On January 5 2018 the China Banking Regulatory Commission (CBRC) issued its Interim Measures for the Equity Management of Commercial Banks (CBRC [2018] 1), which came into effect on the same date. The measures have tightened the CBRC's regulation of the information disclosure and reporting requirements imposed on material shareholders that have a significant impact on the operation and management of commercial banks established in China.

In February 2018 the CBRC issued two supporting documents in order to implement the measures:

  • the Circular of the General Office of the CBRC on Working Effectively to Implement the Interim Measures for the Equity Management of Commercial Banks; and
  • the Circular of the General Office of the CBRC on Standardising Matters Reported by Shareholders of Commercial Banks.


The CBRC's measures were issued in the wake of the State Council's policies on preventing and controlling financial risks and closing the supervision gaps in the market. The measures aim to:

  • strengthen the equity management of commercial banks;
  • regulate the behaviour of shareholders of commercial banks;
  • protect the legitimate rights and interests of commercial banks, their depositors and other clients and their shareholders; and
  • promote the sustainable and healthy development of commercial banks.

Key principles

Under Article 3 of the measures, commercial banks must perform equity management in accordance with the principles of:

  • classification management;
  • good qualifications;
  • clear relationships;
  • well-defined rights and responsibilities; and
  • openness and transparency.

A senior CBRC official has defined these principles as follows:

  • Classification management – shareholders of commercial banks are classified as major or general shareholders based on their influence on the bank's management and operation.
  • Good qualifications – shareholders of commercial banks must be high-quality enterprises which:
    • demonstrate good corporate governance, financial stability, honesty and trustworthiness; and
    • operate in compliance with the law.
  • Clear relationships – the relationship between a commercial bank's shareholders, controlling shareholders, actual controllers, related parties acting in concert and its ultimate beneficiaries should be clear and transparent.
  • Well-defined rights and responsibilities – shareholders of commercial banks must exercise their rights in accordance with the law and perform their statutory obligations. In addition, commercial banks must strengthen their equity management. Further, the CBRC and its local offices must carry out supervision and oversight in accordance with the law.
  • Openness and transparency – commercial banks and their shareholders must fully disclose relevant information as required by law and are subject to public supervision.

Key supervision requirements

The key supervision requirements imposed on major shareholders are as follows:

  • Major shareholders must make written commitments to comply with the law and make a statement regarding the purpose of their investment.
  • Major shareholders must explain their equity structure layer by layer, disclosing up to their actual controller and ultimate beneficiaries, as well as their association with the other shareholders or parties acting in concert.
  • The number of shares held by major shareholders must be limited.
  • A negative list based on the behaviour of major stockholders must be created.
  • Major shareholders cannot assign their equity in a commercial bank within five years of obtaining the equity.
  • Major shareholders cannot intervene in the operation and management of a commercial bank.
  • Major shareholders cannot undertake capital supplementation obligations.
  • Major shareholders cannot establish risk-isolation mechanisms.
  • Major shareholders cannot prevent the conflict of interest that may occur in the event of employee cross holding.

Investment limits and approval and filing requirements

According to the measures, the same investor and a related party or a party acting in concert cannot invest in more than two commercial banks as a major shareholder or control more than one commercial bank.

Further, where an investor – along with a related party or a party acting in concert – intends, either separately or collectively, to hold more than 5% of a commercial bank's shares for the first time or accumulatively, such parties must first obtain approval from the CBRC or its relevant local office. The administrative licence for a proposed holding of more than 5% of the total shares in a commercial bank in China via domestic or overseas stock markets will be effective for six months.

Where an investor – along with a related party or a party acting in concert – holds, either separately or jointly, between 1% and 5% of the capitalisation or total shares of a commercial bank, such parties must make a record filing with the CBRC or its relevant local office within 10 business days of acquiring such a holding.

Financial products holding shares in commercial banks

Under the measures, a financial product may hold shares in a commercial bank. However, where shares in the same commercial bank are held by financial products controlled by a single investor, the same issuer or manager, the bank's actual controller, a related party or a party acting in concert, such shares cannot exceed 5% of the total shares in the commercial bank.

For further information on this topic please contact Wu Jiejiang at Jingtian & Gongcheng by telephone (+86 10 5809 1000) or email ( The Jingtian & Gongcheng website can be accessed at

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