Friday, October 30, 2015

FTA financial reform issued 40 in Shanghai took the lead in realization of RMB

FTA financial reform issued 40 in Shanghai took the lead in realization of RMB capital item's Exchange

Photo: Getty Images

Bank's website announced on October 30, people's Bank of China, Ministry of Commerce, China Banking Regulatory Commission, the SFC, the China insurance regulatory Commission, the foreign exchange Bureau, Shanghai Municipal People's Government recently has issued the further advance China (Shanghai) open innovation pilot project to speed up free trade zone finance programme of building Shanghai into an international financial centre.

Programme a total of 40 articles, and Shanghai in June compared to the version submitted to the State Council for approval, streamline 10 CLO Shanghai "Shanghai kechuang Center to further strengthen financial services to technology" formulation. The remaining five are basically remain the same.

Research Institute of Shanghai University of finance and free trade zone interface news-General Chen Bo said Shanghai kechuang Center itself has a complete set of support systems, including financial support, FTA and Shanghai financial reform focuses on capital account and financial markets and, therefore, does not stand alone on a construction project is elaborated.

According to the programme content, is the free trade zone to further promote capital account convertibility of the pioneering, and gradually increase the degree of Exchange. Programme, the first to realize renminbi capital account convertibility, research pilot start overseas investment by qualified domestic individual investors, innovate foreign exchange management system, exploring convertible in the free trade zone within the limits of pilot.

The second is to further expand the cross-border use of the Yuan, making it become the world's leading payment, liquidation, reserve and pricing currency. Programme, supports businesses in the free trade zone of the overseas parent companies or subsidiaries to issue renminbi bonds in the territory.

Third, before exploring the access to financial services the national treatment and the negative list, actively promoting the opening of external and internal financial services. Programme to support private capital into the financial sector, support private capital to meet the conditions established by law private banking, financial leasing companies, finance companies, auto finance companies and consumer finance companies and other financial institutions. Under the current legal framework, support the establishment of a foreign health insurance institutions.

Four is to promote internationally oriented financial platform, further enhance the market allocation of resources within and outside of the function. Programme, support accelerated international energy trading center of Shanghai Futures Exchange, listed crude oil futures as soon as possible. Promoting natural gas, refined oil, marine fuel oil and other futures products research.

Five is to adapt to the free trade zone and the Shanghai international financial center building requirements, establish joint monitoring mechanism, strengthen the risk and create a favorable financial environment for development. Programme, support banks and exchange bureaus to strengthen the free trade zone of financial regulatory services, capacity-building, explore the integrated supervision systems in foreign currency to strengthen free trade zone coordination of financial supervision, exploring the functional supervision. In addition, the Shanghai Municipal People's Government will, in conjunction with relevant departments to further improve the financial and credit system construction and other programs.

Full text of the report:

Further advancing the China (Shanghai) open innovation pilot project to speed up free trade zone finance programme of building Shanghai into an international financial centre

To thoroughly implement the Party Central Committee and the State Council decisions and arrangements to advance (Shanghai) free trade zone (hereinafter referred to as the free trade zone) financial openness and innovation pilot, speeding up building Shanghai into an international financial centre, developing the programme.

A, General requirements

Implement implementation Central, and State on financial reform and since trade yan construction of General deployment, tightly around service national, and oriented world of strategy requirements and Shanghai international financial center construction of strategy task, insisted to service entity economic, and promote trade and investment convenience into starting point, according to active sound, and grasp rhythm, and macro carefully, and risk can control principles, speed up advance capital project can exchange, and Yuan across border using, and financial services open and construction oriented international of financial markets, constantly perfect financial regulatory, Efforts to promote free trade zone opening financial innovation pilot and the linkage of building Shanghai into an international financial centre, to explore new ways and accumulate new experience, and timely review and replicated at the right time, to better serve the country's deepening financial reforms and the expansion of financial services.

Second, the first to realize renminbi capital account convertibility

According to overall planning and service entities, principles of risk control, step by step to advance, in free trade zone in the pioneering of RMB convertibility under capital account, gradually increase the degree of convertibility under the capital.

(A) to conscientiously sum up experience in free trade accounts. Hold on to activate free trading account currency and integration operations, further expand free trade account feature. Free trade accounts and foreign currency capital convertibility principle as macro-prudential management.

(B) support the economic agents can move freely through accounts in foreign trade and investment activities, encourage and support the banking, securities, insurance financial institutions to use free trade accounts and other financial innovations, allows the Securities and futures exchanges and the clearing institutions around the free trade system, making full use of free electronic information flow and capital flow between trading accounts, research innovation initiatives.

(C) exploring the pilot start overseas investment by qualified domestic individual investors, timely publish relevant implementing rules, allows eligible individuals overseas industrial investment, real estate investment and financial investment.

(D) formulate methodologies to allow or expand the eligible institutions and individuals in the Securities and futures markets in and outside investment, clear as soon as possible in the territory's securities and futures market cross-border flows of investment management, research support capital markets through free trade accounts, initiate a pilot.

