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Decree [2009] No. 1 Pursuant to the Regulations of the People's Republic of China on Foreign Exchange Administration and the Measures for Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) (Decree [2006] No. 36 of the CSRC, PBOC, and SAFE), the Regulation on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII), which will enter into effect from the date of promulgation, is hereby promulgated. September 29, 2009 Regulations on Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) Chapter 1 General Provisions Article 1 For the purpose of standardizing the foreign exchange administration of Qualified Foreign Institutional Investors (hereinafter referred to as QFII) in China's securities market, these Regulations are promulgated based on the Regulations of the People's Republic of China on Foreign Exchange Administration and the Measures for Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) (Decree [2006] No. 36 of the CSRC, PBOC, and SAFE). Article 2 The QFII shall mandate its domestic custodian (hereinafter referred to as custodian) to go through all the relevant procedures as required by these Regulations. Article 3 The QFII and its custodian shall comply with the relevant regulations of Chinas foreign exchange administration. Article 4 The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (hereinafter referred to as AFEs) shall, in compliance with the relevant laws and regulations, exercise supervision, management, and inspection over the investment quota, fund accounts, fund receipts and payments, and exchange, and so forth. Chapter 2 Investment Quota Administration Article 5 The QFIIs domestic securities investments are subject to quota administration. The State Administration of Foreign Exchange (hereinafter referred to as the SAFE) approves the investment quota of single QFIIs and encourages mid-term and long-term investments. Article 6 The following materials shall be submitted to the SAFE when the QFII applies for an investment quota and to open foreign exchange accounts and a special RMB accounts: 1) A written application submitted by the QFII and its custodian, including the basic information on the QFII, the source of funds, the investment plan, the QFIIs letter of commitment that no capital shall be withdrawn during the lock-up period, and so on, along with the Registration Form for Qualified Foreign Institutional Investors by the SAFE. (See Attachment 1 for a sample.) 2) Photocopies of the License for the Securities Investment Business of Qualified Foreign Institutional Investorsissued by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC"). 3) The QFIIs notarized power of attorney to the custodian. 4) Other materials as required by the SAFE QFIIs that apply to increase the investment quota shall provide, apart from the aforesaid 1) and 4), the Foreign Exchange Registration Certificate for Qualified Foreign Institutional Investors (hereinafter referred to as the FERC), and a report on the domestic investments of the approved investment quota, including asset allocations and changes, investment profits and losses, compliance, average stock turnover, and so forth. Article 7 An application for a single QFII investment quota shall not be less than an amount equivalent to USD 50 million for each time, but not more than an amount equivalent to a total of USD 1 billion. The SAFE may adjust the aforesaid limits in accordance with the economic and financial situations, the supply and demand relations in the foreign exchange market, the status of the balance of payments, and other factors. The QFII shall not, within 1 year after the approval of the investment quota, apply for an increase in its investment quota. Article 8 The QFII should, within 6 months after the date of approval of each investment quota, remit the principal inward; should it be overdue, the QFII shall not remit the principal inward unless it is approved. Should the remitted principal be not the full prescribed amount but in excess of the equivalent of USD 20 million, the actually remitted amount shall be deemed to be its investment quota. In the event that the QFII remits the principal in non-U.S. Dollar currencies, it is necessary to calculate the remitted U.S. Dollar equivalent of the investment quota with reference to the Conversion Rate Table of All Currencies to the U.S. Dollarissued by the SAFE in the month when the outward remittance takes place. Article 9 For QFIIs, such as pension funds, insurance funds, mutual funds, charity funds, endowment funds, government and monetary authorities, and open-ended Chinese funds initiated and established by QFIIs, the lock-up period of the principal is 3 months; for other QFIIs, the period is 1 year. The lock-up period of a QFIIs principal shall be calculated from the date of the remittance of the full amount of the principal; in the event of a failure to remit the principal within the prescribed period of time, the lock-up period shall be calculated 6 months after the date when the investment quota is approved. The aforesaid open-ended Chinese funds refer to open-ended securities investment funds that are established abroad in public offerings, with over 70% of the funds invested in China. The QFII shall report and file, within 20 working days after the initiation and establishment of open-ended Chinese funds, the original fund prospectuses and Chinese translations of its basic contents to the SAFE. The aforesaid lock-up period refers to the period in which the QFIIs are forbidden from remitting the principal abroad. Chapter 3 Account Administration Article 10 With the approval of the investment quota and the account opening issued by the SAFE, the QFII can, in the location of its custodian, open a foreign exchange account and a corresponding special RMB account for its own funds or for its clientsfunds for which it provides asset management services, respectively. QFIIs that establish open-ended Chinese funds shall open a foreign exchange account and a corresponding special RMB account for each of the funds. The custodian shall, within 5 working days after the opening of the QFIIs foreign exchange account and special RMB account, file with the AFE in the place where it is located, and report the formal custody agreement to the SAFE and receive the FERC for the QFII. Article 11 The income in the QFIIs foreign exchange accounts shall includes principals remitted from abroad by the QFII, interest income, funds remitted inward by purchasing foreign exchange through the QFIIs special RMB accounts, and other income approved by the SAFE. Expenditures shall include funds remitted to the QFIIs special RMB accounts by exchange settlement, funds remitted abroad by the same route as remitted inward, and other expenditures approved by the SAFE. The income in the QFIIs special RMB accounts shall include funds remitted inwards from the QFIIs foreign exchange accounts by exchange settlement, the proceeds from the sales of securities, cash dividends, interest income, and other income approved by the SAFE; expenditures shall include expenses for purchasing the prescribed products, such as securities (including stamp duties, service charges, etc.), taxes and duties, such as taxes, custody fees, audit fees, and overhead expenses, funds remitted to the QFIIs foreign exchange accounts with purchased foreign exchange, and other expenditures approved by the SAFE. Funds in the QFIIs foreign exchange accounts and special RMB accounts shall not be used for any purposes other than domestic securities investments. Article 12 Funds shall not be transferred among the QFIIs fund