Steadily Advance Capital Account Management Reform...

Title:The capital account management department will continue to promote cross-border investment and financing facilitation

In recent years，in face of the complex and ever-changing international and domestic economic and financial situation，our capital account foreign exchange management department，guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era，has been implementing the decisions and arrangements of the Party Central Committee and the State Council and further promoting the reform and opening up of capital account management. On one hand，cross-border investment and financing facilitation has been vigorously promoted，a series of facilitation policies and measures were introduced，administrative approvals were streamlined，government services were improved and the business processing of market entities was facilitated. On the other hand，capital account reform was further deepened with its openness raised to a higher level. Direct investment has achieved a relatively high level of opening up，cross-border securities investment channels continued to expand，and cross-border financing restrictions were significantly relaxed.

After years of practical exploration，the Guidelines on Foreign Exchange Business under Capital Account (hereinafter referred to as the Guidelines) have become a crucial reference for foreign exchange management departments at all levels and market entities such as banks，enterprises in practicing capital account businesses. Also，it has played an active role in implementing capital account foreign exchange management policies，regulating and facilitating the handling of capital account foreign exchange business，and promoting the constructive interaction between foreign exchange administration departments and all sectors of society. In order to further promote capital account management reform，certain revisions were made to the Guidelines in 2020，and the concepts of serving real economy and facilitating market entities were thereby included.

Considerations

The major considerations for the revision of the Guidelines are as follows.

First，meeting the need of regular revision and policy updates. Generally，the Guidelines will be revised every two to three years. Since the release of the 2017 version，there have been certain updates and many adjustments on capital account foreign exchange management policies，such as policies on the centralized operation of cross-border funds of multinational companies and qualified foreign institutional investors.

Second，meeting the need of further improving management and facilitating services. With continued reform of government functions (streamline administration and delegate power，improve regulation，and upgrade services) in recent years，cross-border investment and financing facilitation has been greatly improvedand relevant concepts also need to be further reflected in the Guidelines，such as further streamlining and optimizing the audit materials and handling procedures. Meanwhile，in order to facilitate market entities’ compliance operations，it is necessary to sort out and summarize our management and operation experiences gained during routine practices，and systematically illustrate them in the Guidelines .

Third，meeting the need of further improving the Guidelines. Although the Guidelines already had a relatively stable style，there are issues including complex structures，redundant chapters and tedious contents. Onone hand，the revision strives to present a clearer structure - certain adjustments were made to several chapters. On the other hand，it seeks for a more concise manner - in order to providefavorable conditions for market entities on application materials and processing procedures.

Major Updates

The revision of the Guidelines implements the concepts of serving real economy and facilitating market entities. It basically follows previous styles and issued in three versions: SAFE version，SAFE branch version and bank version. After the streamlining and optimization，the length of this revised version has been largely reduced compared to the 2017 version: the 2017 version has 116 business guidelines with a total of 165,000 characters，while the 2020 version has 74 business guidelines with a total of 129,000 characters - 42 business guidelines were deleted with a decrease of over 36%，and 36,000 characters were reduced，which is a decrease of 22%. In terms of the content，major adjustments are as follows.

Clarifying structure through merging and integration. First，integrating different procedures in the same business. The guidelines for the registration，modification，and cancellation of foreign debt，domestic guarantees for foreign loans，overseas lending，and overseas listing are integrated into one. Second，merging similar businesses. The guidelines for similar businesses，such as the purchase and payment of foreign exchange for the transfer of immigrant property and the transfer of inherited property are merged. The third is to conduct consolidated management over accounts. Integrate the opening，using (entry) and closing of various capital account foreign exchange accounts. Lastly，add comprehensive services. Unify and integrate the capital items that were originally dispersed under direct investment，foreign debt，and securities，including foreign exchange settlement to be paid accounts，fund settlement，and payment facilitation business.

Updating and adjusting based on the policy. Revision is made based on the policy changes since the release of the 2017 version. Newly added contents include guidelines for the centralized operation of cross-border funds of multinational companies，cross-border securities transactions of depository receipts and facilitation of capital account income and payment，as well as business guidelines for banks to handle cancellation of registration of foreign debt，overseas lending and foreign loans on domestic guarantees. A total number of 13 guidelines had been deleted，including the guidelines on QFII/RQFII investment quota filing/approval，short-term foreign debt balance indicator verification，and non-bank financial institution entity information registration. Business guidelines for direct investment (FDI & ODI)，foreign debt (involving the improvement of macro-prudential adjustment parameters for full-scale cross-border financing)，registration of foreign loans under bank guarantees and various account management are updated.

Improving management and optimizing services. First，under direct investments - relax the restriction on bank location when handling foreign direct investment registration. Relax restrictions on the use of overseas loan repatriation，and standardize the management of overseas loan repatriation. Moreover，under cross-border financing - cancel the consistency requirement on foreign debt contract currency，withdrawal currency and repayment currency，only requiring the consistency of the latter two. Relax the time limit for the registration of non-fund transfer foreign debt withdrawal/debt repayment and overseas bond issuance. Last，under securities investment - relax the restrictions on the capital (or working capital) foreign exchange settlement in local and foreign currencies of non-bank financial institutions (excluding insurance institutions). Simplify foreign exchange management requirements for domestic individuals participating in equity incentive plans of overseas listed companies.

Streamline materials and optimize processes. Material requirements are drastically reduced. Only necessary proof materials are required for auditing. Duplicated submission is not required for materials that have been recorded or saved in the capital account information system. Paper voucher is no longer needed for materials that can be checked via electronic tax vouchers. Secondly legal basis is simplifiedwith the deletion of less closely related regulations，the legal system becomes much clearer. Thirdly，阅读全部文章，请登录数字版阅读账户。 没有账户？ 立即购买数字版杂志