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China Southern Fund Management Co., LTD.'s purchasing quota of foreign exchange for overseas portfolio investment increased 2007-09-14/en/2007/0914/852.html
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China Southern Fund Management Co., LTD.'s purchasing quota of foreign exchange for overseas portfolio investment approved 2007-08-31/en/2007/0831/850.html
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Deutsche Bank AG's purchasing quota of foreign exchange for overseas investment services on behalf of its clients approved. 2007-08-24/en/2007/0824/847.html
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Harvest Fund Management Co.,LTD's purchasing quota of foreign exchange for overseas portfolio investment approved 2007-09-26/en/2007/0926/853.html
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China AMC's purchasing quota of foreign exchange for overseas portfolio investment increased 2007-09-26/en/2007/0926/854.html
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China AMC's purchasing quota of foreign exchange for overseas portfolio investment approved 2007-09-10/en/2007/0910/851.html
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1. Basic Information about the Qualified Foreign Institutional Investors System The Qualified Foreign Institutional Investors (QFII) system refers to an opening-up mode of the capital market whereby approved qualified foreign institutional investors are permitted to remit inwards foreign exchange funds and exchange them into local currencies, to invest in the local securities market with the exchanged funds via special accounts, and, with approval, to process outward remittances of their principal, capital gains, dividends, and so forth with the purchased foreign exchange. In November 2002, when the QFII system was formally implemented in China the China Securities Regulatory Commission and the Peoples Bank of China jointly promulgated the Provisional Regulations on the Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII). Since the first QFII was introduced in China in June 2003, QFII experiments have been steadily carried out. Implementation of the QFII system has played a positive role in introducing advanced investment theories, cultivating institutional investors, promoting market innovations, and so forth, and has facilitated the development of Chinas capital market. 2. Basic Information about the Qualified Domestic Institutional Investors System The Qualified Domestic Institutional Investors (QDII) system refers to an opening-up mode whereby qualified domestic institutional investors are permitted, within a certain quota approved by the regulatory authorities, to invest in overseas securities market via special accounts. In April 2006, the QDII system was approved and formally initiated. Currently, the QDII system includes three kinds of institutional businesses, i.e., overseas securities investment businesses such as overseas wealth management services on behalf of clients provided by commercial banks, overseas uses of insurance funds, and fund management companies. Implementation of the QDII system broadens the channels for overseas investment by domestic institutions and individuals and, in collaboration with the QFII system, jointly promotes regulation over the two-way flow of funds, thus facilitating an equilibrium in the balance of payments and improving the current setup in whereby official reserves dominate Chinas overseas financial assets. Up to the end of 2008, among Chinas overseas financial assets of USD 2 trillion, the share of foreign exchange reserves was about 75 percent, but during the corresponding period in Japan the ratio was only 20 percent. With implementation of the QDII system, the share of non-official overseas financial assets can be gradually increased. 3. What is the situation for investment quota approvals of QFIIs and QDIIs and for the inward/outward remittances of funds? By the end of August 2009, the SAFE had approved institutional investment quotas for 76 QFII, amounting to USD 15.32 billion, and they had remitted inwards a total of USD 13.846 billion. By the end of August 2009, the SAFE had approved overseas securities investment quotas for 56 QDII institutions, amounting to USD 55.951 billion, among which USD 33.565 billion was for 12 fund management companies and securities companies (hereinafter referred to as securities trading institutions), and the net outward remittance of QDII funds amounted to USD 28.711 billion, among which USD 14.495 billion was securities QDII funds. 4. How should the principles in the examination of the QFII investment quota be understood? The QFII system mainly aims at encouraging foreign medium- and long-term institutional investors to make securities investments in China, so during the quota examination, we give priority to prioritize applications from institutional investors such as pension funds, insurance funds, mutual funds, charity funds, donation funds, and government and currency administrative authorities. During the early stage of the QFII experiment, due to the relatively high requirements for approval, institutions that applied for QFII qualifications were usually large-sized institutions with a good reputation, so to some extent we favored their investment quota in order to guarantee the stability of the QFII funds. Later, examination of the QFII quota was conducted in a basically balanced manner, mainly in light of the QFII institutions asset size, asset allocations, investment management capability, past investment performance, and so forth. 5. What is the main content of the Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII)? What are the improvements when compared with the 2002 Provisional Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII)? The Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) (hereinafter referred to as the Regulations) encompass 6 chapters and 27 articles, including mainly general provisions, investment quota administration, account administration, exchange management, statistics and administration, and supplementary provisions. Compared with the 2002 Provisional Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII), the Regulations exhibit the following improvements: first, the ceiling for the investment quota of a single QFII institution is raised from USD 800 million to USD 1 billion; second, QFII institutions are permitted to open fund accounts of different natures and types; third, the principal lock-up period for pension funds, donation funds, open-ended Chinese funds, and so forth for medium- and long-term investments is reduced to 3 months; fourth, the management principles for open-ended Chinese funds are specified, and many phases, such as the account opening, management of the lock-up period, exchange of funds, purchases and redemptions, are more convenient for the applicants. 