(E) establish under the macro-prudential regulatory framework in the area of financing and capital flow management system, considering the currency, duration matching of assets and liabilities and the need for external debt management and monetary policy, reasonable regulation of foreign financing and investment, optimize the structure of overseas financing, prevention of financing risk.

(F) innovative foreign exchange management system, exploring convertible in the free trade zone within the limits of pilot. Around the construction of free trade zone and the Shanghai world financial center goal, further innovate Foreign Exchange Management System. Relaxing the restrictions on the movement of capital across borders, improve foreign exchange management system of capital balance. Studying ways to further expand the exchange of personal limits. According to the main regulatory principles, non-financial companies in the free trade zone within the limits convertibility. Gradually expanding foreign currency exchange limits, the first convertible.

Third, the further expansion of renminbi cross-border use

Expand the scope of RMB overseas, promoting both trade, industrial investment and financial investment, promote capital and currency "go out".

(G) improve relevant rules, supports businesses in the free trade zone of the overseas parent companies or subsidiaries in the territory of the issuance of RMB bonds, needed to raise funds in domestic and overseas use.

(H) establish eligibility system based on qualified investors, according to the market needs to start free trade zone to which individual cross-border RMB financial support in an overseas operation. Audit Commission August tracking review results

(I) expanding offshore investment return channels. Innovation-oriented international RMB financial products, expanding the scope of overseas investment of RMB financial products, promoting renminbi cross-border flow in both directions.

Four opening and expanding financial services sector both domestically

Explore the negative list system of market access and related reform. Dock high standard international trading rules, discover financial services access national treatment before a negative listing against foreign management model. Promoting the financial services sector to meet the requirements of private capital and foreign institutions open.

(J) to support private capital into the financial sector, support private capital to meet the conditions established by law private banking, financial leasing companies, finance companies, auto finance companies and consumer finance companies and other financial institutions.

(11) support various types of banking institutions by the new legal person eligible agencies, branches, its franchisees, specialized subsidiaries and other ways to enter the free trade zone operations.

(12) support for commercial banks with offshore business qualifications within the free trade zone to expand offshore operations. To risk assessment on the basis of the existing pilot, expanding the scope of pilot banks and businesses at the right time.

(13) support in the free trade zone established in accordance with State regulations for institutional investors of non-standard assets transaction platform.

(14) allows the Securities and futures business in the free trade zone authority carrying out securities and futures business cross-licensed pilot.

(15) allows mutual fund management companies established in the free trade zone specialize in professional fund management subsidiary. Support insurance funds and other long-term funds in accordance with provisions under commissioning securities and futures business in cross-border investments within the free trade zone.

(16) support for securities and futures business institutions in the free trade zone took the lead in cross-border brokerage and cross-border asset management, securities and futures business sector participation in overseas securities and futures and derivatives trading pilot project. Allow the Fund management subsidiary of cross-border asset management, foreign investment advisory services. Support the Shanghai Securities and Futures operation access to interbank foreign exchange market, conducted operations against FX and derivatives trading.

(17) to support established in the free trade zone specializing in overseas equity investment by the project company, supported the establishment of overseas equity investment by eligible investors Fund.

(18) allowed foreign financial institutions to set up joint-venture securities companies in the free trade zone, no more than 49% foreign investment, domestic shareholders is not required for securities companies, expanding a joint venture securities company business scope. Allow qualified foreign institutions in the establishment of joint venture securities investment advisory companies in the free trade zone.

(19) support in free trade zone to set up insurance asset management companies and subsidiaries, Center for the utilization of insurance funds. Support insurance assets management institutions Mezzanine Fund, buyout funds, real estate funds, pension funds, fund health industry private equity fund. Support insurance asset management companies, insurance companies, asset securitization of investment products. Relying on the financial market pilot study on catastrophe bonds.

(20) improve the reinsurance industry chain. Support in the free trade zone set up foreign-funded insurance institutions, setting up a captive insurance company, a mutual insurance company and other new insurance organizations, set up for the development of the insurance industry and provide ancillary services to insurance brokers, insurance agents, risk assessment, loss adjusting, legal consulting and other professional insurance services. Support insurance organizations vigorously carry out cross-border renminbi reinsurance and global policies into the business. Insurance agencies for overseas enterprises in China are encouraged to provide risk guarantees, in the special free trade zone innovation risk spreading mechanisms, energy, aerospace and other special risk insurance business, international capital for domestic catastrophe insurance and special risk insurance offers reinsurance support.

(21) under the current legal framework, support the establishment of a foreign health insurance institutions. Explore the establishment of shipping insurance product registration system. Study launch shipping insurance index.

(22) on the premise of risk control to support innovative development of Internet banking in a free trade zone.

(23) to support the financial development of science and technology to explore investment and loan linkage pilot projects, promotion of entrepreneurship and innovation. On the premise of risk control and legal compliance, allowing perfect technology, such as Silicon Valley Bank financial services characterized by banks and venture capital companies, equity strategic cooperation to explore investment and loan linked, local Government to give the necessary support.

