General Office of the China Banking Regulatory Commission, Circular on Revising the Scope of Overseas Investment for Overseas Financial Management Services on Behalf of Customers of Commercial Banks

Issued: May 10 2007

Main Contents: Commercial banks offering overseas financial management services on behalf of customers are now allowed to invest in overseas stocks, provided that they comply with six conditions. For example, the funds invested in stocks may not exceed 50% of the net value of the total assets of any single financial management product; and the funds invested in a single stock may not exceed 5% of the net value of the total assets of any single financial management product. Also, the minimum sales amount for any single customer may not be less than Rmb300,000 (or the equivalent in a foreign currency). However, such commercial banks may not invest in hedge funds; and investment in commodity derivatives and securities of less than 'BBB' grade, as rated by an internationally recognized rating agency, are still not allowed, as before.

Related Legislation: Circular on Issues Relevant to Overseas Financial Management Services Offered by Commercial Banks on Behalf of Customers, 2006; Tentative Measures for the Administration of the Personal Financial Management Business of Commercial Banks, Sep 24 2005, CLP 2006 No.2 p.44; and Tentative Measures for the Administration of Overseas Financial Management Services Offered by Commercial Banks on Behalf of Customers, April 17 2006, CLP 2006 No.6 p.38