Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors
Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors
Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors
Order of the China Securities Regulatory Commission, the People's Bank of China, and the State Administration of Foreign Exchange No.176
September 25, 2020
Upon the approval of the State Council, the Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors are hereby promulgated for implementation as of November 1, 2020.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Yi Gang, Governor of the People's Bank of China
Pan Gongsheng, Director of the State Administration of Foreign Exchange
Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors
Article 1 These Measures are formulated in accordance with the relevant laws and administrative regulations, in order to standardize the investment activities in domestic securities and futures markets by the qualified foreign institutional investors (QFIIs) and RMB qualified foreign institutional investors (RQFIIs), and promote the stable and healthy development of the securities and futures markets.
Article 2 For the purpose of these Measures, the terms "QFIIs" and "RQFIIs" (hereinafter collectively referred to as the "qualified foreign investors") refer to foreign institutional investors that have been approved by the China Securities Regulatory Commission (the "CSRC") to invest in domestic securities and futures with overseas funds, including overseas fund management companies, commercial banks, insurance companies, securities companies, futures companies, trust companies, government-funded investment institutions, sovereign wealth funds, pension funds, charitable funds, donation funds, international organizations, and other institutions recognized by the CSRC.
Qualified foreign investors are encouraged to make investments in domestic securities and futures with overseas RMB funds.
Article 3 A qualified foreign investor shall appoint a qualified domestic institution as its custodian to manage its assets, and appoint a domestic securities or futures company in accordance with the law to conduct its domestic securities or futures trading activities.
Article 4 Qualified foreign investors shall establish and implement effective internal control and compliance management systems to ensure that their investment operations, fund management and other actions comply with domestic laws and regulations and other relevant provisions.
Article 5 The CSRC and the People’s Bank of China (the "PBC") shall, in accordance with the law, conduct supervision and administration of the domestic securities and futures investment activities undertaken by qualified foreign investors, while the PBC and the State Administration of Foreign Exchange (the "SAFE") shall, in accordance with the law, conduct supervision and administration of the domestic bank accounts of and funds transfer by qualified foreign investors. The trading varieties such as financial derivatives and trading methods that qualified foreign investors may participate in will be released by the CSRC upon approval by the PBC and the SAFE.
Article 6 A qualified foreign investor applicant shall meet the following conditions:
1. the applicant has stable financial position, good credit standing and experience in securities and futures investment;
2. the main responsible person for its domestic investment business meets the relevant requirements on professional qualifications prescribed by the foreign country or region where the applicant is located (if any);
3. the governance structure, internal control and compliance management systems are sound and effective, and the supervisor responsible for supervising the legality and compliance of the applicant's domestic investment behaviors is appointed in accordance with provisions;
4. the applicant’s operation is well-managed and has not been subject to any substantial punishment by any regulator in the past three years or since its establishment; and
5. the applicant does not fall under the circumstances that have a major impact on the operation of the domestic capital market.
Article 7 An applicant shall submit the application documents for qualified foreign investor qualifications to the CSRC through its custodian.
The CSRC shall, within ten working days upon its acceptance of the application documents, determine whether to grant approval or not after having examined the application materials. If it determines to grant the approval, it shall give a written official reply and issue a permit for engaging in securities or futures business (the "permit"); otherwise, it shall give a written notice to the applicant.
Article 8 Where a custodian carries out the asset custody business for qualified foreign investors for the first time, it shall report to the CSRC for record-filing within five working days from the date when the custody agreement is signed.
