To further promote the smooth assessment of the performance of banks in implementing the regulations on foreign exchange administration, and to make sure the performance assessment is more scientific and equitable, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on the Amendment to the Measures for Assessment of Banks' Implementation of Regulations on Foreign Exchange Administration (Huifa No. 26 [2015], "The Circular").

The amendment is highlighted as follows: first, refining assessment items. Based on the streamlining and adjustment of the original assessment indicators, efforts have been made to further refine the assessment criteria and scoring methods, making sure relevant requirements are more concise and easier to understand and implement. Second, stressing advancement with the times. The assessment items are updated based on the foreign exchange situations and the developments of regulatory requirements, with the assessment mechanism for bidirectional adjustment of cross-border capital flows introduced to enhance the effectiveness of foreign exchange regulation and control. Third, optimizing assessment process. The impact of differences in business category and size between banks on assessment outcomes has been fully considered to make sure the assessment and rating are more equitable and reasonable. Fourth, highlighting assessment of internal control management in banks. The specific requirements have been proposed to assess head offices' and branches' internal control of foreign exchange business, forcing banks to better implement the principles of "knowing your customers, understanding your business and exercising due diligence". Fifth, improving implementation mechanism of violation rectification. A bank feedback and rectification reporting system is built to urge banks timely implement the violation rectification measures and give feedback on rectification results while subsequent tracking is enhanced to effectively improve the effectiveness of the assessment.

The Circular shall come into force as of the date of release.