For the purpose of meeting the growing demand for domestic and foreign currency exchange by individuals, in August 2008 the SAFE initiated a pilot implementation of domestic and foreign currency exchange business to individuals in the localities of Beijing and Shanghai. Building on the results of the pilot implementation, the SAFE recently expanded the range of this pilot implementation and perfected the Measures for the Administration of the Pilot Implementation of Domestic and Foreign Currency Exchange Franchise Business to Individuals.
There are four aspects to this expansion: first, the range of the pilot implementation has been expanded to 13 provinces, municipalities, and autonomous regions including Beijing and Shanghai, as well as 4 cities specifically designated in the state plan; second, the number of franchise operations institutions has been increased, and cross-regional chains of franchise operations institutions via the establishment of branches in the pilot areas are encouraged; third, relevant exchange procedures have been streamlined, viz. for small amounts of exchange business under USD 500 for each transaction, after completing the relevant procedures, the operations institutions are allowed to append the transaction data to the information system for the administration of settlement and sales of foreign exchange to individuals; fourth, regulatory compliance and operational conveniences have been taken into account in the pilot implementation, and the requirements for supervision of franchise operations institutions have been clarified.
The expansion is expected to further satisfy the demand for domestic and foreign currency exchange by individuals in foreign-related economically strong regions, international tourist hubs, as well as border/port regions (apart from Beijing and Shanghai). The move will also stimulate fair competition in the market of domestic and foreign currency exchange to individuals, make the most of the advantages of the franchise operations institutions with respect to their business hours, vast diversity of exchange currencies, as well as their operational flexibility, and will upgrade the overall level of Chinas domestic and foreign currency exchange services to individuals.