6. What is the main content of the Circular of the State Administration of Foreign Exchange (SAFE) on Relevant Issues Concerning Foreign Exchange Administration of Overseas Securities Investments by Fund Management Companies and Securities Companies? The Circular of the State Administration of Foreign Exchange (SAFE) on Relevant Issues Concerning Foreign Exchange Administration of Overseas Securities Investments by Fund Management Companies and Securities Companies (hereinafter referred to as the Circular) encompasses 12 articles, including investment quota administration, foreign exchange account management, funds exchange management, statistics and monitoring, and so forth. On the one hand, the Circular simplifies the procedures and required materials necessary for securities trading institutions to apply for an overseas securities investment quota, thus shortening the procedure flow and improving efficiency. On the other hand, it specifies the principles for the balanced management of the overseas investment quota of securities trading institutions. Meanwhile, it also stipulates that securities trading institutions that are awarded an investment quota can invest in all kinds of overseas securities investment products approved by the regulatory authorities. Moreover, in order to avoid a situation whereby the securities trading institutions accept a quota but do not use it, the Circular stipulates that the SAFE has the right to reduce any investment quota that is not used effectively within 2 years. 7. How do the Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) apply to institutions that have been awarded a quota? Those QFII institutions that have been awarded a quota can file an application with the SAFE to open separate accounts so as to satisfy the requirements for differentiating the distinct sources of funds. Those QFII institutions that have transferred or resold their quota prior to promulgation of Regulations should report the relevant situation to the SAFE and end all such activities as of the date of promulgation. 8. What requirements are proposed for follow-up administration of QIIs by the Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) and the Circular of State Administration of Foreign Exchange (SAFE) on Relevant Issues Concerning Foreign Exchange Administration of Overseas Securities Investment by Fund Management Companies and Securities Companies? The Regulations and the Circular further enhance statistics, monitoring, and follow-up administration, including mainly the following improvements: first, the relevant reporting system is improved and the contents of the reports are enriched; second, the responsibilities regarding reporting and filing for QIIs and their custodians are specified; third, the obligation of reporting the balance of payments by the QII and its custodian is stipulated; fourth, the relevant principles and basis for punishment are specified; fifth, the daily administrative responsibilities by the local branches of the Administrations of Foreign Exchange are noted. 2009-11-13/en/2009/1113/905.html
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The Overseas Direct Investment Module of the Information System for Foreign Exchange Business of Direct Investment Will Be Popularized Nationwide Following the successful operation of the foreign direct investment module of the information system for foreign exchange business of direct investment (hereinafter referred to as the "FDI Module") across the country, another informatization measure, which will help raise the level of foreign exchange services, facilitate investments for enterprises, and strengthen risk monitoring and early-warning the overseas direct investment module of the information system for foreign exchange business of direct investment (hereinafter referred to as the "ODI Module") will be generalized and rolled out nationwide on January 1, 2009. Several days ago, the State Administration of Foreign Exchange held a meeting in Chongqing to study and arrange the work to promote the ODI Module; Li Dongrong, deputy administrator of this administration, attended the meeting and delivered a mobilization speech. As an integral part of the information system for foreign exchange business of direct investment, the ODI Module maintains the manner and characteristics of the FDI Module, enables on-line operations and management and data exchange among the administration, banks, enterprises, and accounting firms, and substitutes IC-card foreign exchange registration certificates for paper-based certificates. After operation of the ODI system, enterprises can directly apply to the administration via the network for overseas equity investment, overseas lending, corporate investment for special purposes, and other business and will be informed in a timely manner of the progress of their business through the network. Banks, accounting firms, and other institutions may receive management information from the administration through the network and may transfer the business filing conditions to the administration, while the administration can deal with the related electronic information of banks, accounting firms, and enterprises through the network in a timely manner, and comprehend all overseas investment data and situations in a real-time way, so as to achieve an overall change in the ways of handling foreign exchange business of overseas investments from a manual and paper-based manner to an electronic and IT-based manner. The operation and use of the ODI Module is adapted to the trend of a gradual rise in the amount, regional expansion, and field extension of Chinas overseas investments, having great significance in further upgrading the level of foreign exchange services for overseas investment, facilitating investments for enterprises, and making full use of the Chinese and foreign markets. The electronic processing of the foreign exchange business for overseas investments will considerably enhance the business processing efficiency, avoid the work of enterprise personnel having to travel, and reduce corporate investment costs, so that the enterprises will able to strive for favorable overseas investment opportunities and will be able to grow much larger and stronger abroad. The operation and use of the ODI Module will also effectively improve the statistical approaches for overseas investments, realize real-time capital-flow monitoring of overseas investments, and increase the accuracy of monitoring over cross-border capital flows, which will help the foreign exchange management departments master the objective conditions in a timely manner and rapidly conduct situational analyses and make judgments regarding decision-making scientifically against the backdrop of the current complex and volatile economic situation (End). 2008-12-31/en/2008/1231/882.html
