds, financial bonds and negotiable securities denominated in foreign currency other than shares;

　　5. providing letter of credit services and guarantees;

　　6. handling settlements for the domestic and foreign markets;

　　7. buying and selling foreign exchange, and acting as an agent for the purchase and sale of foreign exchange;

　　8. engaging in foreign exchange conversion;

　　9. engaging in interbank lending;

　　10. engaging in bank card business;

　　11. providing safe deposit box services;

　　12. providing creditworthiness investigations and consultancy services; and

　　13. other business approved by the People's Bank of China.

　　Article 18　A Wholly Foreign-owned Finance Company or Joint Venture Finance Company may operate part or all of the following types of business in line with the business scope approved by the People's Bank of China in accordance with the law:

　　1. taking deposits of freely convertible currencies with each deposit being no less than Rmb 1 million and having a term of no less than three months;

　　2. granting short-term, medium-term and long-term loans;

　　3. handling the acceptance and discounting of negotiable instruments;

　　4. buying and selling government bonds, financial bonds and negotiable securities denominated in foreign currency other than shares;

　　5. providing guarantees;

　　6. buying and selling foreign exchange, and acting as an agent for the purchase and sale of foreign exchange;

　　7. engaging in interbank lending;

　　8. providing creditworthiness investigations and consultancy services;

　　9. providing foreign exchange trust services; and

　　10. other business approved by the People's Bank of China.

　　Article 19　The geographical restriction and client limitation of the Renminbi business of foreign-funded financial institutions shall be set out by the People's Bank of China in accordance with the relevant provisions.

　　Article 20　To engage in a Renminbi business, foreign-funded financial institutions shall possess the following requirements:

　　1. it has been in business operation in China for over three years prior to the application;

　　2. it has been in profits for two consecutive years prior to the application; and

　　3. other prudential conditions stipulated by the People's Bank of China.

　　Article 21　Before a foreign-funded financial institution opens a new type of business within the business scope approved by the People's Ban

k of China, it shall submit an application in writing to the People's Bank of China. The People's Bank of China shall, within 60 days of the date of receipt of written application documents, render a decision on whether to approve the application. Where the People's Bank of China decide to deny, it shall notify the applicant in writing and state the reasons.

　　PART FOUR　SUPERVISION AND ADMINISTRATION

　　Article 22　The deposit and lending interest rates as well as handling charge rates of foreign-funded financial institutions shall be determined by foreign-funded financial institutions in accordance with the relevant regulations of the People's Bank of China.

　　Article 23　A foreign-funded financial institution engaging in deposit business must place a deposit reserve with a local branch office of the People's Bank of China at the place where it is located. The ratio of such deposit reserve shall be determined and adjusted according to the needs by the People's Bank of China.

　　Article 24　30% of the operating capital of a Foreign Bank Branch must exist in the form of interest-generating assets designated by the People's Bank of China. Such interest-generating assets shall include deposits at a bank designated by the People's Bank of China.

　　Article 25　The capital adequacy ratio of a Wholly Foreign-owned Bank, Joint Venture Bank, Wholly Foreign-owned Finance Company or Joint Venture Finance Company shall not be less than 8%.

　　Article 26　The credit amount to an enterprise and its affiliated enterprises by a Wholly Foreign-owned Bank, Joint Venture Bank, Wholly Foreign-owned Finance Company or Joint Venture Finance Company shall not exceed 25% of its capital, except for that specially approved by the People's Bank of China.

　　Article 27　The fixed assets of a Wholly Foreign-owned Bank, Joint Venture Bank, Wholly Foreign-owned Finance Company or Joint Venture Finance Company shall not exceed 40% of its owner's equity.

　　Article 28　The Renminbi proportion of the capital and the risk assets of a Wholly Foreign-owned Bank, Joint Venture Bank, Wholly Foreign-owned Finance Company or Joint Venture Finance Company shall not be less than 8%.

　　The ratio of the Renminbi proportion of the sum of the operating capital and reserve of a Foreign Bank Branch to that of its risk assets shall not be less than 8%.

　　The People's Bank of China shall adjust the ratio stipulated in the previous two paragraphs in accordance with the relevant provisions progressively.

　　Article 29　Foreign-funded financial institutions shall ensure the liquidity of their assets. The ratio of the liquid asset balance to the liquid liabilities balance shall not be less than 25%.

　　Article 30　The total amount of foreign exchange deposits taken up in China by a foreign-funded financial institution shall not exceed 70% of its total foreign exchange assets in China.

　　The People's Bank of China shall adjust the ratio stipulated in the preceding paragraph in accordance with the relevant provisions progressively.

　　Article 31　Foreign-funded financial institutions must calculate and set reserves for idle (bad) debts in accordance with regulations.

　　Article 32　A foreign-funded financial institution shall employ certified accountants in China that are also approved by a branch of the People's Bank of China at the place where it is located.

　　Article 33　A foreign-funded financial institution must obtain approval of the People's Bank of China and handle relevant registration with the adminis

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