Foreign banks remain subject to regulation-laden PRC underwriting process

Author: Brian Yap | Published: 9 May 2017

The China Banking Regulatory Commission (CBRC) issued a circular on March 10 on matters concerning business undertaken by foreign-invested banks, clarifying the exemption of overseas banks from obtaining prior approval when underwriting treasury bonds, investing in PRC financial institutions and helping Chinese clients raise offshore capital.

But while the circular has clarified the exemption as it pertains to the CBRC, offshore banks are required to seek out the approval of the Ministry of Finance when underwriting treasury bonds, which are regulated by different authorities under different regimes. 

"As the circular has only introduced high level guidance, specific implementation rules and guidelines are expected to be provided by various regulatory authorities," said Tiecheng Yang, partner at Clifford Chance in Beijing.


A March 10 circular said that directly  foreign-owned and joint venture banks are not required to seek prior approval from the  China Banking Regulatory Commission (CBRC) before underwriting treasury bonds;The low...