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The State Administration of Foreign Exchange (SAFE) recently wrote letters to the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) respectively, confirming its official participation in the Coordinated Portfolio Investment Survey (CPIS) and the International Banking Statistics (IBS). The CPIS collects information on the stock of cross-border portfolio investment holdings (by country or region). The BIS reflects the stock of the cross-border financial assets and liabilities of a country's banking industry. The compiling principles of the CPIS and IBS are consistent with the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) published by the IMF. Participation in the CPIS and IBS is one of the motions of the G20 on data gaps. The SAFE will release China's CPIS and IBS statistics soon. 2016-01-19/en/2016/0119/1184.html
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2018-05-17/en/DataTemplateonInternational/index.html
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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, and the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and all designated Chinese-funded foreign exchange banks: To further deepen the reform of foreign exchange administration system, better serve and facilitate the business and capital operations by domestic enterprises, the SAFE decides to implement the reform of the administrative approach to foreign exchange settlement of the external debt of enterprises across the country, based on the experience from the preliminary pilot program conducted in some regions, while standardizing the management for discretionary settlement and payment of foreign exchange receipts under the capital account in a uniform manner. Relevant issues are notified as follows: First, pushing nationwide the reform of the way to manage settlement of corporate external debt Based on the experience gained by China (Shanghai) Pilot Free Trade Zone, China (Tianjin) Pilot Free Trade Zone, China (Guangdong) Pilot Free Trade Zone, and China (Fujian) Pilot Free Trade Zone, efforts will be made to roll out nationwide the reform of the way to manage settlement of corporate external debt. Since this Circular becomes effective, domestic players, Chinese or foreign-funded enterprises, but not financial institutions, can go through foreign exchange settlement procedures for their external debt at their discretion. Second, unifying the policy for discretionary settlement of foreign exchange receipts under the capital account by domestic institutions Discretionary settlement of foreign exchange receipts under the capital account means that if foreign exchange receipts under the capital account including foreign exchange capital, external debt and funds recovered from overseas listing could be for discretionary settlement according to relevant policies, settlement can be handled with a bank based on the real needs of domestic institutions. Restrictive provisions on the settlement of foreign exchange receipts of domestic institutions under the capital account in existing regulations shall prevail. The proportion of discretionary settlement of foreign exchange receipts of domestic institutions under the capital account is temporarily 100% at present. The SAFE may adjust the aforesaid proportion in due time based on the BOP situations. During the course of implementing the discretionary settlement of foreign exchange receipts under the capital account, the domestic institutions can still choose the existing procedures for settlement upon payment for the use of foreign exchange receipts. For each foreign exchange settlement for domestic institutions, based on the principle of foreign exchange settlement upon payment, banks shall examine the authenticity and compliance in the use of the funds for prior transaction of foreign exchange settlement (including discretionary settlement of foreign exchange and foreign exchange settlement upon payment). Domestic transfers in original currency and cross-border outward payments of foreign exchange receipts of domestic institutions shall be processed pursuant to the prevailing regulations on foreign exchange administration. Third, RMB funds from the discretionary settlement of foreign exchange receipts under the capital account of domestic institutions shall be included in management of accounts for FX settlement and pending payment The domestic institutions shall, in principle, open accounts with their banks for capital account – foreign exchange funds settled and to be paid (“accounts for FX settlement and pending payment”) for the deposits of RMB funds from the discretionary settlement of foreign exchange receipts under the capital account on a one-on-one basis, and make various payments through these accounts. The capital account, domestic asset realization account, domestic reinvestment account, special account for external debt, special account for overseas listing and other qualified accounts under the capital account under the same name which are opened by a domestic institution with the same bank outlet may share an account for FX settlement and pending payment. The RMB funds of domestic institutions from foreign exchange settlement upon payment shall not be used for payments through the accounts for FX settlement and pending payment. The scope of the receipts in the accounts for FX settlement and pending payment includes: funds transferred through foreign exchange settlement from capital account, domestic asset realization account and domestic reinvestment account, special account for external debt, special account for overseas listing and other qualified accounts under the capital account under the same name or held by an enterprise for domestic equity investments; funds transferred from the account for FX settlement and pending payment under the same name or held by an enterprise for domestic equity investment; funds returned after transfer from these accounts, pursuant to the regulations; funds returned due to revocation of the transactions; eligible RMB income, interest income in the account; and other receipts registered by the foreign exchange authority (bank) or approved by the foreign exchange authority. The scope of payments in the accounts for FX settlement and pending payment includes: payments within the business scope, payments of funds for domestic equity investments and security deposits in RMB, funds transferred to the special account for centralized funds management and the account for FX settlement and pending payment under the same name; foreign exchange purchases and payments or direct outward repayments of external debt; funds transferred to the special account for repayment of principal and interest; foreign exchange purchases and payments or direct outward remittance for