accounts, clientsfund accounts, and accounts for open-ended Chinese funds accounts, or among multiple accounts for open-ended Chinese funds under a single QFII. Article 13 The deposit rates for the QFIIs foreign exchange accounts and special RMB accounts shall be applied in accordance with the relevant regulations as promulgated by the Peoples Bank of China. Article 14 When a QFII is involved in one of the following circumstances, it shall be subject to punishment of the realization of its assets within one month, the closing of its foreign exchange accounts and special RMB accounts opened at the location of its custodian, and repeal of its corresponding investment quota: 1) The CSRC has revoked its license for securities investment business; 2) The amount of funds remitted inward by the QFII within 6 months after the first approval of the investment quota is less than the equivalent of USD 20 million; 3) The amount of the remaining principal left in China is less than the equivalent of USD 20 million due to the QFIIs repatriation of investments abroad; 4) The SAFE revokes the QFIIs investment quota in compliance with these Regulations; 5) Other circumstances as prescribed by the SAFE. The custodian shall, within 5 working days after the closing of the QFIIs foreign exchange accounts and special RMB accounts, file with the AFE in the place where it is located, and return the FERC to the SAFE. Chapter 4 Exchange Management Article 15 The QFII can, in accordance with the investment plan and the relevant reports that are provided when applying for an investment quota, within 10 working days prior to the actual investment taking place, advise its custodian to process the exchange settlement necessary for the investment and remit the funds to its special RMB account. A QFII that remits an amount of accumulated investment principal that is less than the equivalent of USD 20 million shall not process exchange settlements and investments. Article 16 Upon the termination of the lock-up period, open-ended Chinese funds can, based on the monthly subscribed or redeemed net amount, process the relevant inward or outward remittance of funds on a monthly basis In the event of net redemptions, the principal remitted outwards therein shall be calculated according to the ratio of the QFIIs investment principal and profits and losses on the last transaction day of the month prior to the outward remittance as confirmed by the custodian, and then that amount shall be deemed to be the approved amount for the next inward remittance of investment funds. In the event of net subscriptions of open-ended Chinese funds, should the exchange settlement funds remitted inward each time not be the equivalent of USD 50 million or more, the custodian can go directly through the relevant procedures on its behalf, and then file with the AFE in the place where the custodian is located; should they exceed the equivalent of USD 50 million, the open-ended Chinese funds shall, within 10 working days in advance, file an application with the AFE in the place where the custodian is located along with the photocopies of the FERC, and shall carry out the relevant procedures unless approval is granted by the aforesaid AFE. In the event of net redemptions of the open-ended Chinese funds, should the funds remitted outward with foreign exchange purchased each time not be the equivalent of USD 50 million or more, the custodian can directly go through the relevant procedures on its behalf, and then file with the AFE in the place where the custodian is located; should they exceed the equivalent of USD 50 million, the open-ended Chinese funds shall, within 10 working days in advance, file a written application with the AFE in the place where the custodian is located, along with a written application, photocopies of the FERC, and a report on investment profits and losses, and shall not go through the relevant procedures without the approval of the aforesaid AFE. Article 17 In the event that the QFII needs to remit the principal, with purchased foreign exchange upon the termination of the lock-up period of the investment principal, other than open-ended Chinese funds, the following application materials shall be submitted to the SAFE for approval: 1) A written application 2) The original copy of the FERC 3) A report on the inward remittances of the principal and past investments 4) Other materials as required by the SAFE After the examination and verification of the aforesaid materials, the SAFE shall issue an approval document, and correspondingly decrease the QFIIs investment quota. The custodian shall go through the procedures for foreign exchange purchases and outward remittances of funds on the QFIIs behalf with the approval of the SAFE. Article 18 In the event that the QFII needs to remit outwards the accumulated proceeds realized with purchased foreign exchange, other than for open-ended Chinese funds, it shall, upon the issuance of a special audit report by a Chinese certified public accountant, delegate its custodian to file an application with the AFE where the custodian is located on its behalf with the following materials: 1) A written application and the relevant documents attesting to the decision on the remittance of the proceeds; 2) The original copy of the FERC; 3) A special audit report on the investment proceeds issued by a Chinese certified public accountant; 4) Tax payment documentation on the proceeds; 5) Other materials as required by the AFE. After the examination and verification of the above-mentioned materials, the AFE in the place where the custodian is located, shall issue an approval document, which can be used by the custodian to go through the procedures for exchange purchases and outward remittances of funds on behalf of the QFII. Article 19 The custodian shall, in an accurate and timely manner, record on the FERC the situation regarding the remittance/exchange and receipt and payment of the QFIIs funds. Article 20 The SAFE may, in accordance with Chinas economic and financial situations, supply and demand relations in the foreign exchange market, and status of the balance of payments, adjust the time, amount, and period for the outward remittances of funds by the QFII. Chapter 5 Statistics, Supervision, and Administration Article 21 When a QFII is involved in one of the following circumstances, it shall within 5 working days go through the procedures with the SAFE to change the FERC and submit a written report to the SAFE 1) Changes in its basic information such as the name, responsible leader, major shareholders, or actual controller of the QFII; 2) The QFII or its major shareholders or actual controller face significant penalties by other regulatory authorities (including foreign authorities), and the penalties thereof shall exert a significant influence on the QFIIs investment operations, or the relevant business licenses are suspended or revoked; 3) The custodian or the entrusted domestic investment institutions (brokers) are changed or important information thereof is changed; 4) There are changes in the account name, information on the account, and so forth; 5) Changes in the fund prospectuses of the open-ended Chinese funds; 6) Other situations as prescribed by the SAFE. In the event that the QFII changes its custodian, the new custodian shall provide, apart from the aforesaid materials, a draft of a newly signed escrow agreement, basic information about the new custodian, a report on the escrow business, and a newly notarized power attorney, and shall submit a formal escrow agreement within 5 working days after the date on which the foreign exchange account and the