Banking & Finance

Finally crossing the bridge
Taiwan banks have entered a new era with the amended cross-strait banking rules allowing them to set up branches in China and directly make equity investments in Chinese banks. Future prospects appear even brighter since the signing of the ECFA, as further relaxations of cross-strait restriction are expected by the Taiwanese banking community

Ministry of Housing and Urban-rural Development, People’s Bank of China and China Banking Regulatory Commission, Circular on Specifying the Criteria for Defining the Second Unit of Residential Premises for Commercial Personal Residential Mortgage Loan Purposes [Legislation Digest]
住房和城乡建设部 、中国人民银行 、中国银行业监督管理委员会关于规范商业性个人住房贷款中第二套住房认定标准的通知
Stringent definition of the second unit of residential premises.

State Council, Approval and Transmission of the «National Development and Reform Commission, Circular on the Opinion on the Major Work on Deepening the Reform of the Economic System in Year 2010» [Legislation Digest]
国务院批转发展改革委关于2010年深化经济体制改革重点工作意见的通知
China seeks to levy property taxes.

State Council, Several Opinions on Encouraging and Guiding the Healthy Development of Investments from the Private Sector [Legislation Digest]
国务院关于鼓励和引导民间投资健康发展的若干意见
Private sector investments allowed in commercial bank equity investment.

Ministry of Finance, General Administration of Customs and State Administration of Taxation, Circular on Launching the Pilot Project for Export Tax Rebate for Vessels under Lease Financing in the Tianjin Municipality [Legislation Digest]
财政部、海关总署、国家税务总局关于在天津市开展融资租赁船舶出口退税试点的通知
Tianjin exempts tax on sale of vessels to foreign lessees.

China Banking Regulatory Commission, Measures for the Administration of Pilot Projects for the Investment by Commercial Banks in the Equity of Insurance Companies [Legislation Digest]
中国银行业监督管理委员会商业银行投资保险公司股权试点管理办法
CBRC sets out certeria criteria for a commercial bank to take an equity interest in an insurance company.

Measures for the Administration of Pilot Projects for the Investment by Commercial Banks in the Equity of Insurance Companies [Full Text Translation]
商业银行投资保险公司股权试点管理办法
The Measures set forth the criteria for a commercial bank to take an equity interest in an insurance company and specify the requirements on different aspects of risk management.

China Banking Regulatory Commission, Guidelines on Information Disclosure in Connection with the Capital Adequacy Ratio of Commercial Banks [Legislation Digest]
中国银行业监督管理委员会商业银行资本充足率信息披露指引
CBRC requires banks to disclose capital adequacy ratio in line with Basel requirements.

Margin trading ready at last
For years, mainland China has been preparing for margin trading and short sale of securities. With the securities regulator’s promulgation of a new guiding opinion, those preparations appear finally to be complete

China Banking Regulatory Commission, Guidelines on the Monitoring Inspection of the Capital Adequacy Ratio of Commercial Banks [Legislation Digest]
中国银行业监督管理委员会商业银行资本充足率监督检查指引
Banks’ capital adequacy should be compatible with their risk exposure.

China Banking Regulatory Commission, Guidelines for Measuring the Regulatory Capital in Connection with Risk Exposure in Asset Securitisation of Commercial Banks [Legislation Digest]
中国银行业监督管理委员会商业银行资产证券化风险暴露监管资本计量指引
Banks required to conduct due diligence investigation on the underlying assets of securitisation.

Chinese counterparties challenge collateral

China Banking Regulatory Commission, Guidelines for the Management of Interest Rate Risk in the Banking Book of Commercial Banks [Legislation Digest]
中国银行业监督管理委员会商业银行银行账户利率风险管理指引
Banks told to better assess potential interest rate risk.

Shanghai Municipality, Trial Measures for the Examination, Approval and Registration of Debt-for-equity Swaps of Foreign-invested Enterprises [Full Text Translation]
上海市外商投资企业债权转股权审批登记试行办法
Shanghai allows debt-for-equity swaps by foreign-invested enterprises, which require the unanimous consent of all the shareholders of the investee enterprises.

Shanghai Municipality, Trial Measures for the Examination, Approval and Registration of Debt-for-equity Swaps of Foreign-invested Enterprises [Legislation Digest]
上海市外商投资企业债权转股权审批登记试行办法
Shanghai allows debt-for-equity swaps by foreign-invested enterprises.

Beijing opens up to foreign private equity fund managers
Beijing has responded to Shanghai’s recent relaxation of rules in Pudong by issuing measures to allow foreign private equity fund managers to set up shop

Taking security in China
Taking security over assets in China can be challenging, not least due to the various approval and registration requirements for foreign investors