(Effective on April 29, 1996)
Contents
Chapter I General Provisions
Chapter II Application and Establishment
Chapter III Supervision and Management
Chapter IV Dissolution
Chapter V Provisions of Punishment
Chapter VI Supplementary Provisions
Chapter I General Provisions
Article 1
These regulations are promulgated to strengthen the management of foreign financial institutions' resident representative offices in China (hereinafter referred to as the representative offices), in line with the provisions of the "Regulations of the People's Republic of China on the Management of Foreign-invested Financial Institutions in China".
Article 2
Foreign financial institutions as mentioned in these regulations refer to those financial institutions which are registered outside the territory of China, such as commercial banks, investment banks, merchant banks, security companies, insurance companies, insurance brokerage firms, insurance agencies, insurance assessment companies, fund management companies, foreign exchange brokerage firms, credit card companies, leasing companies in financing service; the representative offices as mentioned in these regulations refer to foreign financial institutions' detached offices in China, which are established with approval from the competent government authorities of China, and which engage in such non-profit-seeking business activities as consultancy, liaison, market research, etc..
Article 3
The representative offices shall follow laws and regulations of the People's Republic of China, and their legitimate interest will be protected by laws of the People's Republic of China.
Article 4
The People's Bank of China is the government department that perform the checking and approval of the establishment, and the supervision on business activities, of the representative offices in China; and local branches of the People's Bank of China exercise regular supervision of the activities of the representative offices established in areas of their jurisdiction.
Chapter II Application and Establishment
Article 5
In order to apply for the approval of setting up a representative office in China, a foreign financial institution should fulfill the following conditions:
(1) that its original country or region should have consummate system of financial supervision and management;
(2) that it should be established with approval from the financial supervisory authority in its original country or region, or be a member of certain trade association in the financial sector of their country; and,
(3) that it should engage in legitimate business activities, have a good reputation, and reap a profit throughout the last three years before it applies for the approval of setting up a representative office in China.
Article 6
When applying for the approval of setting up a representative office in China, a foreign financial institution shall submit the following materials:
(1) A letter of application, signed by its chairman of board of directors or general manager, and addressed to the governor of the People's Bank of China;
(2) A copy of its business license or certificate of legally opening of business, issued by relevant supervisory authority in its original country or region;
(3) Articles of Association, and a name list of the board of directors or principle partners;
(4) Its annual financial statements for the last three years before application;
(5) A letter of permit, issued by the financial supervisory authority in its original country or region, allowing it to set up representative office in China, or a letter of recommendation from the trade association of that country, of which it is a member; and,
(6) Other materials as are required by the People's Bank of China.
All the materials as stipulated in this article (except those listed in the Item (4), which are to be submitted by a foreign financial institution in its application for a representative office in China, and which are originally written in a foreign language, should have the Chinese translation attached when being submitted; The business license of the foreign financial institution in question and the recommendation letter should be notarized by a certified notary office in its original country or region, or be certified by China's embassy or consul in its original country.
Article 7
A Foreign financial institution which applies to set up a representative office in the capital city of a province or autonomous region in China, should submit its application documents to the branch office of People's Bank of China in the province or autonomous region; and if it applies to set up a representative office in some city other than the capital city of a province or autonomous region, it shall submit relevant application documents to the local branch of the People's Bank of China in that city; the application documents submitted will first be checked and verified by the branch office of the People's Bank of China in that city, and then, forwarded by the branch office to the bank's headquarters.
Article 8
If the application for setting up a representative office by a foreign financial institution has been initially checked and approved, the People's Bank of China will issue to the applying foreign financial institution a formal application form; and the foreign financial institution in question shall, within two months after receiving the formal application form, submit the following materials:
(1) an identification certificate and a resume of the person to be appointed as the chief representative of the representative office in application,
(2) a power-of-attorney, signed by its chairman of the board of directors or general manager, for the chief representative designate.
All the materials required in this article should, in case they are originally made in a foreign language, have Chinese translations attached; any failure to submit the formal application form within the prescribed period is regarded as that the applying foreign financial institution has waived its right of application.
If a foreign financial institution does not receive a formal application form within six months after it has submitted the application documents, it may consider that its application has been rejected.
Article 9
A foreign financial institution, which have already five (or more than five ) representative offices or branches established in China, is allowed to apply for setting up a general representative office in China.
The procedure for the foreign financial institution to apply for setting up a general representative office is the same as that for a foreign financial institution in applying for setting up a representative office.
Article 10
The official title of the representative office of a foreign financial institution in China should be composed in the following order: "the name of the foreign financial institution" plus "the name of the city where the representative office is located" plus and "the specification of representative office"; whereas the chief of the representative office should be called "chief representative", and other persons in charge should be called "representative", or "deputy representative". The name of the general representative office of a foreign financial institution in China should be composed in the following sequence: "the name of the foreign financial institution" plus "the specification of general representative office in China", whereas the chief in the general representative office should be called "general representative", and other persons in charge should be called "representative", and "deputy representative".
Article 11
The foreign financial institution, whose application of setting up a representative office in China has been finally approved, will receive a certificate of approval from the People's Bank of China, and the representative office approved to be established will have an effective term of residence of 6 years. Within 30 days after approval has been given, the representative office should register with the State Administration of Industry and Commerce on the strength of the certificate of approval issued by the People's Bank of China, and undergo the procedure of residence and individual income tax registration with the local public security and taxation departments.
Chapter III Supervision and Management
Article 12
The representative office of a foreign financial institution and employees of the representative office should not enter into any agreement or contract with any legal person or natural person, which might generate an income to the representative office or the institution it represents, and are also forbidden to engage in other profit-seeking business.
