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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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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 SAFE branches of Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo: In accordance with the Regulations of the Peoples Republic of China on the Administration of Foreign-funded Banks, which were promulgated by the State Council on November 11, 2006, a circular on foreign exchange management issues involved in the transformation of the branches of foreign-funded banks is hereby given as follows: 1. Business qualifications Wholly foreign-funded banks after the transformation shall take over the licenses for spot purchases and sales of foreign exchange, forward purchases and sales of foreign exchange, swaps of renminbi against foreign currencies, and other renminbi derivatives against foreign currencies that the original branches of the foreign banks had already obtained, and shall attend to the procedures to alter the registration at the local SAFE branches (including the foreign exchange administrative departments, hereinafter referred to as SAFE branches). The branches of the wholly foreign-funded banks shall take over the licenses for foreign exchange purchases and sales and renminbi derivatives against foreign currencies that the same outlets had obtained before the transformation, and shall attend to the procedures to alter the registration at the local SAFE branches. The wholly foreign-funded banks after the transformation shall take over the membership in the foreign exchange market of the original branches of the foreign-funded banks. The wholly foreign-funded banks, taking over the membership in the inter-bank spot foreign exchange market, shall go through the procedures to alter the registration at the China Foreign Exchange Trade System; the wholly foreign-funded banks taking over the licenses for inter-bank forward foreign exchange transactions and inter-bank renminbi swaps against foreign currencies shall report the changes to the China Foreign Exchange Trade System for preliminary inspection and to the SAFE to alter the registration; the wholly foreign-funded banks taking over the licenses for market-makers of renminbi-foreign currency transactions in the inter-bank foreign exchange market shall report the changes to the SAFE for registration and filing. The branches of foreign-funded banks that had obtained the license for QFII custodian shall, after the transformation, apply to the SAFE to confirm their taking over of the license for QFII custodian. If the wholly foreign-funded banks take over the license, a procedure to alter the registration shall be undertaken at the SAFE. If the branches of foreign-funded banks that keep the foreign exchange wholesale business (hereinafter referred to as bookkeeping branches) take over the license, a registration procedure shall be undertaken at the SAFE. The wholly foreign-funded banks transformed from the branches of foreign-funded banks with a QDII license may take over their QDII quotas directly. 2. Management of the general position over foreign exchange purchases and sales The SAFE and its branches shall implement the ongoing method to manage the general position over foreign exchange purchases and sales of wholly foreign-funded banks. The wholly foreign-funded banks may take over the general position quotas over foreign exchange purchases and sales of the original branches of the foreign-funded banks. If the wholly foreign-funded banks need to adjust the general position quotas over foreign exchange purchases and sales, they shall, based on their amount of capital, apply to the local SAFE branches in accordance with the Circular of the SAFE on Adjusting the Method of Managing Bank Foreign Exchange Purchase and Sale Positions (HuiFa No.69 [2005]) and the Circular of the General Affairs Department of the SAFE on Prescribing the Banks General Position Quotas over Foreign Exchange Purchases and Sales (HuiZongFa No. 118 [2005]), and other relevant provisions. The bookkeeping branches not implementing centralized management of the general position over foreign exchange purchases and sales before the transformation may take over the general position quotas over the foreign exchange purchases and sales of the original branches of the foreign-funded banks. The bookkeeping branches implementing centralized management of the general position over foreign exchange purchases and sales before the transformation shall carry the relevant documentation to the local SAFE branches to apply for a re-prescription of their general position quotas over foreign exchange purchases and sales. 3. Transfers of foreign exchange capital and exchanges between local and foreign currencies Transfers of foreign exchange operating funds between wholly foreign-funded banks and their branches after the transformation can be made at their own discretion. Exchanges between domestic and foreign currencies of foreign-funded bankscapital (or operating funds) are subject to advance approval by the local SAFE branches in accordance with the Circular of the SAFE on the Approval Principles and Procedures for the Banks' Own Foreign Exchange Purchases and Sales under the Capital and Financial Account (HuiFa No.61 [2004]). When the accumulated amount of one-year exchanges between domestic and foreign currencies is more than the equivalent of USD 500 million (including USD 500 million), the local SAFE branches shall give preliminary approval and report to the SAFE for further approval. 4. Accounting items for foreign exchange purchases and sales Wholly foreign-funded banks after the transformation shall, in accordance with the Interim Measures for the Management of the Designated Foreign Exchange Banks' Handling of Foreign Exchange Purchase and Sale Operations (Decree of the People's Bank of China No.4 [2002]), establish independent foreign exchange purchase and sale accounting items, separate foreign exchange purchases and sales for the clients, their own foreign exchange purchases and sales, intra-system foreign exchange purchase and sale positions management transactions, and market foreign exchange purchase and sale positions management transactions, and they shall be accounted for separately under the accounting items for foreign exchange purchases and sales. The wholly foreign-funded banks that cannot meet the aforesaid requirements by the end of the preparatory period for the transformation shall meet the said requirements within two years after obtaining approval to start operations from the China Banking Regulatory Commission. 