China Cancels Restrictions on Foreign Investment in Securities Futures

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The Chinese central government has further loosened restrictions on the participation of foreign investors in China’s domestic financial markets.

On 7 May the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) jointly issued the “Regulations Concerning the Management of Funds Invested by Offshore Institutional Investors in Domestic Securities Futures” (境外机构投资者境内证券期货投资资金管理规定).

The Regulations stipulate the following:

  1. Cancellation of the domestic securities investment quota administrative requirements for qualified foreign institutional investors and renminbi qualified foreign institutional investors; implementation of registration-based management of the cross-border fund remittances and exchanges of qualified investors.
  2. Implementation of integrated regulation for both domestic and foreign currencies, allowing qualified investors to actively select the currency and time for the remittance of funds.
  3. Large-scale simplification of procedures for the remittance of the profits of qualified investors from domestic securities investment. Cancellation of requirements for investment return special auditing reports and tax filings issued by Chinese-registered accountants, to be replaced with tax payment commitment letters.
  4. Cancellation of restrictions on custodian numbers, allowing a single qualified investor to entrust multiple domestic custodians, as well as implement a chief reporting person system.
  5. Improvement to administrative requirements for the forex risk and investment risk of the domestic securities investments of qualified investors.

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