Legal basis: Provisions on the Administration of Domestic Securities and Futures Investment Funds of Overseas Institutional Investors.
Article 1 These Provisions are formulated in accordance with the Law of the People's Republic of China on the People's Bank of China, the Regulations of People's Republic of China (PRC) on Foreign Exchange Control and other relevant provisions in order to regulate the administration of domestic securities and futures investment by overseas institutional investors.
Article 2 The term "foreign institutional investors" as mentioned in these Provisions refers to qualified foreign institutional investors who invest in the domestic securities and futures market with the approval of China Securities Regulatory Commission (hereinafter referred to as China Securities Regulatory Commission) and RMB qualified foreign institutional investors (hereinafter referred to as qualified investors).
Article 3 A QFII shall entrust a domestic custodian (hereinafter referred to as the custodian) to handle the relevant procedures required by these Provisions on its behalf. Where a QFII entrusts more than two custodians, it shall designate 1 custodian as the custodian.
Chief reporter (if there are only 1 custodian, the custodian will be the chief reporter by default), responsible for handling industrial and commercial registration and other matters on his behalf.
Article 4 The People's Bank of China, the State Administration of Foreign Exchange and their branches shall supervise, manage and inspect the fund accounts, fund receipts, payments and remittances of QFII according to law.
Article 5 The State Administration of Foreign Exchange shall register and manage the domestic securities and futures investment funds of qualified investors.
Article 6 After obtaining the securities and futures business license of China Securities Regulatory Commission, a QFII shall entrust the chief reporter to submit the following materials and apply to the State Administration of Foreign Exchange for industrial and commercial registration:
(1) Registration Form of Overseas Institutional Investors (see Annex 1).
(2) A photocopy of the securities and futures business license.
The chief reporter shall earnestly perform his duties and strictly examine the authenticity of the materials provided by qualified investors. After handling the industrial and commercial registration, the State Administration of Foreign Exchange will feed back the relevant industrial and commercial registration certificate to the chief reporter.
Article 7 QFII shall open one or more special accounts for QFII with the custodian according to the business registration certificate issued by the State Administration of Foreign Exchange and the needs of investment and fund remittance.
Qualified investors who only remit foreign currency funds must open a special foreign currency account and a special RMB deposit account corresponding to the special foreign currency account; If only RMB funds are remitted, a special RMB deposit account must be opened; Where RMB and foreign currency funds are remitted at the same time, RMB special deposit accounts, foreign currency special accounts and RMB special deposit accounts corresponding to foreign currency special accounts shall be opened respectively, and the names of the two types of RMB special deposit accounts shall be given.
Effect distinction.
Article 8 The income range of QFII's special foreign exchange account includes: the principal remitted by QFII from abroad and the foreign currency funds needed to pay relevant taxes (taxes, custody fees, audit fees, management fees, etc.). ), foreign currency interest income, funds transferred from foreign exchange derivatives transactions, funds transferred from RMB special deposit accounts corresponding to foreign currency special accounts, and other income that meets foreign exchange management regulations. Expenditure scope includes: transfer of foreign exchange settlement to RMB special deposit account corresponding to foreign currency special account, transfer of funds related to foreign exchange derivative transactions, remittance of principal and income abroad, and other expenditures that meet foreign exchange management regulations.
Article 9 Qualified investors shall open RMB special deposit accounts and/or RMB special deposit accounts corresponding to foreign currency special accounts in accordance with the relevant provisions of the People's Bank of China on the management of RMB settlement accounts of overseas institutions (for details on the opening and use of RMB special deposit accounts, please refer to Annex 2 "Operational Guidelines for the Management of Domestic RMB Accounts of Overseas Institutional Investors").
Article 10 Unless otherwise provided by laws, regulations and rules, no funds may be transferred between the special account of a QFII and other domestic accounts. Qualified investors who remit RMB and foreign currency funds at the same time shall not transfer funds between the two special RMB deposit accounts opened. The funds in the special account of QFII shall not be used for purposes other than domestic securities and futures investment and risk management based on hedging, unless otherwise stipulated by laws, regulations and rules.
No cash may be withdrawn from the special account of QFII.
Eleventh qualified investors special account funds deposit interest rate with reference to the relevant provisions of the people's Bank of China.
Article 12 QFII can independently choose the remittance currency for investing in domestic securities and futures. Qualified investors who remit foreign currency for investment can promptly notify the custodian to directly settle foreign currency funds needed for investment and transfer them to the RMB special deposit account corresponding to their foreign currency special account according to the investment plan. Qualified investors who remit RMB for investment can directly remit overseas RMB funds needed for investment into their RMB special deposit account according to the investment plan.
Thirteenth qualified investors shall entrust the custodian to handle the remittance procedures of the relevant investment principal and income.
Article 14 Where a QFII needs to remit the realized accumulated income, the custodian may handle the relevant fund remittance procedures for the QFII with the written application or instruction of the QFII and the letter of commitment issued by the QFII to pay taxes in full in accordance with the relevant tax laws and regulations of China.
In the liquidation of QFII (including product liquidation), the custodian can handle the remittance and cancellation procedures of relevant funds for QFII with the written application or instruction of QFII, the special audit report on investment income issued by China Certified Public Accountant and the tax filing form (except those that are not required to be provided according to regulations).
Article 15 QFII shall, in principle, keep the same currency for inward and outward funds used for domestic securities and futures investment, and shall not carry out cross-currency arbitrage between RMB and foreign currency.