5. Management of surplus quotas for short-term external debts and external guarantees The wholly foreign-funded banks after the transformation shall take over the quotas of the short-term external debt and external financial guarantees provided to overseas enterprises from the original branches of the foreign banks, and shall report to the SAFE and the local SAFE branches. The registrations of claims, debts, and external guarantees that were originally handled by the branches of the foreign banks shall accordingly now be handled by the wholly foreign-funded banks. The changes in the external debts registration shall be handled collectively at one time by the banks at the SAFE. The registration changes of the external guarantees and domestic foreign exchange loans shall be handled collectively at one time by the guarantors or claimants at the local SAFE branches/ sub-branches. If an overseas bank has both a wholly foreign-funded bank and a bookkeeping branch in China, the said wholly foreign-funded bank and the bookkeeping branch shall share the surplus quotas of the short-term external debt and the external financial guarantees provided to the overseas enterprise. The wholly foreign-funded bank shall be responsible for management. To go through the aforesaid registration changes or filing, a written application, the approval to start a business issued by the China Banking Regulatory Commission, the licenses for relevant operations issued by the foreign exchange bureaus, and other documents required by the foreign exchange bureaus shall be presented. All SAFE branches shall simplify the procedures for approving a change of registration. On receiving this Circular, all SAFE branches shall transmit it promptly to the sub-branches and foreign-funded banks under their jurisdiction. In cases of any problems encountered during implementation, please send the feedback to the SAFE in a timely manner. Telephone numbers: Balance of Payments Department: 010-68402464, 68402311; Fax numbers: 010-68402315, 68402303 Capital Account Management Department: 010-68402247, 68402348; Fax numbers: 010-68402208, 68402349 2007-03-20/en/2007/0320/832.html
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March 16, 2007 - The SAFE recently held its 2007 work conference on foreign exchange management under the capital account in Nanjing , summarizing its work in 2006 and making arrangements for foreign exchange management under the capital account for 2007. Deputy Administrator Li Dongrong attended the meeting and delivered a speech. Centering on the promotion of an equilibrium in the balance of payments and based on the principle of balanced management of capital inflows and outflows, the SAFE, in keeping with national macro-control, carried out institutional innovations and policy adjustments, working out and releasing a sequence of policies and measures in 2006. Management of foreign exchange under the capital account has made new progress. The SAFE improved management of external financial investment and guided the orderly bi-directional flow of capital under the securities account. The qualified domestic institutional investors (QDII) system was introduced and totals of USD 13.4 billion, USD 3.488 billion, and USD 0.5 billion respectively were approved for the external financial investment of banks in China, insurance institutions, and securities institutions, and a total of USD 3.4 billion was approved for qualified foreign institutional investors (QFII). Meanwhile, the SAFE strengthened and improved the statistical monitoring of cross-border capital flows, strictly controlled short-term external debts, and further standardized foreign exchange management of foreign capital mergers and acquisitions and round-tripping investment. To coordinate macro-control of the real estate market, the SAFE further standardized foreign exchange management of capital inflows into the real estate market and the practice of foreign exchange sales of property by overseas institutions and individuals and effectively controlled the borrowing of external debt by foreign-funded enterprises. The SAFE further deepened the reform of foreign exchange administration of overseas investments and offered vigorous support for competent enterprises to "go global." By lifting the limitations on foreign exchange purchases for overseas investment, enterprises were allowed to remit related early-phase investment-related expenses in advance to fully satisfy corporate demands for overseas foreign exchange. The conference also made arrangements for foreign exchange administration under the capital account in 2007. First, the reform of foreign exchange administration of direct investment will be further deepened, competent enterprises will be given vigorous support to "go global," and channels for overseas investment will be broadened. The SAFE will cooperate with the relevant departments to improve the statistical monitoring of foreign direct investment and administration of capital sales, and will perfect the centralized management of the foreign exchange capital of multinational corporations. Second, external debt management will be strengthened. The SAFE will improve statistical monitoring, restrain the overheated growth of short-term debts, control the sales of external debts, and improve the management of external guarantees. Third, the opening up of the capital market will be steadily driven to promote the orderly bi-directional flow of capital. The SAFE will improve the implementation of qualified institutional systems such as QFII and QDII, standardize individual foreign exchange administration under the capital account, and gradually loosen the restrictions on individual external financial investments. Li emphasized that foreign exchange administration under the capital account faces new challenges due to the serious disequilibrium in the balance of payments. He put forward six requirements in order to effectively do the work of foreign exchange administration under the capital account in 2007. First, the spirit of the Central Economic Work Conference and the National Financial Work Conference should be studied to align with the thinking of the Central Governments analysis and judgment on the current balance of payments, to recognize the complexity of achieving an equilibrium in the balance of payments, and to guide the administration of foreign exchange under the capital account. Second, vigorous measures should be taken to cultivate a working style and accomplish every task in a down-to-earth manner. Third, a sense of serving society and facilitating trade and investment should be encouraged. Fourth, science should be respected to improve the monitoring, servicing, and administrative efficiency via hi-tech methods. Fifth, a sense of financial security should be strengthened, correctly balancing reform and risk prevention while further promoting RMB convertibility under the capital account. Sixth, the fight against corruption should be reinforced, improving internal management and building a team that is proficient and ideologically advanced 2007-03-16/en/2007/0316/831.html
