07 March 2019

Wealth Management Subsidiaries of Commercial Banks -New Opportunities for Foreign Financial Institution

By: Liu linlinJiang zhihui

The Emergence of Commercial Banks’ Wealth Management Subsidiaries

Investment Paths for Foreign Financial Institutions

To Become a Controlling Shareholder

  • Founding controlling shareholder of a wealth management subsidiary must be a commercial bank incorporated in China.

  • A foreign financial institution can establish a wealth management subsidiary via its locally incorporated bank in China.

  • The locally incorporated bank will generally be required to satisfy the following major thresholds:

Being profitable in the past three consecutive accounting years;

No major incompliance record during the past two years;

Material prudential supervision indicators in compliance with requirements of regulatory authorities;

Having a wealth management business department in operation for more than three consecutive years;

Making capital contribution using its self-owned funds.

To Get a Non-controlling Interest

  • If unable to satisfy the eligibility requirements for controlling shareholder, foreign financial institutions may invest into a wealth management subsidiary as a non-controlling shareholder.

  • Investment Paths

  
  • The investment vehicle will generally be required to satisfy the following major thresholds:

Being profitable in the past two consecutive accounting years;

No major incompliance record during the past two years;

Making capital contribution using its self-owned funds.

Business Scope of Wealth Management Subsidiaries




Your KWM Team

The financial institution team of King & Wood Mallesons Finance & Capital Market Group specializes in financial institutions’ establishment, day-to-day business, investment, merger and acquisition. We are currently representing multiple commercial banks in their application for the establishment of wealth management subsidiaries.

Our strengths:

  • Being familiar with the most up-to-date financial regulations and market practice;

  • Maintaining good communication channels with financial regulatory authorities;

  • Having an in-depth knowledge of the need and culture of foreign financial institutions;

  • Providing Chinese and English bilingual services.

We are willing to provide you the best legal services which are tailored to your needs.



                         








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A Guide to Doing Business in China

We explore the key issues being considered by clients looking to unlock investment opportunities in the People’s Republic of China.

Doing Business in China
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