By Noah Sin
Foreign banks will no longer need to ask for the banking watchdog’s approval before they offer offshore wealth management services, act as custodians for these services and for mutual funds, or repatriate funds for foreign financial institutions facing liquidation, the CBRC said on February 24.
The CBRC also simplified the procedure for foreign banks to open branches and tap the onshore debt market when it scrapped the requirement to get a legal opinion from a local law firm before issuing debt. Finally, the regulator clarified some of the requirements for foreign banks that want to acquire equity stakes in local banks.
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| Kimi Liu, Clifford Chance |
Kimi Liu, senior associate at Clifford Chance, says the move was a big step, effectively extending the earlier liberalization in March last year, when the CBRC removed the requirement for foreign banks to file for approval when providing offshore services such as bonds, IPOs, M&A and other financing activities to Chinese clients. “The abolition of this approval requirement [for the QDII business] has reflected CBRC’s trend to streamline the licensing regime for wealth management business,” says Liu.
Offshore market
Raymond Yeung, chief economist for Greater China at ANZ, says the new rules on offshore products might well change foreign banks’ fortunes in the Chinese market.