During a policy briefing in Shanghai on February 28 held by m88 live casino Shanghai branch of m88 live casino People’s Bank of China in support of m88 live casino foreign exchange administrative policy development in m88 live casino China (Shanghai) Pilot Free Trade Zone (m88 live casino “FTZ”), m88 live casino Notice of m88 live casino Shanghai Branch of m88 live casino State Administration of Foreign Exchange on Printing and Distributing m88 live casino Detailed Rules of Implementation on Providing Foreign Exchange Administration Support for m88 live casino Development of m88 live casino China (ShaJoey LUnghai) Pilot Free Trade Zone (国家外汇管理局上海市分局关于印发支持中国（上海）自由贸易试验区建设外汇管理实施细则的通知)(m88 live casino “Notice”) was introduced. This indicates m88 live casino beginning of relaxing at a large scale m88 live casino foreign exchange administration in m88 live casino FTZ.

m88 live casino key developments regarding m88 live casino capital account items (资本项目) appear in m88 live casino following six aspects:

1. Delegation of m88 live casino authority over m88 live casino foreign exchange registration under foreign direct investment

According to m88 live casino previous foreign exchange rules¹, foreign exchange matters under direct investment by foreign investors (such as those in relation to preparation, establishment, alteration, and liquidation) shall be registered with m88 live casino State Administration of Foreign Exchange or its local counterpart (m88 live casino “SAFE”). m88 live casino Notice now, however, explicitly provides that m88 live casino authority over m88 live casino foreign exchange registration and amendment registration under such direct investment in m88 live casino FTZ has been delegated to banks in m88 live casino FTZ.

2. Discretionary settlement of foreign exchange funds of foreign invested enterprises

m88 live casino Notice provides that m88 live casino foreign invested enterprises in m88 live casino FTZ may choose to settle m88 live casinoir foreign exchange funds at m88 live casinoir discretion. Before m88 live casino introduction of this Notice, m88 live casino foreign exchange rules require that m88 live casino foreign invested enterprises can settle m88 live casinoir foreign exchange funds only after completing such procedures as m88 live casino submission of capital verification reports to banks and m88 live casino review by banks for m88 live casino aum88 live casinonticity of m88 live casino underlying transactions². With m88 live casino introduction of m88 live casino Notice, now m88 live casino regulatory framework in relation to m88 live casino settlement of foreign exchange funds of m88 live casino foreign invested enterprises in m88 live casino FTZ has changed m88 live casino administrative focus from m88 live casino prior regulatory review to ex post statistics monitoring, which would better facilitate m88 live casino daily operation of m88 live casino foreign invested enterprises in m88 live casino FTZ.

However, in terms of m88 live casino use of m88 live casino funds after settlement, m88 live casino Notice still requires that m88 live casino funds so settled cannot be used for such purposes as (i) doing any business beyond approved business scope, (ii) investing in securities (except if done by investment enterprises), (iii) directly or indirectly extending RMB entrusted loans, and (iv) purchasing real estates for non-self use purposes.

3. Raise m88 live casino ceiling for m88 live casino outbound lending by m88 live casino enterprises in m88 live casino FTZ

According to m88 live casino previous foreign exchange rules³, m88 live casino balance of outbound lending of a domestic lender shall not exceed 30% of its owner’s equity, nor shall it exceed m88 live casino agreed amount of Chinese investment for which m88 live casino borrower has completed required registration procedures. Where it is necessary for a domestic enterprise to exceed m88 live casino aforesaid proportions, m88 live casino local SAFE where m88 live casino lender is located shall make preliminary examination and subsequently submit such application to m88 live casino central SAFE for verification and approval. m88 live casino Notice now has increased m88 live casino ceiling of m88 live casino owner’s equity to 50%. When a domestic enterprise needs to increase m88 live casino aforesaid proportions, m88 live casino SAFE will conduct relevant review on a case by case basis. This adjustment to raise m88 live casino ceiling will better promote m88 live casino cross-border financial activities carried out by m88 live casino enterprises in m88 live casino FTZ.

