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QFII investment quota of La Compagnie Financiere Edmond de Rothschild Banque approved. 2006-07-25/en/2006/0725/793.html
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QFII investment quota of Nikko Asset Management Co.Ltd increased. 2006-05-22/en/2006/0522/786.html
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QFII investment quota of KBC Financial Products UK Limited approved. 2006-06-16/en/2006/0616/790.html
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QFII investment quota of the Bank of Nova Scotia approved. 2006-06-16/en/2006/0616/789.html
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QFII investment quota of ING BANK N.V. increased. 2006-04-26/en/2006/0426/782.html
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QFII investment quota of DBS Bank Ltd approved 2006-04-14/en/2006/0414/780.html
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QFII investment quota of BNP Paribas increased 2006-05-22/en/2006/0522/785.html
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The State Administration of Foreign Exchange (SAFE) has recently published the Circular of the State Administration of Foreign Exchange on Regulating Large-sum Overseas Cash Withdrawals with Bank Cards (Huifa No. 29 [2017]) (Circular), and its official answered media questions on relevant issues. 1. Could you brief us on the background of the Circular? A: Alongside technical advancement, non-cash payment has been proliferating and offering increasing convenience. The international regulators' experience also shows that large-sum cash transactions tend to be associated with illegalities such as frauds, gambles, money laundering and terrorist financing. Given this, large-sum cash management is being intensified worldwide. Our monitoring finds that some individuals have withdrawn large sums of cash overseas with many bank cards, which are well above the payments for normal consumption, and are therefore suspicious of violating laws. Regulating large-sum overseas cash withdrawals with bank cards is crucial to cracking down on money laundering, terrorist financing and tax evasion, and can help guard against illegalities associated with cash withdrawals with bank cards. The Circular, aligned with the requirement of ensuring currency convertibility under the current account, does not contradict with the annual quota of USD 50,000 for foreign exchange purchases by individuals, or affect individuals' normal withdrawals of cash and consumption or the convenience for individuals to use foreign exchange. In addition, the SAFE is negotiating with overseas regulators the establishment of the information communication mechanism for regulating large-sum cash withdrawals, in a bid to enhance regulation and collaboration and guard against risks associated with cross-border money laundering. 2. What are the highlights of the Circular? A: First, in overseas cash withdrawals by individuals with domestic bank cards, the sum of withdrawals using the bank cards under the name of the individual (including additional cards) shall not exceed the equivalent of RMB 100,000 in every civil year. Second, the daily quota per card for overseas cash withdrawals with RMB cards and foreign currency cards is the equivalent of RMB 10,000. Third, in case of overseas cash withdrawals in excess of the annual quota, the individuals will not be allowed to withdraw cash overseas with the domestic bank cards in the current and second years. Fourth, individuals are prohibited from borrowing others' bank cards or lending their own bank cards to evade or help evade the management of overseas cash withdrawals. 3. Will the introduction of the Circular impact overseas consumption by cardholders? A: The introduction of the Circular will not impact overseas consumption by cardholders. Bank cards have become one of the most convenient payment tools for overseas consumption. They can be used for catering, accommodation, transport and purchases in overseas travel, business trips and study abroad, and does not offset the annual quota of USD 50,000 for foreign exchange purchases by individuals. The Circular is designed to standardize the large-sum overseas cash withdrawals with bank cards and will not change the basic framework for foreign exchange administration with regard to bank cards and the policy for the use of foreign exchange by individuals, or affect overseas consumption by individuals with bank cards. 