The Emergence of Commercial Banks’ Wealth Management Subsidiaries
Investment Paths for Foreign Financial Institutions
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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.
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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.
Linlin Liu
Partner丨Beijing
Finance&Capital Markets
Zhihui Jiang
Partner丨Beijing
Finance&Capital Markets