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To implement the newly revised Regulations on the Foreign Exchange System of the People's Republic of China (hereinafter referred to as the "Regulations"), the State Administration of Foreign Exchange (SAFE) recently held a system-wide teleconference, which was presided over by Hu Xiaolian, administrator of the SAFE, and was attended by Song Dahan, deputy director of the Legislative Affairs Office of the State Council, who gave a speech. Song Dahan first introduced the legislative background, principles, main content, and other items regarding the Regulations. He pointed out that aiming to facilitate trade and investment activities and to promote an equilibrium in the balance of payments and the healthy development of the national economy, the Regulations provide balanced management of capital inflows and outflows of foreign exchange, perfect the RMB exchange rate formation mechanism and the administrative systems for the foreign exchange business of financial institutions, establish an emergency security system for the balance of payments, intensify monitoring of cross-border capital flows, and improve exchange regulatory means and other measures and make clear the corresponding legal responsibilities. The revisions and implementation of the Regulations are specific measures to carry out the spirit of the 17th National Party Congress and the government work report and have great significance to facilitate trade and investment, strengthen and improve foreign exchange administration, promote an equilibrium in the balance of payments, maintain sustained, steady, and rapid economic development, and guard against international economic and financial risks. Hu Xiaolian made arrangements for the deployment of the next implementation-related work. She required that foreign exchange administrations at all levels unify their thinking, enhance understanding, and strengthen the initiative and consciousness to implement the Regulations. They should focus on the following points during studying and carrying out the Regulations: the first is to properly handle the relationship between promoting facilitation of trade and investment and intensification of management; the second is to advance with the times and focus on resolving the principal contradictions and main issues which currently affect the steady and rapid development of the national economy, macro-control effects, and the equilibrium in the balance of payments, especially with regard to settling the long-standing situation in the past of weak management of foreign exchange inflows so as to achieve balanced management; the third is all along to prevent international economic risks, in particular, to prevent those activities that harm the healthy development of Chinas national economy through exchange channels and BOP channels; and the fourth is to adhere to administration by law and inclusion of management of services according to the basic requirements of the administrative system reform. (End) 2008-08-11/en/2008/0811/875.html
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For the purpose of improving tax collection and administration as well as examination management of the authenticity of foreign exchange payments under the services trade, income and current transfers, etc., the State Administration of Foreign Exchange (SAFE) and the State Administration of Taxation (SAT) recently jointly distributed the Circular on Issues Concerning the Submission of Tax Certificates for External Payments under the Services Trade and Other Accounts (hereinafter referred to as the Circular") to further regulate the requirements for submitting tax certificates for external payments under the services trade and other accounts. Since 1999, the SAFE and the SAT have carried out joint supervision over external payments under the services trade and other accounts and have stipulated that domestic institutions and individuals shall submit relevant tax payment certificates when making external payments under the services trade and other accounts. This not only enhanced the effectiveness of the examination of the authenticity of transactions, but also greatly facilitated national foreign-related tax collection and administration work. As a result, over the years tax revenue arising therefrom amounted to tens of billions of yuan. In recent years, due to the rapid development of China's trade in services, the corresponding foreign exchange payments have experienced a year-by-year expansion, the services trade and other types of transactions have continued to increase, and tax collection and administration have witnessed an ever-increasing complexity, causing certain difficulties for the banks to conduct examinations and to a certain extent also affecting the external payments by enterprises. To facilitate the banksexamination of foreign exchange receipts and payments under the services trade and other accounts and to provide more conveniences for enterprises to make external payments, the SAFE and the SAT jointly released the Circular. The Circular mainly includes the following contents: the first is to unify the format of the tax certificates and a variety of the original tax certificates into the Tax Certification for External Payments under the Services Trade, Income, Current Transfers, and Partial Capital Account" (hereinafter referred to as the Tax Certification); the second is to further clarify the accounts under which no tax certification is required for external payments, and to specify that domestic institutions or individuals do not need to handle and submit the Tax Certification when paying for travel expenses, meetings, office expenses, as well as individual study and tours abroad; the third is to unify the standard rate below which there is an exemption for the Tax Certification for external payments. With respect to the designated services trade, income, current transfers, and some transactions under the capital account, domestic institutions and individuals need not apply for a Tax Certification when a single outbound payment does not exceed the equivalent of USD 30,000. The Circular will come into effect as of January 1, 2009(End). 2008-12-02/en/2008/1202/880.html