To implement the spirit of the central government on deepening the financial reform and opening up, the State Administration of Foreign Exchange (SAFE) has recently released the Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (Announcement No. 1 [2018] of the State Administration of Foreign Exchange, "Regulations"), and issued the Circular of the People's Bank of China and the State Administration of Foreign Exchange on the Management of Domestic Securities Investment by RMB Qualified Foreign Institutional Investors (Yinfa No. 157 [2018], "Circular") together with the People's Bank of China, so as to improve administration of domestic securities investment by QFIIs/RQFIIs and further facilitate cross-border securities investment.

Major policies and measures are as follows: first, cancel the requirement that the outward remittances by QFIIs should be no higher than 20%, and they are allowed to entrust a custodian with handling outward remittances. Second, cancel the requirement on the lock-up period of principal for QFIIs/RQFIIs, and they are allowed to remit out principal based on investment situations. Third, QFIIs/RQFIIs are allowed to engage in foreign exchange hedging to offset the risks arising from foreign exchange rate in domestic investment.

The Regulations and the Circular will become effective as of issuance. (The end)