Article 16 The derivatives transactions conducted by qualified investors in China are limited to qualified foreign exchange risk hedging products and financial derivatives, and the risk exposure of derivatives should be reasonably related to the investment risk exposure under domestic securities investment as the basis of transactions.
Article 17 The positions of foreign exchange derivatives held by qualified investors shall be controlled within the scale of RMB assets corresponding to their domestic securities and futures investments (excluding RMB deposit assets in RMB special deposit accounts, the same below) to ensure the principle of actual trading.
Article 18 Qualified investors may entrust foreign exchange derivatives business with RMB agency qualification (hereinafter referred to as foreign exchange derivatives business).
Article 21 Where a QFII changes its name, it shall, within 10 working days from the date of obtaining the securities and futures business license renewed by the China Securities Regulatory Commission, entrust the chief reporter to apply to the State Administration of Foreign Exchange for registration of change.
Where other important information such as the custodian is changed, the QFII shall entrust the chief reporter to apply to the State Administration of Foreign Exchange for registration of change within 10 working days from the date of change.
Where the chief reporter is changed, the QFII shall entrust a new chief reporter to apply to the State Administration of Foreign Exchange for registration of change within 10 working days from the date of change.
Where a QFII's business license is revoked due to institutional dissolution, bankruptcy procedures, takeover by a receiver or its own reasons, the QFII shall report to the People's Bank of China and the State Administration of Foreign Exchange through the chief reporter in time, realize its assets in principle and close the special account for QFII within 30 working days.
Article 22 When handling the inward and outward remittance of funds for qualified investors, the custodian shall examine the authenticity and compliance of the receipt and payment of the corresponding funds, and earnestly fulfill the obligations of anti-money laundering and anti-terrorist financing. Qualified investors shall cooperate with the custodian to fulfill the above obligations and provide true and complete data and information to the custodian.
Article 23 A custodian shall abide by the Measures for the Administration of RMB Bank Settlement Accounts (Order [2003] No.5 of the People's Bank of China), the Measures for the Administration of RMB Cross-border Receipt and Payment Information Management System (Yinfa [20 17] 126) and the Notice of the General Office of the People's Bank of China on Improving the Data Reporting Process of RMB Cross-border Receipt and Payment Information Management System (Yinban Fa)
Article 24 A custodian shall, in accordance with the Detailed Rules for the Implementation of Inter-bank Balance of Payments Statistics Declaration (Huifa [2015] No.27), the Guidelines for Inter-bank Balance of Payments Statistics Declaration (Huifa [2019] No.25) and the Statistical System for Foreign Financial Assets, Liabilities and Transactions (Huifa [20/9]
Article 25 Qualified investors who commit any of the following acts shall be punished by the State Administration of Foreign Exchange in accordance with the Regulations of People's Republic of China (PRC) on Foreign Exchange Control and other relevant provisions:
(1) Failing to go through the industrial and commercial registration as required.
(2) Failing to provide information and materials related to domestic securities and futures investment to the State Administration of Foreign Exchange or the custodian as required, or providing false information and materials.
(three) in violation of the relevant provisions of the account, the receipt and payment of funds, foreign exchange management and so on. In the process of domestic securities and futures investment.
(4) Violating the relevant foreign exchange control regulations in the course of conducting foreign exchange derivative transactions.
(five) other acts in violation of foreign exchange control regulations.
Article 26 If a QFII custodian commits any of the following acts in RMB business, it shall be punished by the People's Bank of China according to the Law of the People's Bank of People's Republic of China (PRC) and China. Those involved in foreign exchange business shall be punished by the State Administration of Foreign Exchange in accordance with the Regulations of People's Republic of China (PRC) on Foreign Exchange Control and other relevant provisions:
(1) Failing to go through the formalities for remittance of principal and income for qualified investors in accordance with regulations.
(2) Failing to open or close relevant accounts for qualified investors in accordance with regulations, or failing to go through the formalities of fund transfer and remittance for qualified investors in accordance with the prescribed scope of account income and expenditure.
(3) Failing to handle foreign exchange derivatives business for qualified investors as required.
(4) Failing to submit relevant information, materials or situation reports to the State Administration of Foreign Exchange as required.
(5) Failing to declare the balance of payments statistics and the settlement and sale of foreign exchange in accordance with regulations.
(six) other acts in violation of the provisions of the people's Bank of China and foreign exchange management.
Article 27 If an institution handling foreign exchange derivatives fails to handle relevant business for qualified investors as required, the State Administration of Foreign Exchange will punish it according to the Regulations of People's Republic of China (PRC) on Foreign Exchange Control and other relevant provisions.
Article 28 The materials submitted to the People's Bank of China and the State Administration of Foreign Exchange in accordance with these Provisions shall be in Chinese. If there are both foreign and Chinese versions, the Chinese version shall prevail.
Article 29 The People's Bank of China and the State Administration of Foreign Exchange shall be responsible for the interpretation of these Provisions.
Thirtieth these Provisions shall come into force as of June 6, 2020. Provisions on Foreign Exchange Management of Domestic Securities Investment by Qualified Foreign Institutional Investors (AnnouncementNo. 18 of the State Administration of Foreign Exchange), Notice of the State Administration of Foreign Exchange of the People's Bank of China on Relevant Issues Concerning the Management of Domestic Securities Investment by RMB Qualified Foreign Institutional Investors (Yinfa [20 18]No. 157) and other regulations of the State Administration of Foreign Exchange on the adjustment of cross-border fund management by qualified institutional investors.