Legislation roundup: FX in Shanghai, HK-China fund offerings and financial industry

November 18, 2015 | BY

Katherine Jo

The PBOC and regulators have enhanced currency convertibility in the Shanghai FTZ, permitted the selling of funds between the mainland and Hong Kong and defined the categories of financial enterprises

Free Trade Zones

People's Bank of China and Six Other Departments, Plan on Further Promoting the Pilot Project for Financial Relaxation and Innovation in the China (Shanghai) Pilot Free Trade Zone to Accelerate the Development of Shanghai as an International Financial Center

中国人民银行及其他七部门进一步推进中国（上海）自由贸易试验区金融开放创新试点 加快上海国际金融中心建设方案

The Shanghai FTZ will be the first in gradually increasing currency convertibility in various renminbi items on the capital account. Renminbi and foreign currency funds in free trade accounts will be managed in accordance with the macro prudential convertibility principle.

Further reading

Implementing Rules for the Macro Prudential Administration of Offshore Financing under Separate Accounting and Cross-border Fund Flows in the China (Shanghai) Pilot Free Trade Zone

Implementing Rules for Foreign Exchange Control to Support the Establishment of the China (Shanghai) Pilot Free Trade Zone

Opinions on Financial Support for the Establishment of the China (Shanghai) Pilot Free Trade Zone

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Capital Markets

People's Bank of China and State Administration of Foreign Exchange, Operational Guidelines for the Administration of the Proceeds from Cross-border Offerings and Sales by Mainland and Hong Kong Securities Investment Funds

中国人民银行、国家外汇管理局内地与香港证券投资基金跨境发行销售资金管理操作指引

The maximum net outward remittance of proceeds from mainland offerings by all Hong Kong funds and the maximum net inward remittance of proceeds from Hong Kong offerings by all mainland funds are initially set at the equivalent of Rmb300 billion.

Further reading

Circular on the Issue of Provisionally Exempting the Proceeds Derived in China by QFIIs and RQFIIs from the Transfer of Stocks and Other Such Equity Investment Assets from Enterprise Income Tax

Circular on Tax Policies Relevant to the Pilot Project for the Mechanisms to Provide Mutual Trading Access Between the Shanghai and Hong Kong Stock Markets

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Financial Industry

People's Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission and National Bureau of Statistics, Provisions on the Criteria for Defining the Types of Financial Enterprises

中国人民银行、中国银行业监督管理委员会、中国证券监督管理委员会、中国保险监督管理委员会、国家统计局金融业企业划型标准规定

Financial enterprises are divided into four categories, money financial services, capital market services, insurance industry and other financial industries.

Further reading

PRC Regulations for the Administration of Foreign-invested Banks (2nd Revision)

Lifting bans on foreign banks

PRC Regulations for the Administration of Foreign-funded Insurance Companies (Revised)

Insurance Law changes as industry heats up

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