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06 April 2018
On January 5 2018 the China Banking Regulatory Commission (CBRC) issued its Interim Measures for the Equity Management of Commercial Banks (CBRC  1), which came into effect on the same date. The measures have tightened the CBRC's regulation of the information disclosure and reporting requirements imposed on material shareholders that have a significant impact on the operation and management of commercial banks established in China.
In February 2018 the CBRC issued two supporting documents in order to implement the measures:
The CBRC's measures were issued in the wake of the State Council's policies on preventing and controlling financial risks and closing the supervision gaps in the market. The measures aim to:
Under Article 3 of the measures, commercial banks must perform equity management in accordance with the principles of:
A senior CBRC official has defined these principles as follows:
The key supervision requirements imposed on major shareholders are as follows:
According to the measures, the same investor and a related party or a party acting in concert cannot invest in more than two commercial banks as a major shareholder or control more than one commercial bank.
Further, where an investor – along with a related party or a party acting in concert – intends, either separately or collectively, to hold more than 5% of a commercial bank's shares for the first time or accumulatively, such parties must first obtain approval from the CBRC or its relevant local office. The administrative licence for a proposed holding of more than 5% of the total shares in a commercial bank in China via domestic or overseas stock markets will be effective for six months.
Where an investor – along with a related party or a party acting in concert – holds, either separately or jointly, between 1% and 5% of the capitalisation or total shares of a commercial bank, such parties must make a record filing with the CBRC or its relevant local office within 10 business days of acquiring such a holding.
Under the measures, a financial product may hold shares in a commercial bank. However, where shares in the same commercial bank are held by financial products controlled by a single investor, the same issuer or manager, the bank's actual controller, a related party or a party acting in concert, such shares cannot exceed 5% of the total shares in the commercial bank.
For further information on this topic please contact Wu Jiejiang at Jingtian & Gongcheng by telephone (+86 10 5809 1000) or email (email@example.com). The Jingtian & Gongcheng website can be accessed at www.jingtian.com.
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