Legislation roundup: Environmental protection, Hong Kong-Shanghai stock linkup and FX funds for MNCs

Environmental protection

PRC Environmental Protection Law (Revised)
中华人民共和国环境保护法 (修订)

An association that is registered with the civil affairs department of a government at the level of municipality divided into districts or above, that has been active for at least five years in succession and that does not have a record of breaches of discipline may institute a public interest lawsuit. The new Law also provides for daily fines, intensifying the penalties for violations of environmental laws. Furthermore, the environmental protection authorities have the power to place under seal or seize the facilities and equipment of business operators operating in violation of the law and detain the persons responsible.

See the full translation .

Further reading
Opinion: Get ready for new environment laws
Measures for Assessment of the Environmental Credit of Enterprises (Trial Implementation)


Capital markets

Shanghai Stock Exchange, Implementing Rules for the Pilot Mechanism for Linking the Trading on the Shanghai and Hong Kong Stock Markets (Draft for Comments)
上海证券交易所沪港股票市场交易互联互通机制试点实施细则 (征求意见稿)

The Shanghai Stock Exchange linked stocks for the “Hong Kong-Shanghai Link” include the component stocks of the SSE 180 Index, the component stocks of the SSE 380 Index and the A shares of A+H share listed companies listed on the Shanghai Stock Exchange. Stocks flagged by the Shanghai Stock Exchange with a risk warning (i.e. ST or *ST stocks) and stocks quoted and traded in foreign currencies (i.e. B shares) are excluded. The Stock Exchange of Hong Kong linked stocks include the component stocks of the Hang Seng Composite LargeCap Index, the component stocks of the Hang Seng Composite MidCap Index and the H shares of A+H share listed companies. The Draft additionally sets forth special system arrangements for the trading of Shanghai Stock Exchange linked stocks, e.g. the trading method is limited to competitive trading, with block trading not supported for the time being.

See the digest for more details.

Further reading
Hong Kong and China dual-share trading
PRC Securities Law (Amended)


Foreign exchange

State Administration of Foreign Exchange, Provisions for the Administration of the Centralised Operation of Foreign Exchange Funds by Multinational Corporations (Trial Implementation)
国家外汇管理局跨国公司外汇资金集中运营管理规定 (试行)

The Provisions no longer specify separate administrative systems for the current account and capital account, and permit multinational corporations to simultaneously or separately open domestic and international master foreign exchange fund accounts, centrally manage the foreign exchange funds of domestic and foreign member enterprises, carry out centralised receipt and payment of foreign exchange funds and net settlement and jointly share in all or part of the foreign debt limits and the limits on the extension of foreign loans in the account. However, in special sensitive industries, participation and sharing in the centralised foreign debt limit is not permitted.

See the full translation .

Further reading
Implementing Opinions on the «Shanghai Municipality, Provisions on Encouraging the Establishment of Regional Headquarters by Multinational Corporations
The battle for MNC investment heats up