China recently introduced 12 new measures to further open up its banking and insurance sectors. Lawyers say that these give rise to greater opportunities for foreign investors.
On May 1, the China Banking and Insurance Regulatory Commission (CBIRC) announced its plans to issue 12 new measures shortly on further opening up the country’s banking and insurance sectors.
Following the opening-up measures already taken in the finance sector last year, this is a new milestone in the country’s efforts at liberalizing the two sectors. China already has one of the world's most important banking and insurance markets: its banking assets rank first in the world, and its insurance premium income ranks second in the world, according to official data.
The CBRIC is accelerating the development of the applicable laws and regulations and supporting policies to ensure early implementation of the new measures. To date, the Administration of Foreign-funded Banks and the Regulations on the Administration of Foreign-funded Insurance Companies have undergone updates, and are scheduled to be implemented soon.
Among the changes, no bank – either or foreign - will be subject to any shareholding limit in its investment in a domestic commercial bank in China.
“This will bring more acquisitions and mergers between domestic commercial banks, and will ease the difficulty of introducing new shareholders to some small and medium-sized banks,” said Stanley Zhou, a partner at King & Wood Mallesons, “But the acquisitions are still subject to the top regulator’s supervision of the shareholders of commercial banks, particularly the rules and regulations on restricting related entities to invest in multiple domestic banks.”
In addition to mergers and acquisitions, foreign financial institutions can also establish Sino-foreign joint venture banks with Chinese non-financial institutions, as “the requirements on the Chinese shareholder of a Sino-foreign joint venture bank will be relaxed and the Chinese sole shareholder or major shareholder will no longer have to be a financial institution,” says Zhou. This allows Chinese non-financial institutions, either state-owned capital or private, to become shareholders of Sino-foreign joint venture banks. “It also offers foreign investors more options in choosing their joint venture partners in China,” he adds.
ROOM FOR GROWTH
At present, foreign banks and insurance companies account for only 1.64 percent and 6.36 percent of the total assets in China, respectively, which means there is still much room for further opening its finance sector in the future. The relaxation of the requirements intends to open the door wider, especially to smaller and niche players.
However, this doesn’t mean a lower level of regulatory standard. Instead it pays more attention to the business operations capabilities, quality and efficiency of foreign financial institutions, avoiding the “one-size-fits-all” benchmark that only considered asset size only.
“As for practical considerations, establishing a Chinese presence often faces high costs so it often makes sense to seek Chinese partners and set up joint-venture banks which are ‘compact but competitive.’ These have the benefit of exploiting competitive niches resulting in cost savings and benefit from Chinese growth - leading to win-win scenarios for all,” says Zhou.
The implementation of the new measures will bring more business opportunities to lawyers in financial regulatory compliance, investment, mergers and acquisitions, financial product design, anti-monopoly review and dispute resolution.
As more and more foreign institutions enter the Chinese financial market, “how to deal with the legal needs of various types of foreign institutions on different stages and help them understand the legal, regulatory and business environment of China’s financial market is also a big challenge," says Zhou.
“Lawyers should also be aware of their competitive advantages by selecting the right clients in their demonstrated areas of expertise. For example, in joint venture projects, if it proves difficult to represent foreign parties, it may be advisable to represent the Chinese parties instead,” adds Zhou.
扩大银行业保险业对外开放
银保监会近期拟出台12条对外开放新措施，进一步扩大银行业保险业对外开放。律师重点提及了在此轮新措施中，将有哪些方面对外国投资者来说意味着较大机遇。
2019年5月1日，中国银保监会宣布拟推出进一步扩大银行业保险业对外开放的12条新措施。
这是继去年推出的一系列开放政策的又一重大举措。据官方数据显示，中国已成为全球最重要的银行与保险业市场之一：银行业资产规模全球第一、保险保费收入也位列全球第二。
金融管理部门正加快法规修订和配套制度建设，推动开放措施落地实施。目前，《外资银行管理条例》与《外资保险公司管理条例》两个条例的细则已经修改完成，拟于近期发布施行。
此次推出的12条新措施中，首条即为：按照内外资一致原则，同时取消单家中资银行和单家外资银行对中资商业银行的持股比例上限。
“这为境内商业银行之间的收购和兼并打开了通道，同时也缓解了某些中小银行难以引进新股东的情况。”金杜律师事务所合伙人周昕律师指出，“但该等收购和兼并仍然要受限于银保监会对于商业银行股东的穿透式监管，特别是法律法规对于关联主体投资于多个境内银行的限制。”
除收购兼并外，境外金融机构还可以与境内非金融机构合资设立银行。“取消中外合资银行的中方唯一或主要股东必须是金融机构的要求，这使得境内非金融机构，无论是国有企业还是民营资本，均有机会成为中外合资银行的股东，”周昕律师认为，“另一方面，这也拓宽了境外金融机构对于其合资方的可选择范围。”
发展空间
当前，外资银行和外资保险公司在华资产占比仅为1.64%和6.36%，中国金融业在整体开放政策上仍存在较大提升空间。此轮新措施也取消了境外金融机构在华设立银行、保险经纪公司、信托公司的总资产要求，将为资产规模较小但在专业领域具有特色和专长的境外金融机构提供可能性。
但这并不意味着监管标准降低，而是更加注重境外金融机构的业务经营能力、质量和效益，避免以往通过资产规模“一刀切”的准入方式。
“在商业存在形式上，由于直接在中国设立子行或分行往往面临更高的成本，故与境内机构设立合资银行对该类‘小而美’的外国银行可能是更好的选择。在实现与合资方分担成本的基础上，不仅能够使得该类外国银行抓住中国市场的机遇，还能通过中外资合作实现共赢。”周昕律师谈到。
新的对外开放措施的执行无疑将为律师带来更多的交易和业务机会，服务领域可涵盖：金融监管合规、投资并购、金融产品设计、反垄断审查、争议解决等各方面。
但在越来越多的外资机构进入中国金融市场，“如何应对不同类型和层次的外资机构的法律需求，帮助其了解中国金融市场的法律、监管及业务环境，对于律师来说也是一大挑战。”周昕律师坦言。
“此外，律师还应注意根据自身优势，选择自己的服务对象和服务领域。例如在合资项目中，如争取代表外方难度较大，可争取代表中方投资者。”周昕律师补充道。
To contact the editorial team, please email ALBEditor@thomsonreuters.com.
