SAFE Regulates Domestic Forex Accounts of Foreign Institutions

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Jul. 15 – The State Administration of Foreign Exchange released a new circular concerning the opening and usage of domestic forex accounts by foreign institutions on Monday.

The descriptively named “Circular on the Issues Regarding the Management of Domestic Forex Accounts of Foreign Institutions” permits qualified domestic Chinese and foreign banks to open forex accounts and provide financial services to foreign institutions upon a legal review of account to be opened. Forex accounts of foreign investors can only be opened with the approval of SAFE. The circular will come into effect on August 1, 2009.

The circular also specifies how forex accounts of foreign institutions will be labeled, the rules for statistics and how international receipts and payments should be declared.

Further Reading:
China to use Forex Funds to Boost Domestic Market
China’s New Forex Regulations
SAFE Issues New Regulations to Further Control Foreign Exchange Movement
Keeping China’s Forex Safe: The State Administration of Foreign Exchange

This article is also available in German.