repurchase of overseas shares or other payments related to overseas listing; foreign exchange purchases and payments or direct outward payments owing to capital reductions or withdrawals by foreign investors; taxes withheld and remitted by the company for overseas institutions to pay domestic authorities; proceeds from share decrease by state-owned shareholders transferred to social security fund; foreign exchange purchases and payments or direct outward payments under the current account; and other payments under the capital account registered by the foreign exchange authority (bank) or approved by the foreign exchange authority. RMB funds in the accounts for FX settlement and pending payment shall not be transferred back to foreign exchange account under the capital account through purchase of foreign exchange. RMB funds transferred from the accounts for FX settlement and pending payment for the purpose of guarantees or payments of other security deposits, unless guarantee contract is performed or deductions occur due to default, shall be returned to the accounts for FX settlement and pending payment through the original route. Fourth, use of foreign exchange receipts under the capital account by domestic institutions shall comply with the authenticity and self-use principle and not go beyond the business scope A domestic institution's foreign exchange receipts under the capital account and RMB funds gained from foreign exchange settlement could be used as expenses under the current account within its business scope as well as legitimate expenses under the capital account. A domestic institution shall comply with the following regulations in using foreign exchange receipts under the capital account and the RMB funds gained from foreign exchange settlement: (I) They shall not be used directly or indirectly as the expenses beyond the business scope or the expenses prohibited by laws and regulations; (II) Unless otherwise expressly specified, they shall not be used directly or indirectly in securities investment or other investment and wealth management than banks' principal guaranteed products; (III) They shall not be used to issue loans to non-associated companies, except the cases expressly allowed in the business scope; (IV) They shall not be used to build or buy non-self-use real estate (excluding real estate developer). Where a domestic institution and other parties have entered into a contract with regard to the use scope of receipts under the capital account, relevant funds shall not be used beyond the scope as agreed upon in the contract. Unless otherwise specified, any contract between a domestic institution and other parties shall not conflict with this Circular. Fifth, standardizing payment management with regard to receipts under the capital account and funds from settlement of foreign exchange (I) A domestic institution shall fill out the Order on Payment with Funds under the Capital Account (see Appendix) when going through foreign exchange settlement or make payments with receipts under the capital account. Where RMB funds from foreign exchange settlement are directly transferred into the account for FX settlement and pending payment, a domestic institution does not need to present to a bank any materials evidencing the purposes of funds. A domestic institution, when applying for making payments with the receipts under the capital account, including directly making outward payments after settlement of foreign exchange, without transferring the money into the account for FX settlement and pending payment, making outward payments in RMB through the account for FX settlement and pending payment, or making outward payments in foreign exchange directly through the foreign exchange account under the capital account, shall present to a bank the authenticity supporting materials that are related to the purposes of funds. (II) The banks shall, according to the business development principles of “knowing your customers,” “understanding your businesses,” and “due diligence reviews,” be responsible for verification of the authenticity of settlement and payment of foreign exchange receipts under the capital account for domestic institutions. When handling each payment with such funds, the authenticity and compliance of the supporting documents with respect to the prior payment transaction shall be examined. The banks shall keep the supporting documents relevant to the settlement and use of the foreign exchange receipts under the capital account of domestic institutions for five years for future reference. The banks shall report the data, including the accounts related to the capital accounts, domestic asset realization accounts, domestic reinvestment account, special account for external debt, special account for overseas listing, other accounts under the capital account and accounts related to account for FX settlement and pending payment (account nature code: 2113), cross-border receipts and payments, domestic transfers, foreign exchange settlement and sales within the accounts, on a timely basis and in accordance with the Circular of the State Administration of Foreign Exchange on Issuing the Standards Version 1.0 for Collecting Data on Foreign Exchange Transactions by Financial Institutions (Huifa No. 18 [2014]). In case of transfers of funds between the accounts for FX settlement and pending payment and other RMB accounts, the information on the domestic transfers shall be reported by filling in the documents for domestic payments and receipts and indicating the fund purpose code under the “invoice number” column (according to “7.10: Code of Purpose for Foreign Exchange Settlement” in the Circular Huifa No. 18 [2014]) ; the transaction code for other transfers than that for payments under verification of trade in goods shall be indicated as “929070”. (III) When domestic institutions fail to provide documents evidencing the authenticity for special reasons at the moment, the banks may make payments for the enterprises, provided that the obligation of due diligence investigation has been performed and the authentic background of the transactions has been verified, and may file with the foreign exchange authority through its business system with respect to the special issues on the date of payment. Banks shall collect and examine the full set of relevant supporting documents resubmitted by the domestic institutions within 20 working days upon completion of the payment and report to the foreign exchange authority through relevant business system with respect to the resubmission of the documents evidencing the authenticity of the filing of special issues. Where domestic institutions use receipt under the capital account for the purpose of reserve funds, the banks may not require submission of the aforesaid documents evidencing