CBIRC Releases the Decision on Amending Some Administrative Licensing Rules and Responds to Media Questions
The China Banking and Insurance Regulatory Commission (CBIRC) recently released the Decision of China Banking and Insurance Regulatory Commission on Amending Some Administrative Licensing Rules (hereinafter referred to as the "Decision"). The Decision amends the relevant provisions of the Implementation Rules of China Banking and Insurance Regulatory Commission on Administrative Licensing Matters of Chinese Commercial Banks, the Implementation Rules of China Banking and Insurance Regulatory Commission on Administrative Licensing Matters of Small and Medium-sized Rural Banking Institutions, and the Implementation Rules of China Banking and Insurance Regulatory Commission on Administrative Licensing Matters of Foreign-funded Banks. The major amendments include: reducing the scope of bank senior executives required for eligibility approval, optimizing relevant qualification criteria, improving the approval scope and mechanism of bond issuance by banks, and amending some provisions in accordance with the principle of same treatment for Chinese and foreign institutions.
The Decision shall come into force on October 8, 2022. CBIRC officials answered media questions concerning the Decision.
I. What is the background of the issuance of the Decision?
Answer: The Decision was drafted by the CBIRC in an effort to continuously promote the reform of streamlining administration and delegating power, optimize the market entry procedures in the banking sector, and build up a market entry system with rules consistently applied to both Chinese and overseas insitutions.
II. What amendments have been made in the Decision to the examination and approval of the qualifications of senior executives of banking institutions?
Answer: In order to reinforce the requirements of streamlining administration and delegating power, and strengthen the main responsibilities of banking institutions, the Decision further downsizes the scope of eligibility approval, canceling the eligibility approval requirements on the heads of internal audit departments and financial departments of Chinese commercial banks, the heads of management sub-branches and branches of specialized institutions of Chinese commercial banks, the heads of internal audit departments, financial departments and compliance departments of small and medium-sized rural banks, and the heads of compliance departments of rural credit cooperatives at the province (autonomous region) level, and the eligibility approval procedures are changed to reporting to competent authorities. In the next step, the regulatory authorities will strengthen the on-going and ex post supervision over the selection and appointment of executives by banking institutions and the performance of relevant personnel, so as to improve the quality and efficiency of supervision.
III. What amendments have been made to the examination and approval of bond issuance by banks in the Decision?
Answer: First, the administrative licensing requirement for offering and issuance of non-capital bonds has been cancelled and changed to reporting to the CBIRC or its local provincial offices within 10 days after the issuance. Second, the mechanism for the shelf offering of capital bonds has been clarified. The issuing banks may decide on their own the type of instruments, the timing of issuance, the batches and scale of the bond issuance within the approved amount, and they shall complete the issuance within 24 months after approval.
IV. How was the public consultation process for the Decision?
Answer: During the public consultation period of the Decision, banking institutions, banking practitioners, experts and scholars put forward relevant opinions and suggestion, mainly focusing on the examination and approval requirements on the scope and eligibility of senior executives, the shelf offering and issuance mechanism of capital bonds, etc. We have carefully studied these feedbacks, adopted the opinions and suggestion that are in line with the actual supervisory situations and help to improve the standardization of administrative licensing, and made corresponding amendments to the Decision. With regard to suggestion such as modifying senior executives’ eligibility criteria and defining the influence period of negative circumstances, the CBIRC will take such suggestion into full consideration in coordination with other regulatory provisions, conduct further feasibility study, and improve relevant provisions as appropriate going forward.
Appendix: Decision of China Banking and Insurance Regulatory Commission on Amending Some Administrative Licensing Rules
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