NFRA Regulates Commercial Banks' Free Trade Offshore Bond Business in the Pudong New Area

Recently, the National Financial Regulatory Administration (NFRA) has issued the Circular on Matters Concerning Commercial Banks' Conduct of Free Trade Offshore Bond Business in the Pudong New Area (the "Circular").

The Circular provides that commercial banks conducting free trade offshore bond business in the Pudong New Area shall focus on serving the overseas investment and financing needs of enterprises "going global" and high-quality enterprises in countries and regions participating in the Belt and Road Initiative, and support reasonable financing in the real economy. The Circular clarifies that commercial banks shall, in light of their own development strategies, management capabilities, and risk tolerance levels, establish internal management systems for free trade offshore bond business in the Pudong New Area. Such systems shall specify core elements including the division of responsibilities, organizational structure of the business, operational procedures, compliance review, and risk disposal mechanisms, and commercial banks shall strengthen risk assessment and monitoring. The Circular further provides that commercial banks registered in the Pudong New Area, as well as commercial banks' branches registered in the Pudong New Area, may underwrite free trade offshore bonds. The Circular shall apply, mutatis mutandis, to branches of foreign banks that conduct free trade offshore bond business in the Pudong New Area.



(Source: https://www.nfra.gov.cn/cn/view/pages/governmentDetail.html?docId=1261546&itemId=4167&generaltype=1)

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