special RMB account are opened. Article 22 The custodian shall submit the relevant reports on remittance/exchange of funds and domestic securities investments by the QFII in a timely and accurate manner according to the following particulars: 1) Completing the Schedule of QFIIs Funds Outward/Inward Remittances (See Attachment 2 for a sample) within 2 working days after the QFIIs outward/inward remittances of funds or settlement/purchase of exchange; 2) Submitting the Monthly Report I & II on Domestic Securities Investment by the QFIIwithin 8 working days after the end of each calendar month; 3) Submitting the last fiscal years Annual Financial Statements I & II on Domestic Securities Investments by QFIIs(see Attachment 4 for a sample) as audited by a Chinese certified public accountant within 3 months after the termination of each fiscal year. Article 23 A QFII that commits one of the following acts shall be subject to punishment by the AFE in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration, and the investment quota thereof may be reduced or revoked: 1) Illegal use of foreign exchange, such as transferring or selling the investment quota. 2) Providing false information or materials to its custodian or the AFE. 3) Failing to process the exchange settlement or exchange purchase/payment in accordance with the relevant regulations. 4) Failing to provide relevant information or materials regarding its remittance/exchange of funds and domestic securities investments as required by the AFE 5) Other acts in breach of the regulations on foreign exchange administration. Article 24 Custodians that commit one of the following acts shall be subject to punishment by the AFE in accordance with the Regulations of the People's Republic of China on Foreign Exchange Administration; in serious cases, its qualification as QFII custodian shall be revoked jointly by the AFE and CSRC: 1) The outward remittance of the principal for the QFII exceeds the SAFE-approved investment quota or is overdue; 2) Failure to go through the procedures for the outward remittance of principal/proceeds for the QFII in accordance with the relevant regulations; 3) Failure to open/close the foreign exchange accounts and special RMB accounts for the QFII in accordance with the relevant regulations, or failure to go through the remittance/exchange of funds and transfer procedures for the QFII for the prescribed income and range of expenditures for the account; 4) Failure to submit reports or relevant materials to the AFE, or failure to report on relevant situations to the AFE. 5) Failure to report the balance of payments in accordance with the relevant regulations; 6) Other acts in breach of the regulations on foreign exchange administration. Chapter 6 Supplementary Provisions Article 25 The materials submitted to the AFE as required by these Regulations shall be in Chinese. Should there be counterparts in both Chinese and a foreign language, the Chinese text shall prevail. Article 26 Power to interpret the present Regulations shall remain with the SAFE. Article 27 These Regulations will enter into force as of the date of promulgation. The Provisional Measures for Foreign Exchange Administration of Domestic Securities Investments by Qualified Foreign Institutional Investors (QFII) (Announcement No. 2 [2002] of the SAFE) and the Circular of the General Affairs Department of the State Administration of Foreign Exchange on the Management and Operation of Foreign Exchange of QFIIs (Huizongfa No. 124 [2003]) shall be repealed. Attachments: (Omitted) 2009-11-13/en/2009/1113/695.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange 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 order to standardize the opening and use of domestic foreign exchange accounts by overseas institutions and other relevant operations, to promote the facilitation of trade and investment, and to prevent financial risks, the relevant issues are hereby notified as follows according to the related provisions of the Regulations of the Peoples Republic of China on Foreign Exchange Administration. 1. Overseas institutions as stated in this Circular refer to institutions legally registered and established outside the territory of China (including Hong Kong SAR, Macao SAR, and Taiwan Province). Domestic banks in this Circular refer to Chinese-funded banks and foreign-funded banks that are qualified to accept public deposits and handle domestic and overseas settlements in accordance with the law. The domestic foreign exchange accounts of overseas institutions referred to in this Circular do not include domestic offshore accounts of overseas institutions (accounts opened by overseas institutions according to the regulations of the offshore business departments of the domestic banks that have obtained eligibility to handle offshore banking businesses in accordance with the law). 2. Overseas institutions and domestic banks shall, in accordance with the provisions of this Circular, open and use foreign exchange accounts, conduct foreign exchange receipt and payment business, and abide by the provisions as provided by the relevant laws and regulations of the State. 3. When opening foreign exchange accounts for overseas institutions, the domestic banks shall examine and verify the materials for the account opening, such as the documentary evidence testifying to the legality of the overseas registration and establishment of the overseas institutions. In cases when the account opening materials, such as the documentary evidence, are presented in languages other than Chinese, the overseas institutions shall also provide Chinese translations of the corresponding evidence. Unless otherwise specified by the SAFE, the opening of foreign exchange accounts by domestic banks for overseas institutions is not subject to the approval of the SAFE and its branches or sub-branches (hereinafter referred to as the Foreign Exchange Administrations). The account name on the domestic foreign exchange accounts of overseas institutions shall conform with the name presented in the documentary evidence testifying to the legality of the overseas registration and establishment (or the corresponding Chinese translation) of the overseas institutions. 4. When opening foreign exchange accounts for overseas institutions, the domestic banks shall mark NRA (NON-RESIDENT ACCOUNT) preceding the foreign exchange account numbers in a uniform manner, i.e., NRA + the foreign exchange account number, and at their discretion shall distinguish between banks and non-bank institutions among overseas institutions, so that the domestic payees and payers and their due banks and paying banks with fund transfers from/to the said foreign exchange accounts will be able to accurately identify whether the foreign exchange accounts are domestic foreign exchange accounts of overseas institutions. The domestic banks shall, within 18 months after implementation of this Circular, complete the adjustments to their internal systems for affixing the NRA mark in a uniform manner on the domestic foreign exchange accounts of overseas institutions as stipulated in the preceding paragraph and the uniform marking of NRAin front of the account number of the domestic foreign exchange accounts that were opened prior to the issuance of this Circular and other relevant work. The domestic banks shall comply with the Circular of the State Administration of Foreign Exchange and the General Administration of Quality Supervision, Inspection, and Quarantine of the Peoples Republic of China on the Issuance of Operational Rules on the Coding for Special Institutions in the Declaration of the Balance of Payments Statistics (Huifa No.131 [2003]) in applying for and acquiring codes for overseas institutions that open foreign exchange accounts, conducting basic information registration for overseas institutions at the Foreign Exchange Administrations, and submitting the detailed information about the account opening, balances and receipts, and payments of the domestic foreign exchange accounts of overseas institutions to the Foreign Exchange Administrations via the foreign exchange account management information system. Foreign exchange accounts such as inter-bank deposit accounts opened by overseas banks in domestic banks are not subject to the provisions stipulated in this paragraph. 