State Administration of Foreign Exchange, Plan for the Launch of Pilot Projects for Direct Investment in Overseas Stock Markets by Domestic Individuals

Issued: August 20 2007

Applicability: The term "domestic individuals" refers to Chinese citizens who hold a PRC resident identity document (Investors) (Section Two).

Main Contents: During the pilot period, the scope of investment shall start with securities products publicly listed and traded on the Hong Kong Stock Exchange. The purchase, sale and custody of securities shall be handled through the Bank of China International. Investors shall use their own foreign exchange or purchase foreign exchange for investment. Purchase of foreign exchange for the purpose of such overseas securities investment (Securities Investment) shall not be subject to the annual total quota for purchase of foreign exchange as stipulated in the Implementing Rules for the Measures on the Administration of Foreign Exchange of Individuals (Section Two). Earnings from investment and the foreign exchange purchased for the investment principal may be transferred to the foreign exchange savings account of the individual in China, or may be settled in the individual's foreign exchange account for securities investment (Section Three).