Notice of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign Exchange Management of Overseas Securities Investment of Fund Management Companies

Branches and foreign exchange administrations of the State Administration of Foreign Exchange in all provinces, autonomous regions and municipalities directly under the Central Government, and branches in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

In order to meet the reasonable needs of domestic residents, individuals and institutions for overseas financial investment and asset management, and standardize the foreign exchange management of overseas securities investment of fund management companies, according to the spirit of Announcement No.5 of the People's Bank of China in 2006, relevant issues are hereby notified as follows:

1. When a fund management company handles overseas securities investment business, it shall obtain the approval of the local branch of the State Administration of Foreign Exchange and the foreign exchange management department (hereinafter referred to as the "foreign exchange bureau") in advance, and obtain the qualification for foreign exchange business and the amount of overseas securities investment. Fund management companies can also apply for foreign exchange business qualifications while applying for overseas securities investment quotas.

Two. A fund management company may apply for operating some or all of the following foreign exchange businesses:

(1) Management of foreign exchange assets;

(2) Foreign exchange capital investment;

(3) Foreign exchange interbank borrowing;

(4) Credit investigation and consulting services;

(5) Other businesses approved by the State Administration of Foreign Exchange.

Fund management companies engaged in foreign exchange asset management business and foreign exchange capital investment business shall abide by the relevant provisions of China Securities Regulatory Commission (hereinafter referred to as "China Securities Regulatory Commission").

Three, the fund management company to apply for foreign exchange business qualification, shall submit the following documents to the local foreign exchange bureau:

(1) A written application, which includes: the basic information of the company, the internal organizational structure, the resumes and relevant qualification certificates of the senior managers of the company's foreign exchange business, the feasibility analysis of operating the foreign exchange business, and an explanation of the operating situation, etc. ;

(2) The original legal person license of the fund management company issued by China Securities Regulatory Commission;

(3) The internal control management system and risk prevention measures of the company's foreign exchange business;

(4) The company's financial statements of the previous year audited by an accounting firm. A company established less than one year shall submit a capital verification report issued by an accounting firm;

(5) Other materials as stipulated by the foreign exchange bureau.

The local foreign exchange bureau shall, within 20 working days from the date of receiving the complete application materials, put forward the preliminary examination opinions according to the Operating Rules for Market Access Examination of Foreign Exchange Business of Fund Management Companies (see Annex 1) and report them to the State Administration of Foreign Exchange according to the procedures. The State Administration of Foreign Exchange shall make a decision on approval or disapproval within 20 working days from the date of receiving the complete application materials. If it is approved, a foreign exchange license for securities business will be issued.

Four, the fund management company to apply for overseas securities investment quota, should hold the following documents to apply to the local foreign exchange bureau:

(1) Application, including: the basic information of the applicant, the amount of investment to be applied for, the type of fund to be established (open or closed), the share of the fund to be issued, the source of funds and the investment plan, and the sample written agreement to be signed with the investor;

(2) The foreign exchange license for securities business or the application materials specified in Article 3 of this Notice;

(3) Documents or relevant certification materials of China Securities Regulatory Commission agreeing to carry out overseas securities investment business;

(4) The company's financial statements of the previous year audited by an accounting firm;

(5) Other materials as stipulated by the foreign exchange bureau.

The local foreign exchange bureau shall, within 20 working days from the date of receiving the complete application materials, put forward the preliminary examination opinions according to the Operating Rules for Foreign Exchange Business of Overseas Securities Investment of Fund Management Companies (see Annex 2) and report them to the State Administration of Foreign Exchange according to the procedures. The State Administration of Foreign Exchange shall, within 20 working days from the date of receiving the complete application materials, make a decision on approval or disapproval, and indicate the investment amount and fund share when approving.

Five, the fund management company should hold the relevant approval documents of the foreign exchange bureau to open its own foreign exchange fund account in the designated foreign exchange bank, which is used to deposit the company's foreign exchange capital and foreign exchange income. The fund management company shall report to the local foreign exchange bureau within 5 working days after opening an account.

The income range of the fund management company's own foreign exchange fund account is: remitted foreign exchange funds, foreign exchange business income and other foreign exchange income approved by the foreign exchange bureau; Expenditure scope includes: settlement of foreign exchange, current account expenditure and capital account expenditure approved by the foreign exchange bureau.

Six, the fund management company shall hold the approval document of the foreign exchange bureau on the investment quota to open a foreign exchange account for overseas securities investment in the designated foreign exchange bank, which is used to deposit the raised funds and foreign exchange funds such as subscription, redemption and dividends. The fund management company shall report to the local foreign exchange bureau within 5 working days after opening an account.