5. Foreign exchange receipts and payments of domestic institutions and individuals from/to domestic foreign exchange accounts of overseas institutions shall be subject to cross-border transaction administration. Domestic banks shall handle such foreign exchange receipts and payments after examining and verifying the valid commercial documents and vouchers of the domestic institutions and individuals according to foreign exchange administration regulations on cross-border transactions. If payments are made by overseas institutions to domestic institutions and individuals via the domestic foreign exchange accounts prior to completion of the NRA marking by the domestic banks, the remitting bank shall note NRA PAYMENT in the transaction postscript of the remittance instruction so that the due bank can identify whether the funds are remitted from a domestic foreign exchange account of overseas institutions. When payments are made by domestic institutions and individuals to the domestic foreign exchange accounts of overseas institutions, the domestic institutions and individuals shall, in addition to providing valid commercial documents and vouchers according to the regulations, provide the remitting banks with documentary evidence to demonstrate the nature of the foreign exchange account of the beneficiary; in cases when the remitting bank cannot identify the nature of the foreign exchange account due to a lack of clarity in the provided documentary evidence, the remitting bank shall inquire in writing to the due bank regarding the nature of the foreign exchange account, and the due bank shall respond through a written confirmation. 6. Unless otherwise specified by the SAFE, where a domestic foreign exchange account of an overseas institution is involved in (a) a foreign exchange collection from home or abroad; (b) a foreign exchange transfer with another domestic foreign exchange account of the overseas institution; (c) a foreign exchange transfer with an offshore account, or; (d) a payment made overseas, the domestic bank may directly handle such business as per the clients directions. 7. Fund receipts and payments via the domestic foreign exchange accounts of overseas institutions from/to domestic or overseas parties and consequent changes in the balance of accounts shall be subject to declaration of the balance of payments statistics according to the relevant regulations. 8. The deposit and withdrawal of cash in foreign currency via the domestic foreign exchange accounts of overseas institutions and the foreign exchange settlement of funds in such accounts in a direct or disguised manner are prohibited unless when approved by branches or administrative departments of the SAFE at the locality of registration. 9. The balance of funds in the domestic foreign exchange accounts of overseas institutions shall be incorporated into short-term external debt quota management of the domestic banks, unless otherwise specified by the SAFE. In cases where the said balance is used as pledge for domestic institutions to obtain loans from domestic banks, it shall be handled in accordance with the foreign exchange administration regulations on overseas guarantees under the item of domestic loans. 10. When conducting business related to the domestic foreign exchange accounts of overseas institutions, the domestic banks shall abide by the provisions of the anti-money laundering laws and the administrative regulations and departmental rules such as those on the reporting of large-sum and suspicious transactions. 11. Where overseas institutions and individuals open offshore accounts in the offshore business departments of domestic banks that are eligible for offshore banking business according to the law, the foreign exchange receipts and payments of such offshore accounts from/to the domestic institutions shall be handled in strict compliance with the Measures for the Administration of Offshore Banking Business (Yinfa No. 438 [1997]), the detailed implementation rules, and other relevant regulations. 12. For the opening, use, and cancellation of foreign exchange accounts of qualified overseas institutional investors, special foreign exchange accounts of foreign investors, B-share foreign exchange accounts of overseas institutions, and domestic foreign exchange accounts of embassies and consulates of foreign countries (regions) in China with diplomatic immunity or of representative institutions of international organizations in China, if there are applicable regulations stipulated by the SAFE, the opening, use, and cancellation of such accounts shall be subject to these regulations. If there are no applicable regulations, the opening, use, and cancellation of such accounts shall be conducted in accordance with the provisions of this Circular, which include the marking of NRA, etc. 13. The Foreign Exchange Administrations shall impose a penalty for any acts in breach of the provisions of this Circular according to the foreign exchange administration regulations including the Regulation of the Peoples Republic of China on Foreign Exchange Administration. 14. This Circular shall take effect as of August 1, 2009, except for the provision on submitting detailed information about account opening, balances, as well as receipts and payments of domestic foreign exchange accounts of overseas institutions via the foreign exchange account management information system to the Foreign Exchange Administrations. The SAFE shall separately provide information on the specific time for implementing the latter provision. This Circular shall be interpreted by the SAFE. On receiving this Circular, all SAFE branches and foreign exchange administrative departments shall transmit it in a timely manner to the central sub-branches, sub-branches, and designated foreign exchange banks under their administration. For any questions arising from implementation of this Circular, please provide timely feedback to the General Affairs Department of the SAFE. Tel: 68402429, 68402129 Fax: 68402430 July 13, 2009 2009-07-13/en/2009/0713/693.html
