State Administration of Foreign Exchange, Foreign Exchange Control on Securities Investments in China by Qualified Foreign Institutional Investors Tentative Provisions

Promulgated: November 28 2002
Effective: December 1 2002
Interpreting authority: State Administration of Foreign Exchange

Main contents: Part Two of the Provisions specifies the documents requiring of a domestic commercial bank applying for custodian qualification. It also lists the duties of a custodian in respect of foreign exchange control, for instance, to handle the relevant foreign exchange settlement, sale, receipt and payment business and renminbi fund settlement business of a qualified foreign institutional investor (QFII) (Article 6). Part Three sets forth the application for an investment quota by a QFII. Article 8 stipulates that the investment quota of a single QFII should be the renminbi equivalent of not less than US$50 million and not more than the equivalent of US$800 million. Part Three also specifies the procedure for assigning the investment quota (Articles 11-14). Part Four concerns the opening and closing of special renminbi accounts of QFIIs. Part Five deals with the remittance of principal into China or remittance of principal or earnings out of China by QFIIs. Part Six concerns annual inspection.
Related legislation: PRC Foreign Exchange Control Regulations (2nd Revision), Aug 5 2008, CLP 2008 No.8 p77 andAdministration of Securities Investments in China by Qualified Foreign Institutional Investors Tentative Procedures, Nov 5 2002, CLP 2002 No.10 p46