The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government; the branches in Shenzhen, Dalian , Qingdao , Xiamen , and Ningbo ; and all designated Chinese-funded foreign exchange banks:

For the purpose of regulating the foreign exchange-related business involved in overseas direct investments by domestic banks, the following issues concerning the foreign exchange administration of overseas direct investments by domestic banks are hereby announced, according to the Regulations of the People's Republic of China on Foreign Exchange Administration (Decree No. 532 of the State Council of the Peoples Republic of China) and the Circular of the SAFE on the Promulgation of the Regulations on the Foreign Exchange Administration of Overseas Direct Investments by Domestic Institutions (Huifa [2009] No. 30):

1.  Domestic banks contained herein refer to legal-person banks, such as domestic policy banks, state-owned commercial banks, joint-stock commercial banks, the Postal Savings Bank of China , foreign legal-person banks, city commercial banks, rural commercial banks, and rural cooperative banks.

2. When making overseas direct investments in the event of (1) the establishment of overseas branches (except for representative offices); (2) the establishment of overseas affiliates; (3) equity acquisitions of overseas institutions in line with the relevant laws; and (4) other direct investment projects approved by the relevant authorities, the domestic banks concerned shall, after receiving approval from the banking regulatory departments or other relevant authorities, go through the foreign exchange registration formalities for overseas direct investments at the branches of SAFE in their locality (hereinafter referred to as the local SAFE offices) with the materials required in Article 7 of the Regulations on the Foreign Exchange Administration of Overseas Direct Investments by Domestic Institutions (hereinafter referred to as the Regulations).

For transactions concerning Item (1) above, the domestic banks shall furnish the corresponding operating capital allocation plans that have been submitted to the banking regulatory departments.

3. The domestic banks shall fill out the Application Form for Foreign Exchange Registration for Overseas Direct Investments (hereinafter referred to as the Application Form) annexed to the Regulations according to the following:

1) Fill in the Investment Nature item according to the business scope of the invested institutions. When the invested institutions are financial institutions, fill in Otherand specify the specific financial category (banking, insurance, securities, or other) as a note.

2) When the overseas investments are made with self-owned or purchased foreign exchange (including remittances from domestic and overseas accounts), for the Means of Contribution item, Amount and Currency of Contribution in Domestic Spot Exchange shall be selected; When such investments are made with profits and dividends generated from other overseas institutions in which the domestic banks have invested, for the Means of Contribution item, Converted Amount and Currency of Contribution in Overseas Fundsshall be selected.

3) When the payment is made directly with foreign exchange (including remittances from domestic and overseas accounts), under the Source of Foreign Exchange item Domestic Outward Remittance shall be selected.  If no foreign exchange purchases are involved, Self-owned Foreign Exchange shall be selected; If foreign exchange purchases are involved, Foreign Exchange Purchase shall be selected

4. The local SAFE offices shall, upon confirmation of the authenticity of the relevant materials and information, handle the foreign exchange registration for the overseas direct investments by domestic banks in the relevant business system and issue a corresponding registration certificate for the domestic banks that are handling such registration for the first time.

5. In the event of outward remittances of foreign exchange for overseas direct investments, domestic banks may, as per the foreign exchange registration certificate for overseas direct investments that contains relevant information thereof, go through the formalities for foreign exchange purchases or payments through the relevant business system.

The domestic banks shall, after conclusion of the formalities for foreign exchange purchases and payments, handle the feedback formalities within THREE working days through the relevant business system as per the relevant regulations.

6. The domestic banks shall, as per the first two provisions of Article 9 as well as Article 10 of the Regulations, handle the foreign exchange registration, alteration, or cancellation formalities for overseas direct investments at the local SAFE offices for changes in issues relevant to overseas direct investments that have already been conducted. For issues important but irrelevant to capital changes, such as the long-term equity investment incurred in the registered overseas institutions, the domestic banks shall place such issues on file for the record for future reference at the local SAFE offices.

7. Domestic banks may conduct outward remittances of preliminary expenses for overseas direct investments with self-owned foreign exchange or with direct foreign exchange purchases. Domestic banks without approval for such investments by the banking regulatory departments or other relevant authorities shall recall the residual capital within ONE year after the date of the outward remittance of the preliminary expenses. When the capital remitted outward is foreign exchange purchased in RMB, the domestic banks may conduct the foreign exchange settlement on their own with the original voucher for the foreign exchange purchase.

8. Profits generated from overseas direct investments by domestic banks shall not undergo separate foreign exchange settlements, but will be included in the foreign exchange profits of the banks for uniform administration, and corresponding foreign exchange settlements shall be carried as per the relevant regulations.

9. For foreign exchange earnings under the capital account generated from capital reductions, equity transfers and liquidations, and so forth from investments in overseas institutions by domestic banks, as well as foreign exchange receipts and payments as stated in Article 7 and 8 contained herein, the domestic banks shall provide feedback on the transaction through the relevant business system within THREE working days after the date of the foreign exchange receipt and payment.

10. In the event of settlements of foreign exchange earnings under the capital account generated from capital reductions, equity transfers and liquidation, and so forth from investments in overseas institutions, the domestic banks shall, on the basis of their own capital as well as the relevant regulations on foreign exchange settlements and sales of financial projects, conduct such settlements upon approval from the SAFE or the local SAFE branches (including the foreign exchange administrative departments). Domestic banks shall also provide feedback on the transaction through the relevant business system within THREE working days after the date of settlement.

 11. When domestic banks transfer full or partial equity of overseas institutions acquired from their overseas direct investments to other domestic institutions, the relevant funds shall be paid in RMB within the territory of China .  The transferors of such equity shall handle the alteration or cancellation formalities for the foreign exchange registration of their overseas direct investments at their local SAFE offices. The transferees of such equity shall handle the foreign exchange registration formalities for the overseas direct investment of the transferred equity at their local SAFE offices.

12. In the event of overseas direct investments conducted prior to promulgation of this Circular, domestic banks shall, as per Article 2 contained herein, handle the foreign exchange registration for overseas direct investment at the local SAFE offices by October 31, 2010.  In the event of failure to furnish the relevant approval documents by the relevant authorities for historical reasons, the domestic banks shall submit to the local SAFE offices a completed Application Form with information on each investment as well as a summary list of information on all investments, and the local SAFE offices shall enter such information on the registration.

When domestic banks fail to handle the above registration formalities within the prescribed period or according to the prescribed procedures, the local SAFE offices shall impose penalties for breach of the relevant regulations on administration of foreign exchange registration.

13. This Circular shall enter into force as of September 1, 2010. As for matters of foreign exchange administration concerning overseas direct investments by domestic banks not clarified in this Circular, the domestic banks shall handle such business with reference to the Regulations.

All SAFE branches and foreign exchange administrative departments shall, upon receipt of this Circular, immediately forward it to the subordinate branches, foreign legal-person banks, city commercial banks, rural commercial banks, and rural cooperative banks within their respective jurisdictions;

June 30, 2010