authenticity. The cumulative amount of payments for reserve funds by a single institution each month (including discretionary settlement of foreign exchange and foreign exchange settlement upon payment) shall not exceed an equivalent of USD 200,000. Where a domestic institution applies for settlement upon payment with all foreign exchange receipts under the capital account on a one-off basis, or payments with all the RMB funds in the account for FX settlement and pending payment, but fails to provide relevant documents evidencing the authenticity, the bank concerned shall not handle the foreign exchange settlement and payment for the institution. Sixth, further strengthening ex-post supervision and investigation of irregularities by foreign exchange authorities (I) The foreign exchange authorities shall strengthen the guidance and examination on the compliance of banks in handling such business as settlement, payment and utilization of receipts under the capital account for domestic institutions in accordance with relevant regulations including the Regulations of the People’s Republic of China on Foreign Exchange Administration (Decree No. 532 of the State Council), Circular of the State Administration of Foreign Exchange on Promulgating the Measures for Administration of External Debt Registration (Huifa No. 19 [2013]), Circular of the State Administration of Foreign Exchange on Printing and Distributing the Provisions on Foreign Exchange Administration of Domestic Direct Investments by Foreign Investors and the Supporting Documents (Huifa No. 21 [2013]), Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Administration of Overseas Listings (Huifa No. 54 [2014]). The manner of examination includes request for submission of written explanatory and transaction documents by relevant entities, an interview with the persons in charge, field inspections or duplication of relevant documents of the entities, and notification of any irregularities. (II) For domestic institutions and banks with violations against this Circular with respect to foreign exchange settlement, payment and utilization of receipts under the capital account, the foreign exchange authorities shall investigate and treat them according to the Regulations of the People's Republic of China on Foreign Exchange Administration and other relevant provisions. Any bank that maliciously or seriously violates regulations may be duly required to suspend foreign exchange settlement and sales under the capital account. Any domestic institution that maliciously or seriously violates regulations may be disqualified for handling discretionary settlement of foreign exchange in accordance with the law, or have its businesses controlled by the SAFE capital account information system. Further, no services shall be provided to it with regard to other businesses under the capital account or no cancelation of business control made before they present the written notes and make rectifications. This Circular will come into effect as of the date of issuance. For the previous regulations such as the Circular of the State Administration of Foreign Exchange on Promulgating the Measures for Administration of External Debt Registration (Huifa No. 19 [2013]), Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Administration of Overseas Listings (Huifa No. 54 [2014]), Circular of the State Administration of Foreign Exchange Concerning Reform of the Administrative Approaches to Settlement of Foreign Exchange Capital of Foreign-invested Enterprises (Huifa No. 19 [2015]), Circular of the State Administration of Foreign Exchange on the Printing and Distributing of the Regulations on the Centralized Operation and Management of the Foreign Exchange Funds of MNCs (Huifa No. 36 [2015]), if there is any discrepancy between the above regulations and this Circular, this Circular shall prevail. Upon receipt of this Circular, the SAFE branches and foreign exchange administrative departments should immediately forward it to the central sub-branches, sub-branches, urban commercial banks, and foreign banks within their respective jurisdiction. All the designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it to their respective branches and sub-branches under their jurisdiction as soon as possible. Please contact the Capital Account Administration Department of the SAFE in a timely manner if any problems are encountered in implementation of this Circular. Appendix: Order on Payment with Funds under the Capital Account State Administration of Foreign Exchange June 9, 2016 FILE: Order on Payment with Funds under the Capital Account 2016-12-19/en/2016/1219/1301.html
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The Shanghai headquarters, branches, business management departments of the People’s Bank of China (PBC), and central sub-branches of the PBC in the capital cities of provinces (autonomous regions) and in sub-provincial cities; 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, and the branches of the SAFE in cities specifically designated in the state plan; China Development Bank, all policy banks, state-owned commercial banks, and joint-stock commercial banks and Postal Savings Bank of China, In order to regulate the management of domestic securities investment by RMB qualified foreign institutional investors (RQFIIs), relevant issues are notified as follows, in accordance with the Measures for the Pilot Program on Domestic Securities Investment by RMB Qualified Foreign Institutional Investors (Decree No. 90 of the China Securities Regulatory Commission, the People’s Bank of China, and the State Administration of Foreign Exchange), and relevant provisions: I. The PBC, SAFE and their branches and sub-branches shall supervise, manage and inspect RQFIIs' investment quota (investment quota), capital account, capital receipts and payments in accordance with the law. II. An RQFII approved by the China Securities Regulatory Commission (CSRC) to invest in domestic securities markets shall entrust its domestic custodian (custodian) with handling the procedures set forth in the Circular. An RQFII can mandate no more than three custodians. In the event of many custodians, the RQFII shall designate one custodian as the primary rapporteur (Only one custodian, if available, is the primary rapporteur as default) to be responsible for going through investment quota record filing, approval application and main information registration on behalf of the RQFII. III. The SAFE shall organize record filing or approval management with regard to the investment quota of a single RQFII. The RQFII, after obtaining the qualification from the CSRC, may obtain an investment quota (basic quota) no higher than a certain proportion of its assets or the securities assets under management ("asset size") through record filing; application of an investment quota higher than the basic quota is subject to approval by the SAFE. The investment quotas to institutions such as overseas sovereign wealth funds, central banks and monetary authorities are not required to be within a certain proportion of assets. They may obtain an investment quota based on their needs to invest in domestic securities markets, and will be subject to record filing management. IV. Criteria of basic quotas for RQFIIs: 1. Where the assets or AUM of an RQFII or the group it is subordinated to are located overseas, the formula is: equivalent of USD 100 million + average asset size over the past three years ＊0.2% - quota for the QFII already obtained (in RMB terms, "QFII quota"). 