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The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange in all provinces, autonomous regions, and municipalities directly under the Central Government; the SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; all Chinese-funded designated foreign exchange banks: In accordance with the Measures for the Declaration of Balance of Payments Statistics and their detailed rules for implementation, for the purpose of collecting in a all-around manner information about foreign-related collections and payments by non-residents from/to overseas parties via domestic banks and information about collections and payments by domestic non-residents from/to domestic residents via domestic banks, the relevant requirements are hereby notified as follows: I. Declaration of the balance of payments statistics on collections and payments (including foreign exchange and RMB) by domestic non-residents from/to overseas parties via domestic banks shall be conducted according to the following regulations: (I) For foreign-related collections and payments by domestic non-residents from/to overseas parties via domestic banks, the banks handling this business shall handle the indirect declarations for the balance of payments statistics according to the provisions stipulated in the Operating Procedures for the Declaration of Balance of Payments Statistics via Financial Institutions (Trial). (II) The handling banks shall complete the Form of the Basic Information on the Entity for their non-resident institutional clients, and submit the information on the Form of the Basic Information on the Entity electronically to the foreign exchange administrations. (III) The handling banks shall electronically submit the information on the Declaration Form for Foreign-related Income, the Application Form for Overseas Remittances, and the Advisory Notice on External Payments/Acceptances to the foreign exchange administrations. (IV) The nature of such collection and payment transactions shall be declared in a uniform manner under the item Other investments liabilities - currencies and deposits - deposits from overseas - outward transfer of deposits from overseas, and the transaction code for the balance of payments shall be 802031. The transaction remark shall indicate collection by non-residents from overseas or payment by non-residents to overseas. II. The declaration of the balance of payments statistics on collections and payments made by domestic non-residents from/to domestic residents via domestic banks shall be handled according to the following regulations: (I) Collections and payments by domestic non-residents from/to domestic residents via domestic banks shall be incorporated into the scope of the data on the indirect declarations of balance of payments statistics, and the banks shall improve the scope of the data acquisition on their interface programs according to this Circular and the relevant provisions. Banks that have completed the development of their interface programs according to the Circular of the State Administration of Foreign Exchange Concerning Preparatory Work for Further Implementing the Pilot Operation of the SAFE Sub-project of the Jinhong Project (Huifa No. 7 [2009]) shall improve their interface programs according to the provisions in this Circular before the end of July 2009; banks that have not completed the development of their interface programs shall proceed according to their interface program development plan reported for the record, and the development of their interface programs shall be carried out in accordance with the provisions of this Circular. (II) For collections and payments by domestic non-residents from/to domestic residents via domestic banks, the indirect declaration of the balance of payments statistics shall be carried out by domestic residents according to the provisions stipulated in the Operating Procedures for the Declaration of Balance of Payments Statistics via Financial Institutions (Trial), the Declaration Form for Foreign-related Receipts, the Application Form for Overseas Remittances, or the Advisory Notice on External Payments/Acceptances shall be completed. The nature of such transactions shall be declared according to the actual nature of the transaction conducted between the domestic resident and the non-resident. Regarding the verification and writing-off of imports and exports for collections and payments made by domestic non-residents from/to domestic residents via domestic banks, domestic residents are not required to fill out again the Declaration Form for Information on the Special Page used for Verification and Writing-off of Export Foreign Exchange Proceeds (Domestic Income), the Application Form for Domestic Remittances, and the Advisory Notice for Domestic Payments/Acceptances. (III) The declaration of receipts of foreign exchange by domestic residents from domestic non-residents When domestic payment banks handle payments made by domestic non-residents to domestic residents, the domestic payment banks shall make the note in the payment remark of the payment message NRA payment (or OSA payment) (if the payment is handled via an offshore account of domestic non-residents so as to facilitate the banks recognition of the source of payment, and shall inform the domestic residents that the declaration must be handled in a timely manner. When domestic collection banks receive the aforesaid payment made by domestic non-residents, the domestic collection banks shall inform, urge, and direct the domestic residents to handle the indirect declaration of the balance of payments statistics in a timely manner. When domestic residents receive foreign exchange payments made by domestic non-residents, the domestic residents shall fill out the Declaration Form for Foreign-related Income, and the nature of the transaction shall be declared according to the actual nature of the transaction carried out between the domestic resident with and the domestic non-resident. The wording receipt of foreign exchange payment from domestic non-resident shall be noted in the transaction remark area, preceding the description of this transaction deal according to the existing regulations. (IV) The declaration of foreign exchange payments made by domestic residents to domestic non-residents When domestic payment banks handle foreign exchange payments made by domestic residents to domestic parties, the domestic payment banks shall inquire the domestic residents about the conditions of the receipt so as to judge whether the receivers are domestic non-residents. If the receivers are domestic non-residents, the said banks shall request the domestic residents to fill out the Application Form for Overseas Remittances or the Advisory Notice of External Payments/Acceptances, and the nature of the transaction shall be declared according to the actual nature of the transaction between the domestic resident and the domestic non-resident. The wording payment to domestic non-resident shall be noted in the transaction remark area, preceding the description of this transaction according to the existing regulations. (V) From August 1, 2009, an indirect declaration of balance of payments statistics shall be made for foreign exchange collections and payments made by domestic non-residents via domestic banks from/to domestic residents according to the provisions of this Circular. (e) For the time being, RMB collections and payments made by domestic non-residents via domestic banks from/to domestic residents shall not be subject to the indirect declaration of balance of payments statistics. III. Collections and payments made by foreign embassies and consulates in China and by representative offices of international organizations in China from/to overseas parties shall be declared under the corresponding item service - governmental services not mentioned elsewhere. Collections and payments made by foreign embassies and consulates in China as well as those by representative offices international organizations in China from/to domestic parties will not be subject to the indirect declarations of balance of payments statistics. IV. Collections and payments made between domestic non-residents via domestic banks will not be subject to the indirect declarations of balance of payments statistics. V. Non-residents and residents as referred to in this Circular include entities and individuals. Domestic non-residents refer to non-residents making collections and payments via domestic banks, and include non-residents who open accounts in domestic banks that are entitled to engage in offshore banking business according to the relevant laws and regulations. VI. The foreign exchange administrative departments and branches of the SAFE shall transmit this Circular to the central sub-branches, sub-branches, as well as to local commercial banks, rural credit cooperatives, and foreign banks within their jurisdictions in a timely manner upon receipt of this Circular. Regarding any questions arising from implementation of this Circular, please provide feedback to the SAFE in a timely manner. Telephone number: (010)68402373, 68402447. June 17, 2009 2009-07-17/en/2009/0717/694.