The SAFE has recently published the Circular of the State Administration of Foreign Exchange on Foreign Exchange Administration for Overseas Institutional Investors Participating in China's Interbank Bond Market (Huifa No. 12 [2016], "Circular") to facilitate the opening-up of the interbank bond market and standardize foreign exchange administration for overseas institutional investors participating in the interbank bond market.

The highlights of the Circular are as follows: (a) overseas institutional investors are subject to registration management, and shall perform foreign exchange registration via a settlement agent; (b) no quota will be set for an individual institution or no total quota will be set. An overseas institutional investor may go through without authorization or approval of the SAFE the procedures for inward and outward remittances, or settlement and purchases of foreign exchange with a bank directly, based on relevant registration information; (c) the currencies in outward and inward remittances shall be the same, i.e., the proportion of domestic and foreign currencies in an outward remittance by an investor shall be consistent with that of an inward remittance, with the difference no higher than 10%.

The Circular will come into force on the day of release. (The end)