4. What are the considerations behind the annual quota of RMB 100,000 for overseas cash withdrawals, as stipulated in the Circular? A: The quota-based management of overseas cash withdrawals with bank cards has been adopted since 2003, with the current quota no higher than RMB 100,000 per card per year. To prevent lawbreakers from withdrawing a large amount of cash with many cards from different banks, the Circular adjusts the annual quota for overseas cash withdrawals to RMB 100,000 per person per year. Statistics show that 81% of overseas cash withdrawals with domestic bank cards were lower than RMB 30,000 in 2016. The annual quota of RMB 100,000 as stipulated in the Circular can meet cardholders' requirements for normal cash withdrawals overseas and curb large-sum cash withdrawals by a few lawbreakers. If an individual does need to use large sums of cash overseas and will not violate regulations, they can handle it in accordance with relevant regulations for foreign exchange administration such as the Measures for the Administration of Individual Foreign Exchange, and the detailed implementation rules. For example, they can leave for China with foreign currency banknotes after buying foreign exchange in accordance with the law. 5. Will it be likely that individuals withdraw cash in excess of the annual quota after the Circular becomes effective? If yes, what impact will that have? A: The annual quota will be subject to the control by the SAFE through the card-issuing financial institutions based on the collection and calculations of the data from the card-issuing financial institutions. Considering that real-time control will postpone response and affect experience with the card, the SAFE adopts delayed control. Therefore, individuals shall well plan overseas cash withdrawals and ensure the quota will not be surpassed. In addition, the Circular requires the card-issuing financial institutions to properly notify the cardholders who withdraw cash overseas of watching policy changes and to step up policy promotion. To guard against malicious withdrawals by some cardholders, any individual who withdraws more cash than permitted will not be allowed to withdraw cash overseas with the domestic bank cards in the current and second years, and will be punished in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration, depending on the severity. 6. When will the Circular come into force? A: The Circular will become effective on January 1, 2018, with the 2018 annual quota for overseas cash withdrawals calculated on an accumulative basis starting from the same day. 7. Are individuals allowed to inquire about the breakdowns of overseas cash withdrawals with their bankcards? A: Any individual who is on the list of individuals whose right to withdraw cash overseas with domestic bankcards is suspended is allowed to inquire of the card-issuing financial institution about the breakdowns of the withdrawals using the bank card issued by the institution, or inquire of the branches or sub-branches of the SAFE by presenting their valid ID card. It should be noted that the SAFE has confidentiality provisions on the breakdowns of cash overseas withdrawals with bankcards and stipulates that any use of the breakdowns should comply with laws and regulations, and card-issuing financial institutions should properly keep the information on any individual whose right to withdraw cash overseas with domestic bankcards is suspended. 8. What suggestions do you have on overseas cash withdrawals by individuals with bank cards? A: Any individual who wants to withdraw cash overseas should protect their own interest. First, they should have a good plan for the use of foreign exchange, reducing the amount of cash carried or used, lest their personal and property security should be threatened by robbery. Second, they should be mindful of card security and information protection, lest their bank cards should be stolen, which will interrupt normal transactions. Third, they should use their bank cards in accordance with laws and regulations. They should not borrow others' bank cards to evade quota management, or lend their own cards to others lest the latter should use the cards for illegal purposes. 2017-12-30/en/2017/1230/1391.html
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By following the work plans of the CPC Central Committee and the State Council, the State Administration of Foreign Exchange (SAFE) has been committed to serving the real economy, facilitating cross-border trade and investments, intensifying regulation of the foreign exchange market, cracking down on foreign exchange irregularities since 2016, in a bid to safeguard the healthy and benign order in the foreign exchange market. In accordance with the Regulations of the People's Republic of China on the Disclosure of Government Information (Decree No. 492 of the State Council), a selection of typical cases involving enterprises and individuals violating foreign exchange regulations are announced as follows: Case 1: Evasion of foreign exchange by Ningbo Dacheng International Trade Co., Ltd. In August and September 2015, Ningbo Dacheng International Trade Co., Ltd. fabricated the entrepot trade contracts with many overseas companies using other companies' expired bills of lading and set transaction prices that were 5-20 times higher than the market prices, illegally transferring funds overseas for 15 times, involving a sum of USD 119 million. Such behavior violated Articles 12 and 14 under the Regulations of the People's Republic of China on Foreign Exchange Administration, and was considered evasion of foreign exchange. Involving a huge amount of money, the behavior had an adverse impact on society and severely interrupted the order in the foreign exchange market. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 22.81 million was imposed on the company. Case 2: Evasion of foreign exchange by Grand China Logistics Holding (Group) Co., Ltd. From January to July 2015, Grand China Logistics Holding (Group) Co., Ltd. signed false charter contracts with its connected companies, domestic or overseas, and made false freight invoices, illegally transferring overseas funds of USD 45.0690 million. Such behavior violated Articles 12 and 14 under the Regulations of the People's Republic of China on Foreign Exchange Administration, and was considered evasion of foreign exchange. Involving a huge amount of money, this had an adverse impact on society and severely interrupted the order in the foreign exchange market. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 20.75 million was imposed on the company. Case 3: Evasion of foreign exchange by Hangzhou Zhiyu Information Technology Co., Ltd. From September 2015 to January 2016, Hangzhou Zhiyu Information Technology Co., Ltd. (formerly known as Wholesale Inc.) fabricated import transactions, and repeatedly used its contracts and invoices to make 44 payments in the total amount of USD 39.6770 million under "prepayment", leading to illegal outflows of large-sum foreign exchange. Such behavior violated Article 12 under the Regulations of the People's Republic of China on Foreign Exchange Administration and Article 3 under the Guidance on Foreign Exchange Administration under Trade in Goods, and was considered evasion of foreign exchange. Involving a huge amount of money, this had an adverse impact on society and severely interrupted the order in the foreign exchange market. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 10 million was imposed on the company. Case 4: Evasion of foreign exchange by Harbin Yabuli Timber Co., Ltd. From April to October 2015, Harbin Yabuli Timber Co., Ltd. repeatedly used expired Declaration Form for Import, changed the amount in the Form, used the information of other companies on their Declaration Forms for Import, and made false contracts and invoices for fabricated imports with foreign companies, illegally transferring funds of USD 18.92 million overseas. Such behavior violated Articles 12 and 14 under the Regulations of the People's Republic of China on Foreign Exchange Administration and Article 3 under the Guidance on Foreign Exchange Administration under Trade in Goods, and was considered evasion of foreign exchange. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 2.93 million was imposed on the company. Case 5: Evasion of foreign exchange by Techman Electronics (Changshu) Co., Ltd. In August 2015, to evade the authenticity review by the bank, Techman Electronics (Changshu) Co., Ltd. repeatedly used 7 copies of invoices, illegally transferring USD 3.82 million overseas through two banks. Such behavior violated Article 14 under the Regulations of the People's Republic of China on Foreign Exchange Administration and Article 15 under the Guidance on Foreign Exchange Administration under Trade in Goods, and was considered evasion of foreign exchange. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 1.17 million was imposed on the company. Case 6: Evasion of foreign exchange by a Mr. Che from Guangdong From December 2015 to January 2017, to transfer funds overseas and evade regulation, Mr. Che, native of Guangdong, transferred funds denominated in RMB into the accounts of 84 persons separately, including a Mr. Liu, and used their quotas for foreign exchange purchases to transfer USD 4.3552 million under personal travel and allowances for family maintenance into Che's personal accounts in Australia and Hong Kong. Che's behavior violated Article 7 under the Measures for the Administration of Individual Foreign Exchange and was considered evasion of foreign exchange that had adverse impact on society. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 1 million was imposed on Che. Case 7: Illegal arbitrage by a Mr. Zhao from Shandong From February to December 2015, to exchange his company's funds for a large sum of foreign exchange, Mr. Zhao, native of Shandong, transferred the money in his company's account into the individual accounts of 41 employees separately and purchased foreign exchange through online banking by using his employees' individual quotas for purchasing foreign exchange. Then Zhao asked his employees to withdraw the foreign exchange and transfer them into Zhao's personal account through 439 deals as time deposits, which amounted to USD 2.0468 million. Zhao's behavior violated Article 7 under the Measures for the Administration of Individual Foreign Exchange and was considered illegal arbitrage. In accordance with Article 40 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 705,800 was imposed on Zhao. Case 8: Illegal trading of foreign exchange by a Mr. Liang from Guangdong From November 2014 