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 implement the Circular of the State Council on Printing and Distributing the Reform Plan on the Registered Capital Registration System (Guofa No. 7 [2014]) and the Circular of the General Office of the State Council on Accelerating Implementation of the Reform on the Registered Capital Registration System (Guobanhan No. 14 [2015]), some regulatory documents on foreign exchange administration are nullified and modified as follows: I. The Circular of the State Administration of Foreign Exchange on the Implementation of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals (Huifa No. 38 [2008]) is nullified. II. Article 2 under the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Measures for Administration of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals (Huifa No. 27 [2012]) and Article 18 Paragraph (I) of the attached Measures for Administration of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals are deleted. Article 8 Paragraph (I) of the attached Measures for Administration of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals is modified into “having independent legal person qualification.” The sequence of the relevant provisions is adjusted accordingly. III. Article 6 Paragraph (V) under the Appendix II to the Circular of the State Administration of Foreign Exchange on Printing and Distributing of the Regulations for Foreign Exchange Administration on Trade in Services (Huifa No. 30 [2013]), namely, the Rules for Implementation of the Guidelines on Foreign Exchange Administration for Trade in Services, is modified into “external payment under profit, dividend and bonus: the board resolution on profit distribution relating to this outward remittance.Interim dividend and bonus attributable to an overseas shareholder and payable by a domestic institution according to the law; External payment under the profit attributable to a foreign partner in a foreign-invested partnership: resolution on profit distribution to partners; Receipt of foreign exchange under profit, dividend and bonus: resolution on disposal of profit and financial statements of an overseas institution for relevant year(s).” IV. Article 6 of the Circular of the State Administration of Foreign Exchange and the Ministry of Construction on Issues Related to Regulating Foreign Exchange Administration of the Real Estate Market (Huifa No. 47 [2006]) is modified into “a foreign-invested real estate enterprise which has not obtained the State-owned Land Use Certificate or whose capital fund for a development project has not reached 35% of the total project investment is not allowed to make borrowings from overseas. Nor shall a foreign exchange authority conduct external debt registration and approve of foreign exchange settlement and verification with respect of external debts.” V. In the Appendix 2 to the Circular of the State Administration of Foreign Exchange on Promulgating the Measures for Administration of External Debt Registration (Huifa No. 19 [2013]), i.e., the Operating Guidelines on Administration of External Debt Registration, Paragraph 2(2) and (3) (Principles for review) of Section I (Registration of External Debt Contract Execution for Non-banking Debtors) are deleted; Paragraph 6(3) thereof is modified into “a foreign-invested real estate enterprise which has not obtained the State-owned Land Use Certificate or whose capital fund for a development project has not reached 35% of total project investment is not allowed to make borrowings from overseas. Nor shall a foreign exchange authority conduct external debt registration and approve of foreign exchange settlement and verification with respect of external debts.” The sequence of the relevant provisions is adjusted accordingly. VI. Article 7 Paragraph 1 of the Circular of the State Administration of Foreign Exchange on Foreign Exchange Administration for Overseas Loans Extended by Domestic Enterprises (Huifa No. 24 [2009]) is modified into “lenders and borrowers shall be organized and registered according to the law” VII. Article 14 of the Circular of the State Administration of Foreign Exchange on Releasing the Provisions for the Centralized Operations and Administration of Foreign Exchange Funds of Internal Members of Domestic Enterprises (Huifa No. 49 [2009]) is modified into “domestic enterprises engaging in the foreign currency fund pool business shall be organized and registered according to the law and have not violated any laws or regulations on foreign exchange administration in the last two years.” VIII. In the Appendix 1 to the Circular of the State Administration of Foreign Exchange on Further Improving and Adjusting the Policies on Foreign Exchange Administration of Direct Investments (Huifa No. 59 [2012]), i.e., Operating Guidelines for Foreign Exchange Business for Direct Investment under the Capital Account(SAFE Version), Paragraph 2 (Principles for review) of Article 1.14, “Domestic Enterprises Engaging in the Foreign Currency Fund Pool Business” is modified into “domestic member enterprises applying for engaging in the foreign currency fund pool business shall be organized and registered according to the law and independently bear legal liabilities”;Paragraph 1 (Principles for review) of Article 2.8, “Registration of the Quota for Overseas Loans Extended by Domestic Institutions” is modified into “lenders and borrowers shall be organized and registered according to the law.” IX. In the Appendix to the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Operating Guidelines on the Foreign Exchange Business under the Capital Account (2013 version) (Huizongfa No. 80 [2013]), i.e., the Operating Guidelines on the Foreign Exchange Business under the Capital Account, Paragraph 2 (Principles for review) of Article 2.10 “domestic enterprises engaging in the foreign currency fund pool business” is modified into “domestic member enterprises applying for engaging in the foreign currency fund pool business shall be organized and registered according to the law and independently bear legal liabilities”;Paragraph 1 (principles for review) of Article 3.7 “registration of the quota for overseas loans extended by domestic institutions” is modified into “lenders and borrowers shall be organized and registered according to the law”; Paragraph 2(2) and (3) (Principles for review) of Article 4.2, “registration of external debt contract execution for non-banking debtors” are deleted; and Paragraph 6(3) is modified into “a foreign-invested real estate enterprise which has not obtained the State-owned Land Use Certificate or whose capital fund for a development project has not reached 35% of total project investment is not allowed to make borrowings from overseas. Nor shall a foreign exchange authority conduct external debt registration and approve of foreign exchange settlement and verification with respect of external debt.” The sequence of the relevant provisions is adjusted accordingly. The Circular will take effect as of the date of promulgation. The General Affairs Department of the State Administration of Foreign Exchange May 4, 2015 2015-06-24/en/2015/0624/763.html
