People's Bank of China, Administration of Foreign Exchange Settlement and Sale Business by Designated Foreign Exchange Banks Tentative Measures

Promulgated: November 16 2002
Effective: December 1 2002
Interpreting authority: People's Bank of China (PBOC)
Applicability: For the purposes of the Measures, "designated foreign exchange banks" are financial institutions authorized by the People's Bank of China to engage in foreign exchange settlement and sale business, including wholly foreign-owned banks, branches of foreign banks, joint venture banks and other approved financial institutions as defined in the PRC Administration of Foreign-invested Financial Institutions Regulations, (Article 3.1). Where previous provisions are in conflict with the Measures, the Measures shall prevail (Article 46).

Main contents: Entry into the foreign exchange settlement and sale business is subject to the conditions set out in the Measures (Article 12). Approval for entry is under the joint jurisdiction of the People's Bank of China and State Administration of Foreign Exchange (SAFE) (and their respective branches) (Article 14). The working balance a designated foreign exchange bank may keep for the purposes of such business shall comply with the limits approved by SAFE (Article 18). Subject to SAFE approval, a designated foreign exchange bank may use its renminbi working capital to purchase foreign exchange for its working balance for the settlement and sale business (Article 23). Wholly foreign-owned banks approved to engage in renminbi business may purchase foreign exchange using their renminbi net earnings and remit the purchased foreign exchange offshore (Article 31). The Measures also set out provisions regarding foreign exchange settlement and sales by designated foreign exchange banks for their own accounts and for the account of their clients (Parts Four and Five).
Related legislation: PRC Foreign Exchange Control Regulations (2nd Revision), Aug 5 2008, CLP 2008 No.8 p77 and PRC Administration of Foreign-invested Financial Institutions Regulations, Dec 12 2001, CLP 2002 No.1 p5
Repealed legislation: Article 4 of the Settlement, Sale and Payment of Foreign Exchange Business of Wholly Foreign-owned Banks Implementing Rules, Jun 18 1996; Settlement and Sale of Foreign Exchange by Foreign-invested Enterprises through Banks Announcement, Jun 20 1996 and Questions Relevant to the Examination and Approval of Foreign Exchange Settlement and Sale Businesses of Branches and Sub-branches of Wholly State-owned Commercial Banks Official Reply, 2001