Lately, to promote the opening up of inter-bank bond market and normalize the foreign exchange management for foreign institutional investors investing in the inter-bank bond market, the State Administration of Foreign Exchange has issued the Circular of the State Administration of Foreign Exchange on Foreign Exchange Management Issues on Foreign Institutional Investors Investing in the Inter-bank Bond Market (the "Circular") which shall come into force on the date of promulgation.
Main ideas of the Circular include the following. Firstly, it is to implement registration management for foreign institutional investors. Foreign institutional investors shall apply for exchange registration via settlement agents. The second point is not setting limits or aggregate limits for a single institution. Foreign institutional investors may directly go through formalities for the repatriation and remitting of funds, and settlement of exchange or purchase of exchange in banks by virtue of related registration information, without the examination and approval by the State Administration of Foreign Exchange. Third, the currency of the repatriation and remitting of funds is required to be almost the same. The proportion of domestic currency and foreign currency in investors' repatriation funds shall stay the same as that in investors' remitting funds, with less than 10% fluctuation.