2. Where the assets or AUM of an RQFII or the group it is subordinated to are located in China, the formula is: RMB 5 billion + asset size of the previous year＊80% - QFII quota already obtained (in RMB terms). The foreign exchange rate involved above shall be calculated based on the conversion rates of various currencies against the USD published by the SAFE on the day of application for the previous month. The PBC and SAFE may adjust these criteria in consideration of balance of payments, and development and liberalization of capital markets. V. For record filing of an investment quota within the basic quota for an RQFII, the following submissions shall be provided to the primary rapporteur: 1. Description of the record filing of an investment quota, and the filled-out Registration Form for RMB Qualified Foreign Institutional Investors (see Appendix 1) 2. Audited balance of sheet of the RQFII for the past three years or the previous year (or audit report on securities assets under management, etc.) 3. Photocopy of qualification certificate from the CSRC. The primary rapporteur shall earnestly perform his/her responsibilities, carefully reviewing the materials evidencing the RQFII's assets size and QFII quota already obtained, and verifying the basic quota and the investment quota intended for record filing by relevant standards and based on the distribution of assets of its own or the group it is subordinated to, and collectively submit the record filing materials for the RQFII quota to the SAFE prior to the 10th day of every month (see Appendix 2 for format). The SAFE shall confirm the record filing materials and give feedback to the primary rapporteur. VI. For application for an investment quota beyond the basic quota for an RQFII, the following submissions shall be provided to the SAFE through the primary rapporteur: 1. Written applications of the primary rapporteur and the RQFII, detailing the reasons for increasing the quota and the use of existing quota. 2. Information of Record Filing Form for RQFII's Custodian (see Appendix 3 for format). 3. Audited balance of sheet of the RQFII for the past three years or the previous year (or audit report on securities assets under management, etc.) (4) Other materials required by the SAFE. An RQFII shall properly distribute the quotas between the primary rapporteur and other custodians, and effectively implement the requirements on quota management. The SAFE will regularly publish the information on the RQFIIs' investment quotas at its website, www.safe.gov.cn. VII. Where an RQFII that has obtained its investment quota before this Circular is issued applies for an additional investment quota, the following procedures shall be complied with: 1. The investment quota already obtained is within the basic quota: if the quota already obtained plus the extra quota applied for is within the basic quota, Article V herein shall be followed in record filing; if the quota already obtained plus the extra quota applied for is beyond the basic quota, application shall be made to the SAFE for approval in accordance with Article VI herein. 2. Where the investment quota already obtained is beyond the basic quota, application shall be made to the SAFE for approval in accordance with Article VI herein. VIII. The investment quota for RQFIIs is subject to balance management. This means that the RQFII's accumulated net inward remittances shall not surpass the already filed or approved investment quota. IX. Except open-end funds, the lock-up period of the principal of other products or funds of the RQFII is 3 months. The lock-up period shall be calculated as of the date when the RQFII's accumulated inward remittances as investment principal hits RMB 100 million. The aforesaid lock-up period refers to the period in which RQFIIs are prohibited from remitting the principal abroad. X. No RQFII shall sell or transfer the investment quota in any form to any other institution or individual. In case that an RQFII fails to effectively use the investment quota within one year following the day the quota is filed or approved, the SAFE shall have the right to recover the investment quota not yet used, in all or in part. XI. RQFIIs shall open a basic RMB deposit account for foreign institutions, in accordance with the Management Measures for RMB Bank Settlement Account for Foreign Institutions (Yinfa No. 249 [2010]), and the Circular of the People's Bank of China on Opening and Using RMB Bank Settlement Account for Foreign Institutions (Yinfa No. 183 [2012]). After opening a basic RMB deposit account, the RQFII shall open with a domestic commercial bank with the qualification for a QFII custodian a special deposit account for trading funds in the securities market of an exchange, and a special deposit account for settlement of trading funds in the interbank bonds markets, to be used for investing in the securities market of an exchange and the interbank bonds markets. Any RQFII who participates in stock index futures trading may open a special deposit account with a futures margin deposit and custodian bank for the settlement of the deposit of stock index futures. When opening such an account, the RQFII shall distinguish self-owned funds and AUM and open a separate account for each; A separate account for each open-end fund shall be opened. XII. An RQFII shall submit the following materials for opening a special deposit account: 1. Photocopy of the CSRC's qualification certificate for RQFIIs. 2. Record filing information or reply from the SAFE on quota. 