The China Banking and Insurance Regulatory Commission (CBIRC) has issued new ownership rules for unlisted Chinese banks, which now have until the end of June 2020 to comply with them.
Chinese regulators are cracking down on unlisted commercial banks after the state took ownership of regional lender Baoshang Bank in May. The takeover was initiated after concerns about how the bank’s owners used the lender’s assets. The state stepping in originally sent shock waves through the country’s financial sector.
Now, the CBIRC has listed a new set of rules on its website. The rules will force unlisted commercial banks to register their stakeholders with qualified custodians such as regional equity exchanges by end-June 2020. Similarly, all commercial banks to identify their shareholders by the end of 2021.
This is a major change to the Chinese regulatory landscape around financial institutions. Previously, only banks listed in the main stock market and over-the-counter market needed to register their stakeholders with custodian institutions.
By changing the requirements to operate as bank in China, CBIRC hopes to put an end to “chaotic issues on ownership due to weak corporate governance,” according to a statement seen by Reuters.
This isn’t the only crackdown of the Chinese financial sector that has occurred recently. For instance, the People’s Bank of China revealed in June that it was looking to collaborate globally to combat money laundering. This commitment to launch anti-money laundering initiative was initiated after Europol officials reported that Baltic states had seen an influx of illicit money coming from China and Russia.
Copyright © 2018 RegTech Analyst
