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; all designated Chinese-funded foreign exchange banks, and China UnionPay Co., Ltd.:

To standardize and facilitate operation by banks and individuals in respect of foreign exchange business and improve classified regulation of individual players for foreign exchange trading, the State Administration of Foreign Exchange (SAFE) decides to further improve the administration of individual foreign exchange as the individual foreign exchange business monitoring system is launched. The relevant issues are hereby notified as follows:

I. The individual foreign exchange business monitoring system will be launched nationwide on January 1, 2016, and at the same time, the management information system for foreign exchange settlement and sales for individuals will be no longer in use. Banks that have the qualifications for handling foreign exchange settlement and sales (bank) shall handle individual foreign exchange business such as settlement and purchases of foreign exchange through this monitoring system and report relevant business data accurately, completely and in time.

II. In handling foreign exchange business, individuals shall observe relevant regulations in respect of the administration of individual foreign exchange and are not allowed to evade quota and authenticity management in a split way. If doing so, these individuals will be put on a watch list by the SAFE and its branches and sub-branches (foreign exchange authorities).

(I) Foreign exchange authorities will issue the Risk Reminder Notification for Individual Foreign Exchange Business (see Appendix 1) as a risk reminder to individuals who lend their quota to another individual for the evasion of quota and authenticity management. If this happens again, these individuals will be put on a watch list by foreign exchange authorities.

(II) Foreign exchange authorities will put individuals who borrow another individual's quota for the evasion of quota and authenticity management on a watch list and notify them through the Notification on Watch List for Individual Foreign Exchange Business (see Appendix 2) issued by banks.

(III) The watch period of an individual on a watch list is the year the individual is put on the watch list and the two consecutive years that follow. During this period, the individual has to present his/her valid ID card and evidencing materials indicating the trading amount to go through procedures for settlement and sales of foreign exchange for individuals. Banks shall review relevant evidencing materials in strict accordance with the authenticity review principles.

III. Banks shall cooperate with foreign exchange authorities in inspecting individuals and institutions involved in the evasion of quota and authenticity management, and report, within 20 days since the day the individual foreign exchange business monitoring system pushes relevant information, the purposes of individual settlement of foreign exchange, the sources of funds for purchases of foreign exchange and other information required by foreign exchange authorities.

IV. Foreign exchange authorities and banks shall access the individual foreign exchange business monitoring system through the SAFE's application service platform. The details are as follows:

Foreign exchange authorities and banks shall assign technicians and business operators for the daily maintenance of the individual foreign exchange business monitoring system to ensure smooth operation of the system.

V. In case of a nationwide systemic error in the individual foreign exchange business monitoring system, foreign exchange authorities and banks shall take emergency measures in accordance with the Emergency Plan for the Individual Foreign Exchange Business Monitoring System (see Appendix 3) to ensure the smooth and timely handling of individual foreign exchange business.

VI. The foreign exchange settlement and sales under the individual remittance business of China UnionPay Co., Ltd., and individual domestic and foreign currency exchange business handled by franchised institutions for domestic and foreign currency exchange for individuals (franchised institutions) shall be handled in accordance with this Circular. Where there are provisions as otherwise stated in respect of foreign exchange administration, those provisions shall prevail.

VII. This Circular shall take effect as of January 1, 2016. At the same time, the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Regulating Operations of Foreign Exchange Settlement and Sales for Individuals by Banks (Huizongfa No. 90 [2007]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Promulgating the Emergency Plan for the Management Information System for Foreign Exchange Settlement and Sales for Individuals (Huizongfa No. 49 [2008]), the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Interim Measures for Administration of Foreign Exchange Settlement and Sales for Individuals through E-banking (Huifa No. 10 [2011]), the Circular of the State Administration of Foreign Exchange on Trial Implementation of the "Watch List" Management of Individual Splitting Foreign Exchange Settlement and Sales by Banks Engaging in E-Channeled-based Foreign Exchange Settlement and Sales for Individuals (Huifa No. 41 [2011]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Regulating the Review of Access to Foreign Exchange Settlement and Sales for Individuals through E-banking (Huizongfa No. 77 [2013]) will be nullified. In case of any discrepancies with prior regulations, this Circular shall prevail.

Upon receipt of this Circular, all branches and foreign exchange administrative departments of the SAFE should immediately forward it to the central sub-branches, sub-branches, urban and rural commercial banks, foreign banks and franchised institutions. The designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it immediately to their branches. Please report any problems encountered in implementation to the SAFE in a timely manner.

Technology Enquiry Hotline: 010-68402674

Appendix: 1. Risk Reminder Notification for Individual Foreign Exchange Business

2. Notification on Watch List for Individual Foreign Exchange Business

3. Emergency Plan for the Individual Foreign Exchange Business Monitoring System

State Administration of Foreign Exchange

December 25, 2015