3. Written custody qualification documents from a custodian bank. 4. Custody agreement between the RQFII and custodian bank. 5. Other documents required by the PBC. RQFIIs shall refer to the provisions in the Announcement No. 3 [2016] of the People’s Bank of China in investing in the interbank bonds markets. To open a special deposit account for settlement of trading funds in the interbank bonds markets, an RQFII shall also present the record filing notice for entry into the interbank bonds markets, and the written document on the custodian's qualification for commissioned settlement in the interbank bonds markets. XIII. The scope of receipts into an RQFII's special deposit account covers investment principal remitted from overseas by the RQFII, its gains from sales of securities, cash dividends, interest income, funds transferred from other special deposit accounts opened under this Circular, and other receipts prescribed by the PBC and SAFE. The scope of payments from an RQFII's special deposit account covers payment for securities bought, principal remitted outward, returns on investment, payment of investment-related taxes, funds transferred to other special deposit accounts opened under this Circular, and other spending prescribed by the PBC and SAFE. XIV. No transfer shall be allowed between an RQFII's special deposit accounts and other accounts it opened in China without approval; no transfer shall be allowed between the account for self-owned funds, the account for client funds and each account for open-end funds. Without approval, the funds in the RQFII's special deposit account shall not be used for purposes other than domestic securities investment. No cash shall be drawn from the RQFII's special deposit account. XV. The deposit rate of the funds in the bank settlement account an RQFII opens under this Circular is subject to the provisions developed by the PBC. XVI. In case of the following cases, an RQFII shall realize its assets and close its accounts within one month, with the corresponding investment quota nullified: 1. Its qualification has been revoked by the CSRC. 2. The SAFE cancels the investment quota of the RQFII in accordance with the law. 3. Other circumstances prescribed by the PBC and SAFE. XVII. For the open-end funds initiated by an RQFII, its custodian may handle the inward and outward remittances in RMB for it every day, based on the netting subscribed or redeemed. For other products or funds, the RQFII may entrust a custodian with handling the inward and outward remittances after the lock-up period expires. The custodian may handle the outward remittance of the realized accumulated income for the RQFII, based on the RQFII's written application or instruction, special audit report on returns on investment issued by Chinese certified accountants, and tax clearance or tax record filing certificates, if any. XVIII. A custodian, when handling inward and outward remittances for an RQFII, shall conduct the authenticity and compliance review of related receipts and payments, and perform its obligations of anti-money laundering and anti-terrorism. XIX. RQFIIs shall apply for a special institution code and undergo RQFII main information registration with the foreign exchange authority that governs the primary rapporteur within 10 working days after obtaining the investment quota for the first time via the primary rapporteur. Those that have obtained the special institution code in going through other cross-border or foreign exchange receipts and payments need not apply again. The custodian shall report the regulation and statistics data of the RQFII in accordance with the Circular of the State Administration of Foreign Exchange on Adjusting the Way of Data Reporting for QFIIs (Huifa No. 45 [2015]). XX. Where one of the following circumstances occurs to an RQFII, the primary rapporteur shall apply to the SAFE for alteration registration within 5 working days: 1. Major information of the RQFII such as its name and custodian changes. 2. Other circumstances prescribed by the PBC and SAFE. In case of the change of the primary rapporteur, the new primary rapporteur shall go through alteration registration for the RQFII. Where the RQFII or its major shareholders or actual controller face significant penalties by other regulatory authorities (including foreign authorities), and the penalties have a strong impact on the RQFII's investment operations, or lead to suspension or cancellation of its business qualifications, the primary rapporteur shall immediately report to the PBC and the SAFE. XXI. The custodian shall report an RQFII's account opening and cancellation, investment quota, cross-border capital receipts and payments, and asset allocation for domestic securities investment to the RMB cross-border receipts and payments information management system within 5 working days after the deal is made. XXII. The materials submitted as requested by this Circular shall be in Chinese. Should there be counterparts in both Chinese and a foreign language, the Chinese text shall prevail. XXIII. This Circular will come into force as of the date of issuance. In the meanwhile, the Circular of the People's Bank of China on Implementing the Pilot Program on Domestic Securities Investment by RMB Qualified Foreign Institutional Investors (Yinfa No. 105 [2013]), the Circular of the State Administration of Foreign Exchange on the Pilot Program on Domestic Securities Investment by RMB Qualified Foreign Institutional Investors (Huifa No. 9 [2013]) and the Circular of the Capital Account Management Department of the State Administration of Foreign Exchange on Issuing the Operating Guidance on Managing Investment Quotas of RMB Qualified Foreign Institutional Investors (Huizihan No. 2 [2014]) will be appealed. Appendices: 1. Registration Form for RMB Qualified Foreign Institutional Investors 2. Investment Quota Form 3. Information Record Filing Form for RQFII's Custodian People's Bank of China, State Administration of Foreign Exchange August 30, 2016 2016-11-08/en/2016/1108/1299.html
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On August 17, the State Administration of Foreign Exchange (SAFE) held the 2017 seminar with banks and financial companies in Beijing to implement the gist of the National Financial Work Conference, analyze the current state of foreign exchange markets, and announce recent foreign exchange irregularities among banks. Pan Gongsheng, secretary of the CPC Leadership and administrator of the SAFE, delivered a speech and Yang Guozhong, deputy administrator of the SAFE, chaired the meeting, with attendees including heads of the bodies of the SAFE, policy banks, state-owned commercial banks, joint-stock commercial banks and a selection of urban commercial banks as well as financial companies. The participants in the meeting unanimously agreed that the National Financial Work Conference is a significant meeting in the run-up to the 19th CPC National Congress, and shows that the CPC Central Committee attaches great importance to financial work. In his speech, Secretary-general Xi Jinping took a holistic view to analyze the current financial conditions based on the laws of financial development, and describe the guidelines, principles and priorities of financial work under the new normal of economic development. He also gave a full account of how to enhance the efficiency and level of