to October 2016, to evade taxes, Mr. Liang, native of Guangdong, transferred the money for exports in the amount of HKD 24.03 million into the overseas account of an underground bank through 82 deals. Later the underground bank transferred RMB 19.56 million into Liang's and his relatives' accounts through 94 deals. Liang's behavior violated Article 30 under the Measures for the Administration of Individual Foreign Exchange and was considered illegal trading of foreign exchange. Involving a huge amount of money, this had an adverse impact on society and severely interrupted the order in the foreign exchange market. In accordance with Article 45 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 586,600 was imposed on Liang. Case 9: Illegal foreign exchange trading by a Mr. Lou from Henan In March 2016, to illegally transfer the funds overseas, Mr. Lou, native of Henan, transferred RMB 7.1 million into 11 personal accounts controlled by an underground bank. The underground bank then exchanged the money for foreign exchange and transferred the foreign exchange amounting to AUD 1.426 million into an overseas account designated by Lou. Lou's behavior violated Article 30 under the Measures for the Administration of Individual Foreign Exchange and was considered illegal trading of foreign exchange that has interrupted the order in the foreign exchange market. In accordance with Article 45 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 235,000 was imposed on Lou. Case 10: Evasion of foreign exchange through split transactions by a Mr. Geng from Shanxi From February to June 2016, to illegally transfer assets overseas, Mr. Geng split the RMB funds and transferred the funds into the personal accounts of 31 persons. Then Geng had the funds exchanged for foreign exchange through online banking by using the annual quotas of the 31 persons for purchasing foreign exchange, and transferred the funds into his personal account in Hong Kong, which amounted to HKD 11.78 million. Geng's behavior violated Article 7 under the Measures for the Administration of Individual Foreign Exchange and was considered evasion of foreign exchange. In accordance with Article 39 under the Regulations of the People's Republic of China on Foreign Exchange Administration, an administrative punishment of RMB 150,000 was imposed on Geng. 2017-05-25/en/2017/0525/1269.html
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The State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on Foreign Exchange Risk Management for Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 5 [2017], "Circular"). An official from the SAFE answered media questions on relevant issues. 1. What is the main background of promulgation of the Circular? A: As the domestic bond market is liberalized, foreign institutions' participation in the domestic bond market is rising. As at the end of 2016, the foreign investors in the interbank bond market held bonds worth RMB 870 billion in total, up by RMB 83.4 billion year on year. As the two-way floating elasticity of RMB exchange rate is being strengthened, foreign investors holding RMB bonds will have the requirements for foreign exchange risk management. The foreign investors surely could manage foreign exchange risks in offshore RMB markets, but as China's foreign exchange market goes deeper, the condition will be ripe to support foreign investors to participate in China's foreign exchange market and to manage them in the bond and foreign exchange market. This Circular is released to help foreign institutional investors manage foreign exchange risks in the interbank bond market, and to boost the opening up of the bond and foreign exchange market. 2. Could you tell us what foreign institutional investors in the domestic foreign exchange market mean? Are foreign central banks and similar institutions the foreign institutional investors? A: By definition by this Circular, foreign institutional investors in the domestic foreign exchange market are the foreign investors that meet the provisions under the Announcement No. 3 of the People's Bank of China [2016], which is consistent with the scope of opening up of the interbank bond market. But foreign central banks and similar institutions are not foreign institutional investors, because they can participate in China's foreign exchange market through various channels and conveniently manage the foreign exchange risk exposure arising from the investments in interbank bond market, according to the Announcement No. 31 of the People's Bank of China [2015]. 3. What kind of foreign exchange derivatives business are foreign institutional investors allowed to engage in? A: To hedge against the foreign exchange risk exposure in the interbank bond market, foreign institutional investors could choose the RMB-foreign exchange derivatives laid out in the Detailed Rules for the Implementation of the Administration Measures for Foreign Exchange Settlement and Sales by Banks (Huifa No. 53 [2014]), including forward derivatives, foreign exchange swaps, currency swaps and options, and are subject to no restrictions on the trading categories within the existing types of derivatives in China's foreign exchange market. 