Article 13
The chief representative of a representative office shall not be served concurrently by a responsible official in the general management or regional headquarters of the parent financial institution, or not hold any post in any other institutions in China; the chief representative should attend to the daily activities of the representative office, and if he or she is to leave China and stay abroad for a period of more than one month, the chief representative should delegate his or her duty to a special person, and also report it to the local branch of the People's Bank of China.
Article 14
A representative office should, before the end of every February, submit a report on its work in the previous year to the local branch of the People's Bank of China, which will forward it to the headquarters of the bank. The work report should be compiled in Chinese according to a form issued by the People's Bank of China.
Article 15
If any one of the following events occurs in a foreign financial institution which has a representative office in China, the representative office should, within one working day after its parent institution publicizes the occurrence of the events, make a report on the matter to the local branch of the People's Bank of China, which will forward it to the headquarters of the bank:
(1) a change in the articles of association, registered capital or registered business address of the foreign financial institution;
(2) reorganization, disintegration or merge of the foreign financial institution or change in its major official in charge;
(3) serious loss sustained in business operation.
Article 16
If a representative office is to have any of following changes, it should submit an application to the local branch of the People's Bank of China, which will forward it to the headquarters of the bank for approval:
(1) change of the chief representative. To apply for the approval for such a change, letters of application and attorney, signed by the chairman of board of directors or general managers of the parent financial institution of the representative office, should be submitted, as well as an identification certificate and a resume of the new chief representative to be appointed;
(2) change of official name. In such case, a letter of application, signed by the chairman of board of directors or general manager of the parent institution, should be submitted; and,
(3) extension of the residence period. For such extension to be approved, the representative office should, two months before the expiration date of its present residence period, submit a letter of application, which should be signed by the chairman of board of directors or general manager of the parent financial institution, in addition to a report on the representative office's work in last three years, signed by the chief representative. If the People's Bank of China approves the application of extension after checking, the residence period of the representative office will be extended for another six years.
Article 17
If a representative office is to have any of following activities, it should apply for approval to, or file a record with, the local branch of the People's Bank of China:
(1) change, or increase or decrease in the number, of representatives, deputy representatives, personnel from foreign countries or from Taiwan, Hong Kong and Macao. In such case, the representative office should submit a letter of application, signed by the chief of its supervisory department in the parent financial institution, in addition to certificates of identification and resumes of the personnel to be employed, to the local branch of the People's Bank of China for approval, and the local branch of the bank will report such change to the headquarters of the bank;
(2) change of business address. To change its business address, the representative office should submit a application on change of address, signed by its chief representative, to the local branch of the People's Bank of China for approval, and the branch will report such change to the headquarters of the bank; and
(3) employment of Chinese citizens. To employ Chinese citizens, the representative office should submit a name list of the Chinese citizens to be employed, their identification certificates and resumes, to the local branch of the People's Bank of China for record.
Chapter IV Dissolution
Article 18
If a representative office is to be dissolved, it should first submit an application for dissolution, signed by the chairman of the board of directors or general manager of the parent financial institution, to the People's Bank of China. When approval of dissolution has been given, it should apply to the State Administration of Industry and Commerce for cancellation of its registration, and undergo the necessary procedure with relevant government departments.
Article 19
If a representative office is to be turned into an operational branch office or general representative office, the original representative office in question should be dissolved automatically, and it should apply to the State Administration of Industry and Commerce for cancellation of its registration.
Article 20
After the dissolution of a representative office, all the matter left unsettled of the dissolved representative office should be handled by the general representative office of the foreign financial institution in China; and in case there is not such a general representative office established in China, responsibilities on all matters left unsettled after the dissolution should be borne by the parent financial institution.
Chapter V Provisions of Punishment
Article 21
If a foreign financial institution violates these regulations by setting up a representative office in China without approval, the People's Bank of China will cancel the representative office thus established; any person involved who has committed any violation of the criminal law, thereby committing a criminal offense, will be investigated for their criminal responsibilities according to law.
Article 22
If the chief representative of a representative office violates the Article 13 of these regulations by holding a concurrent post in other institutions or leaving China to stay abroad for a period of more than one month without filing a report with the local branch of the People's Bank of China, the People's Bank of China will have the right to ask the foreign financial institution to change the chief representative in question.
Article 23
If a representative office violates the Articles 14 and 15 of these regulations by failing to submit required materials within the prescribed period, the People's Bank of China will order it to correct such failure within a certain period and submit a written self-criticism on the issue.
Article 24
If a representative office has violated the Articles 2 and 12 of these regulations by engaging in activities that might generate an income to the representative office in question, or violated the Articles 16 and 17 of these regulations by making change in certain areas without approval, it will be punished according to the "Rules on the Management of Foreign Financial Institutions" and other related regulations of the People's Bank of China.
Article 25
If a representative office commits violation of Articles 2, 12, 13, 14, 15, 16 and 17 of these regulations, it will be punished according to stipulations in these regulations and other relevant regulations of the People's Bank of China; moreover, the People's Bank of China will issue a warning to it, publicize a circular criticizing the violation, or cancel the representative office, according to the seriousness of such violations.
Article 26
If a representative office commits concurrent violations of these regulations and regulations on registration management, it will be jointly punished by the People's Bank of China and State Administration of Industry and Commerce.
Chapter VI Supplementary Provisions
Article 27
These regulations are applicable to applications filed by financial institutions in Taiwan, Hong Kong, Macao and foreign-invested financial institutions which are registered in China, for setting up a representative office in this country.
Article 28
The People's Bank of China is responsible for the interpretation of these regulations.
Article 29 These regulations enter into force on the date of promulgation. On the same date, the People's Republic of China's Regulations on the Management of Foreign Financial Institutions' Application of Setting Up Resident Representative Office in China, as promulgated by the People's Bank of China on June 1, 1991, are thereby annulled.