finance serving the real economy, proactively prevent and address systematic financial risks, be determined to deepen the financial reform and expand the liberalization of finance, and strengthen and improve the leadership of the Party in financial affairs. This speech is a key reference and guideline for how to ensure financial work, and promote benign circulation and healthy development of the economy and finance under the new circumstances. The meeting required that efforts should be made to study and implement the decisions and plans of the CPC Central Committee with Comrade Xi Jinping at its core on financial work, strengthen the consciousness of the need to maintain political integrity, think in big-picture terms, uphold the leadership core, and keep in alignment, and integrate the thoughts into the judgment of the CPC Central Committee on financial conditions. The policies and guidelines formulated by the CPC Central Committee shall be unswervingly implemented, and three tasks, namely, serving the real economy, prevention and control of financial risks and deepening the financial reform, shall be carried out, so as to create a favorable environment for the 19th CPC National Congress. According to Pan Gongsheng, China's economy has developed steadily with a more remarkable momentum for growth and market expectations have been further stabilized since the beginning of this year, boosting the strong recovery of China's foreign exchange markets, and the stability of China's cross-border capital flows. As the 19th CPC National Congress draws near, which is to be convened in the second half of this year, foreign exchange authorities will focus on serving the real economy and China's reform and opening up to further enhance cross-border trade and investment facilitation amid its efforts to serve the real economy, prevent and control financial risks and deepen the financial reform. They will also be committed to guarding against cross-border capital flow risks and safeguarding the stability of foreign exchange markets, in a bid to create a healthy, benign and stable market environment for the reform and opening up. The policy for foreign exchange administration will be focused on: first, upholding reform and opening up and refining the foreign exchange policy framework; second, boosting capital account convertibility prudentially and systematically; third, establishing a system for macro-prudential administration of cross-border capital flows and for micro market regulation; fourth, improving the RMB exchange rate formation mechanism to enhance the elasticity of the exchange rate. Pan Gongsheng stressed that, banks and financial companies, the first-line service windows for foreign exchange business and a bond for the conduction mechanism of foreign exchange policy, are crucial to sustaining the healthy development of foreign exchange markets. They are required to enhance the efficiency and level of their endeavor to serve the real economy in all respects, make the most of their roles in the allocation of foreign exchange resources, serve and support the country's opening-up strategy, and facilitate market participants' use of both domestic and foreign markets to satisfy customers' reasonable requirements for trade and investment. By following the foreign exchange administration policies, they shall refine the self-discipline mechanism for foreign exchange markets, implement the operation requirements of foreign exchange business and rationally guide market expectations. They shall also raise their awareness of internal controls, with a focus on strengthening the education on the code of internal professional ethics and on laws and regulations, intensifying management of foreign exchange workforce, performing the responsibilities for authenticity and compliance review, and work with regulators to crack down on and contain foreign exchange irregularities, in an attempt to maintain the equilibrium of the balance of payments and boost the benign circulation and healthy development of the economy and finance. Representatives of banks and financial companies present said they would work hard and be responsible to better serve the real economy, and maintain the health and stability of foreign exchange markets and the country's economic and financial security to embrace the 19th CPC National Congress with remarkable accomplishments. Following the gist of the National Financial Work Conference, Administrator Pan Gongsheng comprehensively analyzed the trends of foreign exchange markets at present and in the near future, especially the policy orientation of foreign exchange administration, namely, two directions and four connotations with a focus on foreign exchange issues in eight aspects that banks and financial companies shall pay attention to, and raised requirements on relevant tasks. With a clear orientation and specific requirements, Pan's speech shall be carefully studied and implemented. In particular, operation shall be standardized to effectively communicate foreign exchange administration policies and rationally guide market expectations. Banks and financial companies shall also work hard and discharge their responsibilities to maintain the health and stability of foreign exchange markets and China's economic and financial security, so as to be poised for the upcoming 19th CPC National Congress with significant achievements. 2017-08-17/en/2017/0817/1295.html
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The branches and foreign exchange administration 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, In response to the Central Government's and the State Council's requirements on accelerating the transformation of government functions, pushing forward administration streamlining, power delegation, combination of decentralization and regulation, and service optimization, stabilizing growth, promoting reform, adjusting restructure and benefiting people, as well as comprehensively sorting out regulations and policy documents, and to further promote trade and investment facilitation, the effectiveness of selected regulatory documents on foreign exchange administration is notified as follows: I. With agreement of the Ministry of Finance, the Circular of the State Administration of Foreign Exchange and the Ministry of Finance on Adjusting the Table of Foreign Exchange Issues for Annual Inspection of Foreign Exchange Business of Foreign-Invested Enterprises (Huifa No. 124 [2002]) is abolished. II. The following two regulatory documents, with the main content replaced by new content and not conforming to current management practices, are abolished: (I) Circular of the State Administration of Foreign Exchange on Distributing the Streamlining Status of Foreign Exchange Statements (Huifa No. 12 [2004]); (II) Circular of the State