CBRC Tightens Regulation on Ownership Structure of Commercial Banks

CBRC Tightens Regulation on Ownership Structure of Commercial Banks

Xu Wei

Date: Fri, 11/17/2017 - 11:54 / source:Yicai
CBRC Tightens Regulation on Ownership Structure of Commercial Banks
CBRC Tightens Regulation on Ownership Structure of Commercial Banks

(Yicai Global) Nov. 17 -- China Banking Regulatory Commission (CBRC) issued a draft copy of ‘Interim Measures for the Administration of Commercial Banks’ Equities’ on its website yesterday, and solicited public opinion and comments on the document. Under the draft arrangements, an individual investor and his/her associated parties and persons acting in concert may only buy into stocks of no more than two banks as a major shareholder, or may control no more than one commercial bank.

In the case investors and their parties concerned and persons acting in concert -- separately or jointly, hold over 5 percent of a commercial bank’ shares for the first time or accumulatively, they shall report to the CBRC or its agencies for approval. The administrative license for securities markets both at home and abroad that plan to hold over 5 percent of a commercial bank’s total shares shall be effective for six months, per these interim measures.

Investors and their associated parties and persons acting in concert who, separately or jointly, hold less than 5 percent of the total share of a commercial bank but are within the top 10 shareholders of this commercial bank, shall report to CBRC or its agencies for recordation within five working days. Other shareholders who hold over 1 percent but under 5 percent of a commercial bank’s shares, shall report to the CBRC or its agencies within 10 working days, and the shareholdings of a shareholder and his or her associated parties and persons acting in concert shall be consolidated, per the document.

Shareholders shall buy into commercial banks with their own funds that come from legal sources, and shall not buy into these banks with non-self-owned funds including entrusted funds and debt funds, unless otherwise stated in laws and regulations. Shareholders shall not entrust others for holding shares of commercial banks, or shall not be entrusted with shares, said the document.

In the case that banking financial institutions found, buy into, acquire, or reorganize commercial banks in line with CBRC’s regulations, and that investors merge into or reorganize commercial banks with high risks upon the approval of CBRC, they shall not be subject to the above regulations, but shall be subject to this document.

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Keywords: CBRC, shareholder