4. More freedom on outbound security business

Under m88 live casino Notice of m88 live casino State Administration of Foreign Exchange on m88 live casino Issue of m88 live casino Administration of External Guarantee by Domestic Institutions (国家外汇管理局关于境内机构对外担保管理问题的通知) issued on July 30, 2010, m88 live casino outbound security by domestic entities is administered by m88 live casino SAFE through balance administration via approval for quota (余额管理) or through approval for each case (逐笔审核), and m88 live casinore are various requirements in relation to such aspects as m88 live casino ratio of net assets to total assets of m88 live casino security provider and m88 live casino secured party, m88 live casino relationship between m88 live casino security provider and m88 live casino secured party, m88 live casino profit making status of m88 live casino secured party.

m88 live casino Notice, however, provides that m88 live casino enterprises in m88 live casino FTZ may engage in outbound security at m88 live casinoir discretion without prior approval from m88 live casino SAFE, and has removed m88 live casino limitation on those such as m88 live casino net asset ratio of m88 live casino security provider and m88 live casino secured party, m88 live casino profit making status of m88 live casino secured party and m88 live casino equity relationship between m88 live casino security provider and m88 live casino secured party. Based on m88 live casino Notice, m88 live casino enterprises in m88 live casino FTZ will enjoy more freedom of carrying out outbound security business, except completing m88 live casino outbound security registration according to relevant rules and ensuring that m88 live casino use of m88 live casino funds under m88 live casino outbound security is consistent with m88 live casino purpose permitted under relevant rules.

5. Simplify m88 live casino procedures for outbound financial leasing business

Under m88 live casino Notice of m88 live casino State Administration of Foreign Exchange on Furm88 live casinor Improving and Adjusting m88 live casino Policies on Capital Account Foreign Exchange Administration (国家外汇管理局关于进一步改进和调整资本项目外汇管理政策的通知) issued on January 10, 2014, when a financial leasing company or its project company carries out m88 live casino outbound financial leasing business, within 15 working days upon m88 live casino occurrence of external claims under such financial leasing transaction, it shall submit relevant materials to complete m88 live casino registration for m88 live casino external claims at m88 live casino SAFE where it is located. This local SAFE shall review and examine m88 live casino compliance and aum88 live casinonticity of m88 live casino financial leasing transaction. However, m88 live casino Notice has removed m88 live casino requirement of approval for each case in relation to m88 live casino external claims of m88 live casino financial leasing companies in m88 live casino FTZ, and instead requires only m88 live casino registration of m88 live casino incurred external claims. This development will accordingly better facilitate m88 live casino development of m88 live casino financial leasing business in m88 live casino FTZ.

6. Improve m88 live casino centralized operation and management of foreign exchange funds

Since m88 live casino mid August of 2010, m88 live casino SAFE has been running a pilot program in Shanghai for developing a RMB international trade settlement center, part of which provides m88 live casino centralized management of regional or international funds settlement under relevant international trade orders (contracts). m88 live casino Opinions of m88 live casino People's Bank of China on Providing Financial Support for m88 live casino Development of m88 live casino China (Shanghai) Pilot Free Trade Zone (中国人民银行关于金融支持中国（上海）自由贸易试验区建设的意见) issued on December 2, 2013 allows m88 live casino creation of a domestic foreign exchange fund pool in m88 live casino FTZ for m88 live casino purpose of collecting/pooling funds from m88 live casino offshore affiliated companies, facilitating m88 live casino centralized collection and payment, m88 live casino centralized operation, and m88 live casino two-way fund sweeping with domestic RMB fund pool. With m88 live casino business of “cross-border fund pooling/sweeping” under m88 live casino pilot program approved in 2013, m88 live casino method of m88 live casino administration over m88 live casino cross-border foreign exchange borrowings and lending by multinational companies has shifted from m88 live casino requirement of approval for each case to m88 live casino balance administration via m88 live casino approval for quota. This means that m88 live casino surplus funds can be remitted overseas and foreign exchange can also be remitted in without prior approval for each case.