Administration of Foreign Exchange on Starting Use of Relevant Vouchers of Domestic Banks for Foreign-related Receipts and Payments and Clarifying the Relevant Requirements on Data Submission (Huifa No. 42 [2012]). III. The following 11 regulatory documents on foreign exchange administration whose applicable period has expired or objects of adjustment have disappeared are nullified: (I) Reply of the State Administration of Foreign Exchange on Issues Concerning Foreign Exchange Settlement for Income from B-Share Investments by Domestic Individual Investors (Huifu No. 283 [2007]); (II) Circular of the State Administration of Foreign Exchange on the Examination and Ratification of Short-term External Debt Quotas of Financial Institutions for 2009 (Huifa No. 14 [2009]); (III) Circular of the State Administration of Foreign Exchange on Issues Concerning Distributing the 2010 Quotas for Outstanding Short-term External Debt (Huifa No. 18 [2010]); (IV) Circular of the State Administration of Foreign Exchange on Issues Concerning the Ratification of the 2011 Quotas for Outstanding Short-term External Debt of Domestic Institutions (Huifa No. 14 [2011]); (V) Circular of the General Affairs Department of the State Administration of Foreign Exchange on Relevant Work Concerning Launching the Pilot Foreign Exchange Monitoring System for Trade in Goods (Huizongfa No. 125 [2011]); (VI) Circular of the State Administration of Foreign Exchange on Issues Concerning the Ratification of the 2012 Quotas for Outstanding Short-term External Debt of Domestic Institutions (Huifa No. 12 [2012]); (VII) Circular of the General Affairs Department of State Administration of Foreign Exchange on Relevant Items Concerning Carrying out the Acceptance and Joint Debugging of Bank Data Interface Program on the Online Balance of Payments Declaration System (Huizongfa No. 14 [2012]); (VIII) Circular of the State Administration of Foreign Exchange on Issues Concerning the Ratification of the 2013 Quotas for Outstanding Short-term External Debt of Domestic Institutions (Huifa No. 6 [2013]); (IX) Circular of the State Administration of Foreign Exchange on Issues Concerning the Ratification of the 2014 Quotas for Outstanding Short-term External Debt of Domestic Institutions (Huifa No. 14 [2014]); (X) Circular of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Content of Assessment and Scoring Criteria of Banks in Implementing the Provisions on Foreign Exchange Administration (2014) (Huizongfa No. 52 [2014]). (XI) Reply of the General Affairs Department of the State Administration of Foreign Exchange Concerning Simplifying Documents and Improving the Foreign Exchange Administration of Individual Trade by the SAFE Branches in Fujian and Zhejiang (Huizongfu No. 40 [2014]). IV. “Settlement of foreign exchange shall be handled based on the export agent contract or agreement signed with the agent and the agent's Customs declaration for exports” in Subparagraph 2 of Article 9 of the Appendix " Detailed Rules on Implementation of the Measures for the Administration of Individual Foreign Exchange" to the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Detailed Rules on Implementation of the Measures for the Administration of Individual Foreign Exchange (Huifa No. 1 [2007]) is modified as "Settlement of foreign exchange shall be handled based on the contract or the commercial documents issued by the logistics company." The Circular will come into force on the day of promulgation. Upon receipt of this Circular, all branches and foreign exchange administrative departments of the SAFE shall immediately forward it to the central sub-branches, sub-branches, urban and rural commercial banks and foreign banks; and all designated Chinese-funded foreign exchange banks shall forward it to their branches and sub-branches as soon as possible. Please follow the Circular in your implementation. State Administration of Foreign Exchange May 29, 2016 2016-11-08/en/2016/1108/1297.html
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The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange sales and settlements and banks' foreign-related payments and receipts for customers for July 2017, and its press spokesperson answered media questions on recent cross-border capital flows. Q: China's cross-border capital flows remained steady in the first half, with a good momentum for growth. Could you brief us on China's cross-border capital flows for July? A: China's cross-border capital flows maintained a basic equilibrium in July. First, the supply and demand of foreign exchange remained balanced in China. In July, banks registered a deficit of USD 15.5 billion in foreign exchange settlements and sales, down by 26% month on month. In particular, a deficit of USD 6.3 billion was recorded in banks' foreign exchange settlements and sales for customers, down by 53%. In the same month, the value of foreign exchange contracted for forward settlements and sales recorded a surplus for fourth consecutive month, which was USD 2.6 billion. Under the combined impact of banks' spot and forward foreign exchange settlements and sales, and foreign exchange supply and demand factors such as options, a better equilibrium between the supply and demand of foreign exchange was maintained in China in the month than in the prior two months. Second, the deficit in foreign-related payments and receipts of non-banking sectors remained steady. In the month, the deficit was USD 22 billion, consistent with that of May and June. To be specific, the deficit of foreign-related receipts and payments in RMB and foreign currencies registered USD 13.8 billion and USD 8.2 billion respectively. Moreover, China's foreign exchange reserves as at the end of July, which were unveiled on August 7, had climbed for 6 consecutive months and amounted to USD 3.0807 trillion, representing a month-on-month increase of USD 23.9 billion. Domestic participants witnessed more stable and orderly foreign-related receipts and payments. First, market participants' desire to settle foreign exchange stayed stable while their desire to purchase foreign exchange was weakened. In July, the ratio of banks' foreign exchange settlements for customers to foreign-related foreign exchange receipts was 62%, down by 1 percentage point; the ratio of banks' foreign exchange purchases for customers to foreign-related foreign exchange payments was 63%, down by four percentage points month on month. Second, enterprises' enthusiasm for funding in foreign currencies was strengthened stably. In July, China continued to see stable growth in the outstanding external debt registered; and the foreign exchange purchased by enterprises to repay domestic foreign exchange loans hit a new low in recent years, down by 46% month on month. Third, foreign exchange purchased by individuals dropped. Since the beginning of this year, as market expectations are further stabilized, individuals' use of foreign exchange has become more reasonable and orderly. In July, foreign exchange purchased by individuals went down by 35% month on month and 27% year on year. Since the beginning of this year, China's economy has been more stabilized with a good momentum for stronger growth, and market expectations have become further stabilized, boosting remarkable improvement in China's foreign exchange situations. Going forward, China's cross-border capital flows will remain stable, economic fundamentals will be more supportive, expansion and further opening of domestic markets is expected to deliver stronger outcomes, and domestic market participants' adjustment of external assets and liabilities will be more stable. 2017-08-16/en/2017/0816/1294.html