The income range of the fund management company's foreign exchange account for overseas securities investment includes: funds raised by domestic residents or institutions, funds transferred from domestic custody accounts, funds remitted by domestic residents or institutions to purchase funds, and other foreign exchange income approved by the foreign exchange bureau; Expenditure scope includes: funds transferred to domestic custody accounts, funds paid to investors for dividends and redemption, and other foreign exchange expenditures approved by the foreign exchange bureau.

Seven, after obtaining the investment quota approved by the foreign exchange bureau, the fund management company shall sign a custody agreement with the domestic custodian, open a domestic custody account, and trust all its assets for overseas securities investment. A domestic custodian shall meet the conditions stipulated by the China Banking Regulatory Commission.

The fund management company shall, within 5 working days after opening an account, report the account opening and custody agreement to the local foreign exchange bureau for the record.

The income range of domestic custody accounts includes: funds transferred from foreign exchange accounts of overseas securities investment of fund management companies, funds transferred from overseas settlement accounts and other income approved by the foreign exchange bureau; Expenditure scope includes: funds transferred to overseas settlement accounts, funds transferred to foreign exchange accounts of overseas securities investment of fund management companies, funds paid for dividends and redemptions of investors, funds paid for custody fees, management fees, various handling fees and other expenses approved by the foreign exchange bureau.

Eight, the domestic custodian shall open an overseas settlement account for the fund management company at the overseas custodian agent for the settlement of funds with overseas securities registration and settlement institutions. The domestic custodian shall report the account opening to the State Administration of Foreign Exchange within 5 working days after opening the account.

The income range of overseas settlement accounts includes: funds transferred from domestic custody accounts, funds for selling various overseas financial assets, dividends, interest income and other income approved by the foreign exchange bureau; Expenditure scope includes: funds transferred to domestic custody accounts, funds for purchasing various overseas financial assets, payment of related expenses and other expenditures approved by the foreign exchange bureau.

Nine, the fund management company can remit and remit the difference between the subscription and redemption of open-end funds through the domestic custody account. The accumulated net remittance of a fund management company shall not exceed the investment scale calculated according to the investment share approved by the foreign exchange bureau.

Ten, domestic residents and institutions to subscribe for funds, should be based on the written agreement signed by the bank and the fund management company. Individuals who subscribe for or purchase funds may not directly use foreign currency cash, but only use their foreign exchange deposits deposited in domestic banks. Domestic institutions may not subscribe for or purchase funds with debt foreign exchange funds.

Eleven, domestic residents and institutions from the fund redemption and fund dividends to obtain foreign exchange funds, the bank by the fund management company's payment instructions for the relevant transfer procedures. Foreign exchange funds obtained by individuals from fund redemption and fund dividends are transferred to their foreign exchange deposit accounts by banks. Individuals may not directly withdraw cash from foreign exchange accounts or settle foreign exchange for overseas securities investment. Foreign exchange funds obtained by domestic institutions from fund redemption or fund dividends shall be transferred back to their original foreign exchange accounts by banks.

Twelve, the domestic custodian shall, in accordance with the prescribed format (see table 1, 2, 3), submit the data to the State Administration of Foreign Exchange within 7 working days after the end of each month, and declare the balance of payments according to the relevant provisions.

Thirteen, the foreign exchange bureau where the fund management company is located shall summarize the opening and cancellation of the fund management company's own foreign exchange fund account, overseas securities investment foreign exchange account and domestic custody account on a monthly basis, and submit it to the State Administration of Foreign Exchange.

Fourteen, fund management companies and banks in violation of the provisions of this notice, the foreign exchange bureau shall be punished in accordance with the "Regulations" of People's Republic of China (PRC) on foreign exchange management and related foreign exchange management regulations. For domestic custodians with serious violations, the foreign exchange bureau may instruct the fund management company to replace the domestic custodian. For fund management companies with serious violations, the foreign exchange bureau may cancel their investment quota or revoke their foreign exchange licenses for securities business.

Fifteen, this notice shall be implemented as of the date of promulgation. After receiving the documents, all branches and foreign exchange management departments shall promptly forward this notice to the central branches within their respective jurisdictions, and forward this document and the attached schedule to the fund management companies and designated foreign exchange banks within their respective jurisdictions. If there is any problem in the implementation, it shall report to the State Administration of Foreign Exchange in a timely manner.

Attachment: 1 Operating rules for market access review of foreign exchange business of fund management companies (omitted)

2. Operating rules for foreign exchange business of overseas securities investment of fund management companies (omitted)

Schedule: 1. Monthly Statement of Overseas Securities Investment in qualified domestic institutional investor (1)?

2. Monthly statement of securities investment outside qualified domestic institutional investor (2)?

3. List of inward and outward remittance of funds in qualified domestic institutional investor.