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March 30, 2007 - The SAFE recently held a Briefing Meeting on Inspection of Designated Foreign Exchange Banks in Dongguan , Guangdong . Attendees included representatives from 19 Chinese banks, including the China Development Bank, Export-Import Bank of China, Agricultural Development Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, as well as ten foreign-funded banks, including Standard Chartered Bank, Mizuho Corporate Bank, Bank of East Asia, KBC Bank N.V., and United Overseas Bank. Deputy Administrator Deng Xianhong attended the meeting and delivered a speech. The meeting announced the inspection and punishment of designated foreign exchange banks by the administrative authorities in 2006. With the development of the foreign exchange market and improvement in its administration, designated banks are attaching increasing importance to the lawfulness of their operations and the majority conduct their business in accordance with the laws. However, some still violate the rules. The foreign exchange administrative departments inspected 2,027 sectors (including head offices, branches, and sub-branches) of 29 Chinese- and foreign-funded banks in 2006, and 265 sub-branches were discovered to be violating the regulations and accordingly were fined RMB 16 million. Illegal conduct included excessive short-term external debt, illegal sales and transfers of external debt capital, violating the regulations on the management of foreign exchange loans and guarantees, illegal management of the general position for the sale and purchase of foreign exchange, over-fluctuation in the nominal rate, unlawful handling of collections and sales, sales and payments of foreign exchange, violating regulations on the management of export verifications, etc. Acts that purposefully evaded the regulations, for instance handling foreign exchange business by dividing the amount, were also discovered. The meeting pointed out that with the deepening of the foreign exchange structural reform, foreign exchange administration changed from pre-event examination and approval to post-event supervision and from direct supervision to indirect supervision. The designated foreign exchange banks play an increasingly important role in the administration. The meeting set forth the requirement that the banks balance their business development and lawful operations, strengthen internal management, improve their internal control system for each business, and improve the skills of their staff and the lawfulness of their businesses. The meeting also called for active cooperation and support in the coming special inspections of foreign exchange capital inflows and settlement and the foreign exchange collections and sales of the banks, e.g., preparing materials and data, timely reporting existing problems, and assisting inspectors with all the inspection work. The briefing meeting strengthened communications between the foreign exchange administrative departments and the designated foreign exchange banks, which has played a positive role in promoting the sound development of the market and an equilibrium in the balance of payments. Attendees said that they would utilize this critical juncture to raise their overall economic sense, further improve their internal control system, strengthen the authenticity of the verification, enhance the level of the lawfulness of their practices, and guard against the risks of foreign exchange business. 2007-03-30/en/2007/0330/835.html
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February 8, 2007 - The Ningbo branch of the State Administration of Foreign Exchange (SAFE), together with the local public security sectors, cracked several cases of illegal sales of export verification documents and destroyed three hideouts in December 2006. Eight suspects were captured on the spot, 279 seals (including company and financial seals) and 2,780 export verification forms were confiscated. The SAFE Ningbo Branch had noticed that since 2006 certain enterprises had frequently drawn a large amount of export verification documents. After four months of tracking and inspection, on December 1 the Branch, accompanied by the local public security sectors, ferreted out the gang, captured the chief suspect, and confiscated 238 company and financial seals and over 2,700 verification and declaration forms. On December 26, they raided another two enterprises, captured seven suspects, and seized 81 verification forms and 41 seals. Analysis shows that there are two reasons for the frequent occurrence of such crimes. On the one hand, enterprises or individuals who are not entitled to export and import need the forms for verification materials. On the other hand, some lawless persons, who disguisedly register as circulating foreign trade companies, draw more verification forms than necessary and sell them at higher prices. Meanwhile, many logistics companies even tout their business of selling verification forms. The SAFE will continue to cooperate with public security agencies to step up the campaign against reselling verification forms and further rectify economic order in the foreign exchange market. 2007-02-08/en/2007/0208/826.html
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Credit Suisse Shanghai Branch's purchasing quota of foreign exchange for overseas investment services on behalf of its clients approved. 2007-02-02/en/2007/0202/825.html
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Agricultural Bank of China 's purchasing quota of foreign exchange for overseas investment services on behalf of its clients approved 2007-02-12/en/2007/0212/827.html
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QFII investment quota of Sumitomo Mitsui Asset Management Company Limited approved 2007-02-14/en/2007/0214/828.html
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QFII investment quota of Shinko Securities Co. Ltd approved 2007-02-16/en/2007/0216/830.html
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QFII investment quota of HSBC Investment ( Hong Kong ) Limited approved 2007-02-15/en/2007/0215/829.html