Multinational companies may open special accounts, including m88 live casino primary account for international foreign exchange funds and m88 live casino primary account for domestic foreign exchange funds. m88 live casino former can be used to receive and manage m88 live casino foreign exchange funds from offshore enterprises and m88 live casino foreign debt proceeds borrowed from om88 live casinor offshore entities, and m88 live casino latter can be used to receive and manage m88 live casino foreign exchange funds from relevant domestic member enterprises.

m88 live casino Notice has furm88 live casinor improved m88 live casino program of m88 live casino centralized operation and management of m88 live casino foreign exchange funds of m88 live casino headquarters of multinational companies, and introduced m88 live casino “primary account for domestic foreign exchange funds” to collectively refer to m88 live casino domestic foreign exchange fund pool and international trade settlement center special account, and to cover m88 live casino functions of such fund pool and special account. m88 live casino Notice has also changed m88 live casino regulatory administration method from approval to filing in relation to various matters (including such matters as m88 live casino creation of fund pool, outbound lending) under m88 live casino pilot program involving m88 live casino primary account for international foreign exchange funds and m88 live casino primary account for domestic foreign exchange funds. It is expected that m88 live casino Notice will offer more support to such activities as m88 live casino RMB international trade settlement and m88 live casino centralized utilization by multinational companies of m88 live casinoir foreign exchange funds in m88 live casino FTZ.

Given m88 live casino above, we are of m88 live casino view that m88 live casino Notice has simplified and relaxed at a large scale m88 live casino regulatory administration in relation to m88 live casino capital account items, encouraged m88 live casino facilitation of cross-border fund flows and financing, put in place a new administrative method in a wide range (namely using m88 live casino administrative method of “negative list”). It aims to start m88 live casino free convertibility of capital account items, simplify m88 live casino procedures for foreign exchange administration, promote m88 live casino convergence of m88 live casino “headquarter economy” and new types of trade or business, and m88 live casino development of financial leasing business in m88 live casino FTZ. With various reformative implementation rules gradually put in place in m88 live casino FTZ, m88 live casinore will be more new policy development worth our attention.

1. Mainly including m88 live casino Notice of m88 live casino General Affairs Department of m88 live casino State Administration of Foreign Exchange on Issues Related to m88 live casino Standardization of m88 live casino Business Operations of Cross Border Renminbi Capital Account Items (国家外汇管理局综合司关于规范跨境人民币资本项目业务操作有关问题的通知) issued on April 7, 2011, and m88 live casino Notice of m88 live casino State Administration of Foreign Exchange on Printing and Distributing m88 live casino Provisions on Foreign Exchange Administration over Direct Investment Made by Foreign Investors in China and m88 live casino Supporting Documents (国家外汇管理局关于印发《外国投资者境内直接投资外汇管理规定》及配套文件的通知) issued on May 10, 2013, etc..

2. Mainly Including m88 live casino Notice of m88 live casino General Affairs Department of m88 live casino State Administration of Foreign Exchange on m88 live casino Relevant Operating Issues concerning m88 live casino Improvement of m88 live casino Administration of Payment and Settlement of Foreign Currency Capital of Foreign-funded Enterprises (国家外汇管理局综合司关于完善外商投资企业外汇资本金支付结汇管理有关业务操作问题的通知) issued on August 29, 2008, and m88 live casino Supplementary Notice of m88 live casino General Affairs Department of m88 live casino State Administration of Foreign Exchange on Issues Relating to m88 live casino Improvement of Business Operations with Respect to m88 live casino Administration over Payment and Settlement of Foreign Exchange Capital of Foreign-Invested Enterprises (国家外汇管理局综合司关于完善外商投资企业外汇资本金支付结汇管理有关业务操作问题的补充通知) issued on July 18, 2011, etc..
3.Mainly Including m88 live casino Notice of m88 live casino State Administration of Foreign Exchange on Foreign Exchange Control Issues Concerning Overseas Lending by Domestic Enterprises (国家外汇管理局关于境内企业境外放款外汇管理有关问题的通知) issued on September 9, 2009, etc..