Article 9 A custodian shall perform the following functions:
1. keeping any and all assets entrusted by qualified foreign investors in safe custody;
2. handling qualified foreign investor-related trading clearing, delivery, settlement, sale, receipt and payment of foreign exchange, and RMB settlement;
3. supervising investment operations of qualified foreign investors, and if any investment instruction of the qualified foreign investors is found to have violated laws or regulations, immediately reporting the same to the CSRC, the PBC and the SAFE;
4. submitting the relevant business reports and statements, including the opening and cancellation of accounts of qualified foreign investors, cross-border receipt and payment of funds, and asset allocation in domestic securities and futures investment, in accordance with the requirements of the CSRC, the PBC and the SAFE, and undertaking statistics and declarations of international revenue and expenditure;
5. keeping the relevant materials of qualified foreign investors such as the records on the remittance of funds from and to the foreign countries and regions, the conversion, receipt and payment of foreign exchange and the capital flow for no less than 20 years; and
6. performing other functions as defined by the CSRC, the PBC and the SAFE according to the principle of prudential regulation.
Article 10 A custodian shall continuously meet the following requirements:
1. having a dedicated asset custody department and personnel, systems and institutions that meet the needs of custody business;
2. having the qualification to operate foreign exchange business and RMB business;
3. having no major violations of laws or regulations that affect the custody business; and
4. meeting other requirements as defined by the CSRC, the PBC and the SAFE according to the principle of prudential regulation.
Article 11 A custodian shall strictly separate its own assets from those under its custody, and shall manage those assets under its custody in separate accounts.
Article 12 Where a qualified foreign investor entrusts two or more custodians, it shall designate the main custodian to be responsible for dealing with, among other matters, application for qualifications, major event reporting and registration of the subject information on its behalf. A qualified foreign investor shall, within five working days upon designation of the main custodian, report the information on all custodians to the CSRC and the SAFE for record-filing through the main custodian.
Qualified foreign investors may change their custodians. The CSRC and the SAFE may require qualified foreign investors to change their custodians according to the principle of prudential regulation.
Article 13 A qualified foreign investor shall apply for the opening of a securities or futures account in accordance with the law.
To conduct securities and futures transactions, a qualified foreign investor shall entrust an institution that has the corresponding qualification for clearing.
Article 14 The investment principal of a qualified foreign investor and its investment income within the territory of China may be invested in financial instruments that meet the provisions.
A qualified foreign investor shall invest in the interbank bond market or participate in business in the domestic foreign exchange market in accordance with the relevant provisions of the PBC and the SAFE.
Article 15 Securities investment within the territory of China made by qualified foreign investors shall be subject to the restrictions on the proportion of securities investment prescribed by the CSRC and other relevant provisions of the State.
Article 16 When fulfilling the duty of information disclosure, a qualified foreign investor shall, in accordance with the law, compute the interests in the domestically listed or quoted shares and the overseas listed foreign shares of the same company which it owns on a consolidated basis, and shall abide by the relevant rules for information disclosure.
A qualified foreign investor shall disclose the relevant securities investment information of the parties acting in concert on a consolidated basis in accordance with the information disclosure rules.
Article 17 Institutions such as the securities companies and futures companies shall keep such materials as qualified foreign investors’ authorization records and trading records for no less than 20 years.
Article 18 Domestic securities and futures investment activities of qualified foreign investors shall comply with the relevant provisions of the securities and futures exchanges, the securities registration and clearing agencies and securities and futures market monitoring institutions.
Article 19 A qualified foreign investor shall open a foreign exchange account and/or a special RMB deposit account with the custodian, and the scope of the account shall comply with the relevant provisions of the PBC and the SAFE.
Article 20 A qualified foreign investor shall remit the investment principal into China in accordance with the provisions of the PBC and the SAFE, and the principal remitted in the form of foreign exchange shall be in the currency that can be listed and traded in China's foreign exchange market.
A qualified foreign investor may remit funds out of China in accordance with the relevant provisions of the PBC and the SAFE.
Article 21 The CSRC, the PBC and the SAFE may, in accordance with the law, require qualified foreign investors, custodians, securities companies, futures companies, and other institutions to provide the relevant materials relating to the qualified foreign investors, and may conduct inquiries and inspections, if necessary.
Article 22 Where a qualified foreign investor falls under any of the following circumstances, it shall report the same to the CSRC, the PBC and the SAFE for the record-filing within five working days from the occurrence of relevant situation:
1.