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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, and the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and all designated Chinese-funded foreign exchange banks: To further facilitate foreign exchange receipts and payments under trade in goods, and satisfy the demand of the designated foreign exchange banks (bank) and domestic institutions (enterprise) for handling foreign exchange business through the Internet, the State Administration of Foreign Exchange (SAFE) has formulated the Guidelines on Reviews of Electronic Documents for Foreign Exchange Receipts and Payments under Trade in Goods (Guidelines, see appendix for details) and hereby issues it to you for implementation. Relevant issues are notified as follows: I. Starting from November 1, 2016, banks may review the electronic documents of qualified enterprises in handling foreign exchange receipts and payments under trade in goods, in accordance with the existing provisions on foreign exchange administration for trade in goods, as well as the Guidelines. II. Upon receipt of this Circular, the SAFE branches and foreign exchange administrative departments should immediately forward it to the central sub-branches (sub-branches), local commercial banks, and foreign banks within their respective jurisdiction, and all Chinese-funded banks should promptly forward it to their branches. Please report any problems encountered in the implementation to the SAFE in time. Appendix: Guidelines on Reviews of Electronic Documents for Foreign Exchange Receipts and Payments under Trade in Goods State Administration of Foreign Exchange September 28, 2016 FILE: Guidelines on Reviews of Electronic Documents for Foreign Exchange Receipts аnd Payments under Trade in Goods 2016-09-28/en/2016/0928/1296.html
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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 of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo, and national Chinese-funded banks: Given the changes and adjustments to the provisions on foreign exchange administration from June 2015 to the present, the SAFE has formulated the Contents and Scoring Criteria for the Assessment of Banks’ Implementation of Regulations on Foreign Exchange Administration (2016) (see the Appendix). The relevant issues are hereby notified as follows: 1. The contents and scoring criteria for the assessment of banks’ implementation of regulations on foreign exchange administration for the year 2016 (from October 1, 2015 to September 30, 2016) are subject to the contents of the Appendix to this Circular. 2. After receiving this Circular, all branches and foreign exchange administrative departments of the SAFE shall immediately forward this Circular to the central sub-branches, sub-branches, urban commercial banks, rural commercial banks, wholly foreign-funded banks, Chinese-foreign equity joint venture banks, branches of foreign banks, and rural cooperative financial institutions within their respective jurisdictions, and shall carry out fair and just assessments of the banks within their respective jurisdictions in implementing the regulations of foreign exchange administration in line with the revised contents and scoring criteria. 3. All national Chinese-funded banks shall forward this Circular to their branches within their respective jurisdictions as soon as possible, and conduct their various businesses in accordance with the relevant laws and regulations. If any problems are encountered during implementation, please report them to the relevant departments of the SAFE in a timely manner. Telephone numbers: 010-68402113 (General Affairs Department), 010-68402593 (Balance of Payments Department), 010-68402104 (Current Account Management Department), 010-68402127 (Capital Account Management Department), 010-68402378 (Supervision and Inspection Department) and 010-68402028 (Data Monitoring Center for Foreign Exchange Transaction). Appendix: Contents and Scoring Criteria for the Assessment of Banks’ Implementation of Regulations on Foreign Exchange Administration (2016) General Affairs Department of the State Administration of Foreign Exchange March 2, 2016 FILE: Contents and Scoring Criteria for the Assessment of Banks’ Implementation of Regulations on Foreign Exchange Administration (2016) 2016-12-19/en/2016/1219/1300.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (hereinafter referred to as the “SAFE”) of all provinces, autonomous regions, and municipalities directly under the Central Government; the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; To step up efforts to streamline laws and regulations on foreign exchange administration and to facilitate trade and investment, we hereby notify you of the validity of some regulatory documents on foreign exchange administration as follows: I. 18 regulatory documents, of which the main content has been replaced by new content and does not conform to current management practices, shall be abolished. Please refer to Annex 1 for a list. II. 9 regulatory documents on foreign exchange administration, of which either the application period has expired or the objects have ceased to exist, are rendered and declared invalid. Please refer to Annex 2 for a list. The Circular will take effect as of the date of promulgation. Annex: 1. Checklist of 18 Regulatory Documents on Foreign Exchange Administration Abolished by the State Administration of Foreign Exchange 2. Checklist of 9 Regulatory Documents on Foreign Exchange Administration Declared Invalid by the State Administration of Foreign Exchange State Administration of Foreign Exchange October 28, 2016 FILE: Checklist of 18 Regulatory Documents on Foreign Exchange Administration Abolished by the State Administration of Foreign Exchange FILE: Checklist of 9 Regulatory Documents on Foreign Exchange Administration Declared Invalid by the State Administration of Foreign Exchange 2016-12-19/en/2016/1219/1302.html