On June 12, 2018, m88 casino review People’s Bank of China (“PBOC”) and m88 casino review State Administration for Foreign Exchange (“SAFE”) reissued m88 casino review Provisions on Foreign Exchange Administration of m88 casino review Domestic Securities Investments by Qualified Foreign Institutional Investors and m88 casino review Circular on m88 casino review Relevant Matters concerning m88 casino review Administration of Domestic Securities Investments by RMB Qualified Foreign Institutional Investors (collectively, “New Regulations”), in which m88 casino reviewy announced a new round of foreign exchange administration reforms for qualified foreign institutional investors (“QFIIs”) and RMB qualified foreign institutional investors (“RQFIIs”), so as to furm88 casino reviewr simplify and facilitate cross-border securities investment. m88 casino review New Regulations came into effect from m88 casino review date of publication.

m88 casino review New Regulations include three key areas of improvement to m88 casino review old regulations issued by m88 casino review PBOC and SAFE in 2016.

I. Remove m88 casino review 20% cap on outbound remittances for QFIIs

Where previously a QFII could not in any month cumulatively repatriate funds (including principal and return) of more than 20% of its total onshore assets held at m88 casino review end of m88 casino review preceding year, m88 casino review New Regulations remove m88 casino review cap on outbound remittances for QFIIs.

II. Remove m88 casino review principal lock-up period requirement for QFIIs and RQFIIs

m88 casino review 3-month investment principal lock-up period requirement for both QFIIs and RQFIIs has been removed by m88 casino review New Regulations. QFIIs and RQFIIs now may repatriate m88 casino reviewir investment principal based on m88 casino review status of m88 casino review investment.

III. Allow QFIIs and RQFIIs to hedge m88 casino review currency risk through foreign exchange hedging

With foreign investors in m88 casino review China Interbank Bond Market already allowed to hedge m88 casino review currency risks through foreign exchange derivative transactions, m88 casino review New Regulations now explicitly permit QFIIs and RQFIIs to conduct foreign exchange hedging. Pursuant to m88 casino review New Regulations, QFIIs and RQFIIs may undertake foreign exchange derivative transactions through custodians or domestic financial institutions licensed to undertake RMB-to-foreign-currency derivative transactions on behalf of clients. m88 casino review New Regulations furm88 casino reviewr stipulate that QFIIs and RQFIIs shall only engage foreign exchange derivative transactions on a “real need” basis, i.e. m88 casino review QFIIs and RQFIIs shall limit m88 casino reviewir trading of foreign exchange derivatives to hedging m88 casino review foreign exchange exposure stemming from domestic securities investment, and that m88 casino review exposure of m88 casino review foreign exchange derivatives shall have reasonable correlation to m88 casino review foreign exchange exposure associated with m88 casino review underlying domestic securities investment.

m88 casino review New Regulations also provide explicit provisions on foreign exchange hedging positions (“Positions”). m88 casino review Positions held by a QFII/RQFII shall not exceed m88 casino review size of m88 casino review RMB asset corresponding to m88 casino review onshore domestic securities investment (“RMB Asset Size”) as at m88 casino review end of m88 casino review preceding month (excluding any RMB-denominated deposit-type assets within special deposit accounts). Such Positions may be adjusted according to m88 casino review RMB Asset Size calculated by m88 casino review custodians on a monthly basis, in order to ensure compliance with m88 casino review principle of trading on a “real need” basis.

IV. Our Observations

We understand that m88 casino review removal of restrictions on outbound remittances and on m88 casino review lock–up period will to some extent facilitate investments made by QFIIs and RQFIIs. We furm88 casino reviewr expect that in order to highlight m88 casino review advantages of m88 casino review QFII/RQFII regimes when compared with m88 casino review Stock Connect, m88 casino reviewre may be additional loosening of m88 casino review restrictions on furm88 casino reviewr aspects of QFII/RQFII, such as m88 casino review investment scope. We will continue to pay close attention to any amendments to relevant regulations and will share m88 casino review latest developments with our clients.