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On February 18, 2016, Pan Gongsheng, Deputy Governor of the People's Bank of China and Administrator of the State Administration of Foreign Exchange (SAFE), met with Colm Kelleher, President at Morgan Stanley, in Beijing. The two sides exchanged ideas on various issues, such as the world economy, China's economy, recent fluctuations in the global financial markets and monetary policies of major economies. 2016-03-16/en/2016/0316/1197.html
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On February 28, 2016, Pan Gongsheng, Deputy Governor of the People's Bank of China and Administrator of the State Administration of Foreign Exchange (SAFE), met with Nathan Sheets, Under Secretary of the US Department of the Treasury, in Beijing. The two sides exchanged ideas on various issues, such as macroeconomic conditions, capital flows, and monetary policies in China and the US. 2016-03-16/en/2016/0316/1196.html
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FILE: Catalogue of Major Existing Laws аnd Regulations in Effect on Foreign Exchange Administration (as of June 30, 2015) 2015-09-01/en/2015/0901/767.html
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QFII investment quota of Yale University approved 2006-08-10/en/2006/0810/796.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 in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; all designated Chinese-funded foreign exchange banks, and China UnionPay Co., Ltd.: To standardize and facilitate operation by banks and individuals in respect of foreign exchange business and improve classified regulation of individual players for foreign exchange trading, the State Administration of Foreign Exchange (SAFE) decides to further improve the administration of individual foreign exchange as the individual foreign exchange business monitoring system is launched. The relevant issues are hereby notified as follows: I. The individual foreign exchange business monitoring system will be launched nationwide on January 1, 2016, and at the same time, the management information system for foreign exchange settlement and sales for individuals will be no longer in use. Banks that have the qualifications for handling foreign exchange settlement and sales (bank) shall handle individual foreign exchange business such as settlement and purchases of foreign exchange through this monitoring system and report relevant business data accurately, completely and in time. II. In handling foreign exchange business, individuals shall observe relevant regulations in respect of the administration of individual foreign exchange and are not allowed to evade quota and authenticity management in a split way. If doing so, these individuals will be put on a watch list by the SAFE and its branches and sub-branches (foreign exchange authorities). (I) Foreign exchange authorities will issue the Risk Reminder Notification for Individual Foreign Exchange Business (see Appendix 1) as a risk reminder to individuals who lend their quota to another individual for the evasion of quota and authenticity management. If this happens again, these individuals will be put on a watch list by foreign exchange authorities. (II) Foreign exchange authorities will put individuals who borrow another individual's quota for the evasion of quota and authenticity management on a watch list and notify them through the Notification on Watch List for Individual Foreign Exchange Business (see Appendix 2) issued by banks. (III) The watch period of an individual on a watch list is the year the individual is put on the watch list and the two consecutive years that follow. During this period, the individual has to present his/her valid ID card and evidencing materials indicating the trading amount to go through procedures for settlement and sales of foreign exchange for individuals. Banks shall review relevant evidencing materials in strict accordance with the authenticity review principles. III. Banks shall cooperate with foreign exchange authorities in inspecting individuals and institutions involved in the evasion of quota and authenticity management, and report, within 20 days since the day the individual foreign exchange business monitoring system pushes relevant information, the purposes of individual settlement of foreign exchange, the sources of funds for purchases of foreign exchange and other information required by foreign exchange authorities. IV. Foreign exchange authorities and banks shall access the individual foreign exchange business monitoring system through the SAFE's application service platform. The details are as follows: Type of user Way of access Interface Foreign exchange authorities Intranet http://100.1.48.51:9101/asone/ Banks External net http://banksvc.safe (Main login interface) http://asone.safe:9101/asone/ (Backup login interface) Foreign exchange authorities and banks shall assign technicians and business operators for the daily maintenance of the individual foreign exchange business monitoring system to ensure smooth operation of the system. V. In case of a nationwide systemic error in the individual foreign exchange business monitoring system, foreign exchange authorities and banks shall take emergency measures in accordance with the Emergency Plan for the Individual Foreign Exchange Business Monitoring System (see Appendix 3) to ensure the smooth and timely handling of individual foreign exchange business. VI. The foreign exchange settlement and sales under the individual remittance business of China UnionPay Co., Ltd., and individual domestic and foreign currency exchange business handled by franchised institutions for domestic and foreign currency exchange for individuals (franchised institutions) shall be handled in accordance with this Circular. Where there are provisions as otherwise stated in respect of foreign exchange administration, those provisions shall prevail. VII. This Circular shall take effect as of January 1, 2016. At the same time, the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Regulating Operations of Foreign Exchange Settlement and Sales for Individuals by Banks (Huizongfa No. 90 [2007]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Promulgating the Emergency Plan for the Management Information System for Foreign Exchange Settlement and Sales for Individuals (Huizongfa No. 49 [2008]), the Circular of the State Administration of Foreign Exchange on Printing and Distributing the Interim Measures for Administration of Foreign Exchange Settlement and Sales for Individuals through E-banking (Huifa No. 10 [2011]), the Circular of the State Administration of Foreign Exchange on Trial Implementation of the "Watch List" Management of Individual Splitting Foreign Exchange Settlement and Sales by Banks Engaging in E-Channeled-based Foreign Exchange Settlement and Sales for Individuals (Huifa No. 41 [2011]), the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Regulating the Review of Access to Foreign Exchange Settlement and Sales for Individuals through E-banking (Huizongfa No. 77 [2013]) will be nullified. In case of any discrepancies with prior regulations, this Circular shall prevail. Upon receipt of this Circular, all branches and foreign exchange administrative departments of the SAFE should immediately forward it to the central sub-branches, sub-branches, urban and rural commercial banks, foreign banks and franchised institutions. The designated Chinese-funded foreign exchange banks shall, upon receipt of this Circular, forward it immediately to their branches. Please report any problems encountered in implementation to the SAFE in a timely manner. Business Enquiry Hotline: 010-68402673 (Bank business) 010-68402295 (Franchised institution business) Technology Enquiry Hotline: 010-68402674 Appendix: 1. Risk Reminder Notification for Individual Foreign Exchange Business 2. Notification on Watch List for Individual Foreign Exchange Business 3. Emergency Plan for the Individual Foreign Exchange Business Monitoring System State Administration of Foreign Exchange December 25, 2015 FILE: Risk Reminder Notification for Individual Foreign Exchange Business FILE: Notification on Watch List for Individual Foreign Exchange Business FILE: Emergency Plan for the Individual Foreign Exchange Business Monitoring System 2016-01-13/en/2016/0113/775.