4. How to understand the principle of transaction for actual requirements on foreign institutional investors in trading foreign exchange derivatives? A: This principle means that foreign institutional investors trade foreign exchange derivatives to hedge against the foreign exchange risk exposure arising from the investment in the interbank bond market with remittances from abroad. In other words, the foreign exchange risk exposure under bond investment is the basis for trading foreign exchange derivatives. Under this principle, foreign institutional investors may flexibly choose foreign exchange derivative tools and use transaction mechanisms including reverse position closing, balance settlement or gross settlement, based on the foreign exchange risk exposure of a single bond or a bond portfolio that they face. This principle is a basic requirement in the domestic foreign exchange derivatives market, inherently aligned with the prudential trading principle of the market participants. This helps maintain the order of the foreign exchange market and provides guarantees for the trading flexibility of market participants. 5. What are the policy considerations of requiring settlement agents to provide foreign exchange risk management services to foreign institutional investors? A: Settlement agents are required to provide bond investment-related services such as trading and settlement to foreign institutional investors, in accordance with the existing policy arrangements for the interbank bond market. As a result, settlement agents could provide one-stop services covering bond investment and foreign exchange trading to foreign institutional investors in handling foreign exchange derivatives business, so as to better satisfy the investment demand of foreign institutional investors. Going forward, the SAFE will diversify the trading models for foreign institutional investors to participate in China's foreign exchange market, based on the policy arrangements for the interbank bond market. 6. Could foreign institutional investors participate in China's interbank foreign exchange market? A: China's foreign change markets include the interbank market or wholesaling market, and the over-the-counter market, or retailing market or banking foreign exchange sales and settlement market. In the former market, financial institutions are responsible for providing market liquidity. Given that foreign institutional investors participate in China's foreign exchange market for the purpose of hedging against the foreign exchange risk exposure arising from investment in the interbank bond market, and are not the major providers of market liquidity at present, participating in the over-the-counter market as a client could fully satisfy their demand. Foreign institutions participating in the interbank foreign exchange market shall still follow the Announcement No. 40 of the People's Bank of China and the State Administration of Foreign Exchange [2015]. 7. What are the provisions on foreign exchange receipts and payments involved in the foreign exchange derivatives business handled by foreign institutional investors? A: Where a foreign institutional investor, when handling the foreign exchange receipts and payments involved in the derivatives business under the interbank bond market investment in accordance with the Circular of the State Administration of Foreign Exchange on Foreign Exchange Administration for the Investments of Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 12 [2016]), goes through the procedures for outward/inward fund remittances or foreign exchange settlement or purchases through the special account for domestic and foreign currencies directly with a settlement agent, and the currencies for inward and outward remittances are the same, the SAFE will not conduct ex-ante verification or approval. 8. Is it necessary for a foreign institutional investor to sign a master agreement with the counterparty in foreign exchange derivatives trading? A: It is a universal practice in both domestic and foreign financial markets to sign a master agreement. The foreign institutional investor shall handle foreign exchange derivatives business with a settlement agent, and the two parties may select and sign a master agreement through consultation. 9. What are the considerations of the SAFE on the future development of China's foreign exchange market? A: Looking ahead, the SAFE will continue to deepen the foreign exchange market, diversify trading instruments, increase the number of participants, expand opening up and refine infrastructure to better satisfy the demands for foreign exchange risk management from market participants, domestic or overseas, including the foreign institutional investors in the interbank bond market, serve the development of the real economy and support the liberalization of the financial market. 2017-02-27/en/2017/0227/1252.html