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Order of the China Securities Regulatory Commission, the People's Bank of China, and the State Administration of Foreign Exchange No.176
September 25, 2020
Upon the approval of the State Council, the Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors are hereby promulgated for implementation as of November 1, 2020.
Yi Huiman, Chairman of the China Securities Regulatory Commission
Yi Gang, Governor of the People's Bank of China
Pan Gongsheng, Director of the State Administration of Foreign Exchange
Administrative Measures for Domestic Securities and Futures Investment Made by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors
Article 1 These Measures are formulated in accordance with the relevant laws and administrative regulations, in order to standardize the investment activities in domestic securities and futures markets by the qualified foreign institutional investors (QFIIs) and RMB qualified foreign institutional investors (RQFIIs), and promote the stable and healthy development of the securities and futures markets.
Article 2 For the purpose of these Measures, the terms "QFIIs" and "RQFIIs" (hereinafter collectively referred to as the "qualified foreign investors") refer to foreign institutional investors that have been approved by the China Securities Regulatory Commission (the "CSRC") to invest in domestic securities and futures with overseas funds, including overseas fund management companies, commercial banks, insurance companies, securities companies, futures companies, trust companies, government-funded investment institutions, sovereign wealth funds, pension funds, charitable funds, donation funds, international organizations, and other institutions recognized by the CSRC.
Qualified foreign investors are encouraged to make investments in domestic securities and futures with overseas RMB funds.
Article 3 A qualified foreign investor shall appoint a qualified domestic institution as its custodian to manage its assets, and appoint a domestic securities or futures company in accordance with the law to conduct its domestic securities or futures trading activities.
Article 4 Qualified foreign investors shall establish and implement effective internal control and compliance management systems to ensure that their investment operations, fund management and other actions comply with domestic laws and regulations and other relevant provisions.
Article 5 The CSRC and the People’s Bank of China (the "PBC") shall, in accordance with the law, conduct supervision and administration of the domestic securities and futures investment activities undertaken by qualified foreign investors, while the PBC and the State Administration of Foreign Exchange (the "SAFE") shall, in accordance with the law, conduct supervision and administration of the domestic bank accounts of and funds transfer by qualified foreign investors. The trading varieties such as financial derivatives and trading methods that qualified foreign investors may participate in will be released by the CSRC upon approval by the PBC and the SAFE.
Article 6 A qualified foreign investor applicant shall meet the following conditions:
1. the applicant has stable financial position, good credit standing and experience in securities and futures investment;
2. the main responsible person for its domestic investment business meets the relevant requirements on professional qualifications prescribed by the foreign country or region where the applicant is located (if any);
3. the governance structure, internal control and compliance management systems are sound and effective, and the supervisor responsible for supervising the legality and compliance of the applicant's domestic investment behaviors is appointed in accordance with provisions;
4. the applicant’s operation is well-managed and has not been subject to any substantial punishment by any regulator in the past three years or since its establishment; and
5. the applicant does not fall under the circumstances that have a major impact on the operation of the domestic capital market.
Article 7 An applicant shall submit the application documents for qualified foreign investor qualifications to the CSRC through its custodian.
The CSRC shall, within ten working days upon its acceptance of the application documents, determine whether to grant approval or not after having examined the application materials. If it determines to grant the approval, it shall give a written official reply and issue a permit for engaging in securities or futures business (the "permit"); otherwise, it shall give a written notice to the applicant.
Article 8 Where a custodian carries out the asset custody business for qualified foreign investors for the first time, it shall report to the CSRC for record-filing within five working days from the date when the custody agreement is signed.