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: To improve the domestic and foreign currency exchange services for domestic individuals, and facilitate and regulate the franchise domestic and foreign currency exchange business for individuals (“franchise business”), this Circular is hereby issued to clarify the issues regarding the provision of the exchange services by institutions that conduct the franchise business(“franchise institutions”) through the Internet. I. For the purpose of this Circular, the term “exchange through the Internet” refers to the process during which a domestic individual places an order with a franchise institution for foreign currency banknotes or electronic traveler’s checks and completes payment for the order through electronic channels such as the Internet and mobile terminals, and withdraws the banknotes or traveler’s checks through an outlet of the franchise institution or other eligible outlet. II. A franchise institution providing the exchanges through the Internet shall meet the following conditions: (I) having a good credit standing, and being free from significant noncompliance with the regulations on the franchise business over the last 2 years; (II) having a necessary administrative system in place for the business; (III) having software & hardware facilities and personnel required by the business; and (IV) other requirements imposed by the SAFE. III. Prior to the provision of the exchanges through the Internet, the head office of a franchise institution should ensure that the business is filed with a branch or an administrative department of the State Administration of Foreign Exchange in a relevant province, autonomous region or municipality directly under the Central Government (“SAFE branch”) in writing or via email. The documents required for the filing include: (I) the business process, roles and responsibilities of the personnel, description of the ordering system, management of the provision for payment, description of customer information validation, and the anti-money laundering system for the exchanges through the Internet; (II) description of the ability to record each transaction of the exchanges through the Internet; (III) copies of payment & settlement agreements with banks and third party payment institutions, cooperation agreements with partners, and exchange agreements with customers; and (IV) other materials required by a SAFE branch. IV. A SAFE branch shall verify the filings submitted by a franchise institution within its jurisdiction in an appropriate manner; if there is no dissent within 20 working days, the franchise institution can provide exchanges through the Internet at its sole discretion. V. A franchise institution shall comply with the following requirements for the exchanges through the Internet: (I) the ordering service may be provided to customers through channels such as proprietary website, a partner’s website or mobile terminal. For the ordering service provided through channels other than the proprietary website, the responsibilities of institutions and customers must be indicated on the ordering interface, and that the exchange service is provided by the franchise institution must be specified; (II) the franchise institution may, based on its circumstances, provide compliant online payment channels (such as debit card online banking and third party payment) to customers, and input the completed payment into the individual foreign exchange monitoring system; (III) the franchise business conducted by the franchise institution must not exceed the relevant requirements on the provision for payment and the exchange quota; (IV) the franchise institution shall verify a customer's identity, ensure the ordering customer is the withdrawer, and keep the photocopies or electronic copies of the customer's personal ID certificate for the withdrawal; (V) the head office of the franchise institution should include the separate statistics of the exchanges through the Internet in the current franchise business statements. VI. The outlets for the withdrawal of foreign currency banknotes (including traveler’s checks) shall be owned by the franchise institution. A franchise institution approved to conduct nationwide franchise business may establish withdrawal outlets across the country at its sole discretion; if approved of conducting franchise business within the jurisdiction of a particular SAFE branch, the franchise institution may, at its sole discretion, establish outlets within the business range, but must not establish any outlet for offline withdrawal outside the jurisdiction. For the addition of other types of outlets (limited to foreign currency exchange points under outlets of banks or other franchise institutions, or under the SAFE itself), a new outlet must be able to ensure the security of banknotes and travelers' checks and be equipped with video monitoring facilities, and the head office of the franchise institution is required to file with the local SAFE branch by presenting the following documents; if there is no dissent within 20 working days, the new outlet may commence doing business at its sole discretion: (I) description and relevant qualification certificates of the withdrawal outlet (such as license of a financial institution, letter of confirmation for foreign currency exchange outlet, and license of domestic and foreign currency exchange franchise businesses for individuals); (II) documents evidencing the existence of equipment and facilities for the withdrawal, including but not limited to monitor video and cash storage cabinet; (III) cooperation agreement between both parties and their relevant management mechanisms; and (IV) other materials required by a SAFE branch. VII. Every SAFE branch should intensify ex-post regulation of the franchise institutions within its jurisdiction, prevent and timely address the default and compliance risks of the franchise institutions, protect the rights and interests of consumers, and watch out for the implementation of administrative measures regarding the authenticity and financial security of customers for the purpose of effective risk control during its daily regulation. Any abnormality must be immediately dealt with and reported to the SAFE. VIII. This Circular shall enter into force as of the date of issuance. In case of any inconsistency between previous provisions and this Circular, this "Circular" shall prevail. The SAFE branches shall, upon receipt of this Circular, promptly forward it to the central sub-branches and sub-branches as well as the franchise institutions within their respective jurisdiction. State Administration of Foreign Exchange September 28, 2015 2015-12-09/en/2015/1209/771.html