Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

Banking Services

Relevant Mainland Rules and Regulations

Rules and regulations promulgated by the Mainland authorities relating to the implementation of commitments under CEPA :

Acquiring Shareholding of Mainland Banks

According to the "Implementation Measures of the China Banking and Insurance Regulatory Commission for the Administrative Licensing Items concerning Chinese-Funded Commercial Banks (2022 Revision)" (Sep 2022) (in Chinese only), Hong Kong banks acquiring shareholding of Mainland banks shall be able to satisfy the requirements including:
1. have long-term credit rating of "good" given by international credit rating agencies recognized by China Banking and Insurance Regulatory Commission (CBIRC) in the recent two years;
2. have continuous profit making record for the recent two consecutive accounting years;
3. have a commercial bank capital adequacy ratio that reached the average level of capital adequacy ratio of the banking industry in its place of registration, and not less than 10.5%; the total capital of non-bank financial institutions shall not be less than 10% of the total amount of weighted risk assets;
4. have sound and effective internal controls;
5. be registered in a place that has a sound regulatory system for financial institutions;
6. be located in a country (region) which is in sound economic condition;
7. be able to meet other prudential conditions prescribed by the CBIRC.
According to the "The Decision of the China Banking and Insurance Regulatory Commission on the Amendment and Abolishment of Certain Rules" (Order of China Banking and Insurance Regulatory Commission No 5 Aug 2018) (in Chinese only), the Mainland has cancelled the restrictions which govern that a foreign investor shall not hold more than 20% of shares in a Chinese-funded bank, and the total foreign investment in a Chinese-funded bank shall not exceed 25% of the total shares.
For details, please refer to:

Establishing Foreign-funded Banks

According to the "Regulations of the People's Republic of China on Administration of Foreign-funded Banks" (2019 Revision - Sep 2019) (in Chinese only), shareholders that plan to establish a wholly foreign-funded bank or a Sino-foreign joint venture bank, or foreign banks that plan to establish a branch office shall meet the following requirements:
1. They shall have the capability of making profits continuously and a good reputation and do not have any record of gross violation of any law or regulation;
2. They shall have experience of international financial activities;
3. They shall have an effective anti-money laundering system;
4. Shareholders that plan to establish a wholly foreign-funded bank, foreign shareholders that plan to establish a Sino-foreign joint venture bank, or foreign banks that plan to establish a branch or representative office shall be under the effective supervision of the financial regulatory authority of the country or region where they are located, and their applications shall have been approved by the mentioned authority;
5. They shall be able to meet other prudential conditions prescribed by the banking regulatory institution of the State Council (for details of the prudential conditions, please refer to the "Rules for Implementing the Regulations of the People's Republic of China on Administration of Foreign-funded Banks" (Decree of the China Banking and Insurance Regulatory Commission No.6, 2019 - December 2019) (in Chinese only)).
For details about the application requirements, the scope of business and the relevant approvals for setting up foreign-funded banks, please refer to:

Cross-location Sub-branches

According to the "Implementation Rules of the China Banking and Insurance Regulatory Commission on Administrative Licensing for Foreign-Funded Banks (2022 Revision)" (Sep 2022) (in Chinese only), branch offices of Hong Kong banks in Guangdong Province may apply to form a cross-location sub-branch within Guangdong Province. For wholly foreign-funded banks formed in the Mainland by a Hong Kong bank, its branch office in Guangdong Province may apply to form a cross-location sub-branch within Guangdong Province as well.
According to the "Implementation Measures (Pilot) on Issues of Market Access through the Establishment of Cross-location Sub-branches by Guangdong branches of Hong Kong and Macao Banks administered by the Guangdong Office of China Banking Regulatory Commission" (in Chinese only), branch offices of Hong Kong banks in Guangdong Province shall meet the following requirements when setting up a cross-location sub-branch within the jurisdiction of the Guangdong Office of China Banking Regulatory Commission:
1. They shall have a branch office in Guangdong Province which has been operated for 1 year or above;
2. They shall have a good reputation in the industry and a positive social image;
3. They shall have good performances as a going concern with a good asset quality;
4. They shall have a sound risk management system and an effective management information system;
5. The business organization that they have set up in Guangdong Province shall have a relatively strong internal control capability and shall not have committed any serious violation of laws and regulations or been involved in any major case resulting from internal management problems in the last year;
6. They shall have adequate senior management staff and personnel who are qualified for the business;
7. They shall have business premises, safety protection measures and other facilities related to the business that are up to standard;
8. They shall be able to satisfy other requirements stipulated by the Guangdong Office of China Banking Regulatory Commission.
For details about the application requirements and procedures of establishing cross-location sub-branches, please refer to:
- "Implementation Rules of the China Banking and Insurance Regulatory Commission on Administrative Licensing for Foreign-Funded Banks (2022 Revision)" (Sep 2022) (in Chinese only)
- "Implementation Measures (Pilot) on Issues of Market Access through the Establishment of Cross-location Sub-branches by Guangdong branches of Hong Kong and Macao Banks administered by the Guangdong Office of China Banking Regulatory Commission" (in Chinese only)

Cross-boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area

The Cross-boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area ("Cross-boundary WMC") was launched in September 2021, allowing eligible Mainland, Hong Kong and Macao residents in the Guangdong-Hong Kong-Macao Greater Bay Area to invest in wealth management products distributed by banks in each other's market through a closed-loop funds flow channel established between their respective banking systems. For details, please refer to:

For other details, please refer to :

Enquiries concerning the application procedures and requirements for the establishment of foreign-invested banks can be directed to :

The National Financial Regulatory Administration
( Website : http://www.cbirc.gov.cn/cn/view/pages/index/index.html )

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