Article 9 A custodian shall perform the following functions:
1. keeping any and all assets entrusted by qualified foreign investors in safe custody;
2. handling qualified foreign investor-related trading clearing, delivery, settlement, sale, receipt and payment of foreign exchange, and RMB settlement;
3. supervising investment operations of qualified foreign investors, and if any investment instruction of the qualified foreign investors is found to have violated laws or regulations, immediately reporting the same to the CSRC, the PBC and the SAFE;
4. submitting the relevant business reports and statements, including the opening and cancellation of accounts of qualified foreign investors, cross-border receipt and payment of funds, and asset allocation in domestic securities and futures investment, in accordance with the requirements of the CSRC, the PBC and the SAFE, and undertaking statistics and declarations of international revenue and expenditure;
5. keeping the relevant materials of qualified foreign investors such as the records on the remittance of funds from and to the foreign countries and regions, the conversion, receipt and payment of foreign exchange and the capital flow for no less than 20 years; and
6. performing other functions as defined by the CSRC, the PBC and the SAFE according to the principle of prudential regulation.
Article 10 A custodian shall continuously meet the following requirements:
1. having a dedicated asset custody department and personnel, systems and institutions that meet the needs of custody business;
2. having the qualification to operate foreign exchange business and RMB business;
3. having no major violations of laws or regulations that affect the custody business; and
4. meeting other requirements as defined by the CSRC, the PBC and the SAFE according to the principle of prudential regulation.
Article 11 A custodian shall strictly separate its own assets from those under its custody, and shall manage those assets under its custody in separate accounts.
Article 12 Where a qualified foreign investor entrusts two or more custodians, it shall designate the main custodian to be responsible for dealing with, among other matters, application for qualifications, major event reporting and registration of the subject information on its behalf. A qualified foreign investor shall, within five working days upon designation of the main custodian, report the information on all custodians to the CSRC and the SAFE for record-filing through the main custodian.
Qualified foreign investors may change their custodians. The CSRC and the SAFE may require qualified foreign investors to change their custodians according to the principle of prudential regulation.
Article 13 A qualified foreign investor shall apply for the opening of a securities or futures account in accordance with the law.
To conduct securities and futures transactions, a qualified foreign investor shall entrust an institution that has the corresponding qualification for clearing.
Article 14 The investment principal of a qualified foreign investor and its investment income within the territory of China may be invested in financial instruments that meet the provisions.
A qualified foreign investor shall invest in the interbank bond market or participate in business in the domestic foreign exchange market in accordance with the relevant provisions of the PBC and the SAFE.
Article 15 Securities investment within the territory of China made by qualified foreign investors shall be subject to the restrictions on the proportion of securities investment prescribed by the CSRC and other relevant provisions of the State.
Article 16 When fulfilling the duty of information disclosure, a qualified foreign investor shall, in accordance with the law, compute the interests in the domestically listed or quoted shares and the overseas listed foreign shares of the same company which it owns on a consolidated basis, and shall abide by the relevant rules for information disclosure.
A qualified foreign investor shall disclose the relevant securities investment information of the parties acting in concert on a consolidated basis in accordance with the information disclosure rules.
Article 17 Institutions such as the securities companies and futures companies shall keep such materials as qualified foreign investors’ authorization records and trading records for no less than 20 years.
Article 18 Domestic securities and futures investment activities of qualified foreign investors shall comply with the relevant provisions of the securities and futures exchanges, the securities registration and clearing agencies and securities and futures market monitoring institutions.
Article 19 A qualified foreign investor shall open a foreign exchange account and/or a special RMB deposit account with the custodian, and the scope of the account shall comply with the relevant provisions of the PBC and the SAFE.
Article 20 A qualified foreign investor shall remit the investment principal into China in accordance with the provisions of the PBC and the SAFE, and the principal remitted in the form of foreign exchange shall be in the currency that can be listed and traded in China's foreign exchange market.
A qualified foreign investor may remit funds out of China in accordance with the relevant provisions of the PBC and the SAFE.
Article 21 The CSRC, the PBC and the SAFE may, in accordance with the law, require qualified foreign investors, custodians, securities companies, futures companies, and other institutions to provide the relevant materials relating to the qualified foreign investors, and may conduct inquiries and inspections, if necessary.
Article 22 Where a qualified foreign investor falls under any of the following circumstances, it shall report the same to the CSRC, the PBC and the SAFE for the record-filing within five working days from the occurrence of relevant situation:
1.
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