(24) on the premise of risk prevention, research and developing financial management and exploring the establishment of a financial holding company.

(25) in the free trade zone within the open field trial involving national security reviews of foreign investment. Support the of signing a free trade agreement with China National or regional financial institutions take the lead in joint venture financial institutions established in the free trade zone, and gradually raise the stake. In the Mainland and Hong Kong and Macao, the Mainland and Taiwan under the framework of the relevant trade and economic cooperation agreement, increase, Hong Kong, Macao service provider's stake in free trade zone in the shares of financial institutions.

(26) the gathering and development banking, securities, insurance and other financial institutions of all kinds of functionality. Support for large financial institutions to set up operational headquarters in Shanghai. Supporting foreign central banks and international financial organizations in Shanghai and set up a representative office or branch, attracting qualified international banking, securities, insurance companies and other financial institutions in Shanghai to set up branches and functional institutions, as well as the establishment of joint ventures. Support information technology management limited liability insurance company in Shanghai, China set up an innovative subsidiary.

(27) supports free trade zone according to the relevant regulations of the State to set up financial institutions in implementing the "go global" strategy, speeding up overseas distribution network, to expand overseas markets.

Five and speeding up the construction of international financial markets

Rely on innovation and the advantages of opening up free trade zone financial system, give full play to the people's Bank of Shanghai Headquarters coordination function, promoting the construction of platform of international financial markets, widen the channels for foreign participation in the domestic financial market, upgrading the function of configuring resources inside and outside of financial markets.

(28) to support construction of China foreign exchange Trade Center international financial trading platform, enhanced platform services.

(29) to speed up the construction of the follow-up to the international business sector of Shanghai gold exchange, facilitate investor transactions.

(30) the support of Shanghai Stock Exchange [Twitter] in the free trade zone set up international financial asset trading platforms, ordered the introduction of long-term funds outside the progressive involvement of domestic stocks, bonds, funds and other market, exploring the introduction of foreign institutional investor participation in the IPO inquiry placements. Support for the Shanghai Stock Exchange [Twitter] in summing up the Shanghai-Hong Kong based on general experience, meet the needs of domestic and foreign investors, improve trade rules and trade mechanism.

(31) support for accelerating the construction of international energy trading center of Shanghai Futures Exchange, listed crude oil futures as soon as possible. Promoting natural gas, refined oil, marine fuel oil and other futures products research. Allow qualified foreign institutions in the free trade zone of the pilot set up wholly-owned or joint venture futures market service, accept the participation of overseas traders to delegate specific varieties of futures trading in the territory.

(32) supported the establishment of the Shanghai insurance exchanges, promote the formation of reinsurance transactions, price Center.

(33) support the Shanghai clearing house provided to local and foreign investors of shipping finance and commodity OTC derivatives clearing and other services.

(34) equity managed trading institutions to support science and technology small and medium sized enterprises in the free trade zone to provide comprehensive financial services to attract overseas investors to participate in.

Six, strengthen financial supervision and risk prevention

Establishment of a free trade zone development and building Shanghai into an international financial centre, the linkage of financial supervision mechanism, strengthen the prevention of financial risks, and create a favorable financial environment for development.

(35) to improve the financial regulatory system. Explore the establishment of international rules, adapt to the situation of China's financial regulatory framework. Streamlining of administrative approval items, simplify access matters in advance, strengthening the ex-post evaluation and management. Strengthen financial credit information infrastructure construction, promote information sharing, building statistics and monitoring system in line with international standards. Enlarges to the violations of financial credit and market discipline.

(36) to support banks and exchange bureaus to strengthen the free trade zone of financial regulatory services, capacity-building, explore the integrated supervision systems in foreign currency. Innovation Exchange account management system. Integrated Foreign Exchange account type, and optimization methods to improve regulatory efficiency.

(37) free trade zone coordination of financial supervision, exploring the functional supervision. Further free trade zone coordination of financial mechanisms, strengthen cross-sector, cross, cross-markets financial services regulatory coordination and information-sharing. Study on exploring new mechanisms for coordination of Central and local financial regulation. Supports national financial management research to explore the part closer to the market, facilitating product innovation of Shanghai financial regulatory functions delegated to regulatory bodies and financial organizations.

(38) to strengthen the prevention of financial risks. Perfecting the mechanism for monitoring and analysis of cross-border flows, strengthening anti-money laundering, anti-terrorist financing and anti-tax evasion mechanisms. Cross-industry, cross-market and cross-border financial institutions development, open finance initiative, set up and perfect the system of early warning, prevention and solution system, hold no systematic and regional financial risks the bottom line.

(39) and actively improve the financial environment for development. Shanghai Municipal People's Government, in conjunction with relevant departments to further improve the financial credit system construction and other programs.

(40) the pilot measures and administrative regulations or the State Council document, approved by the State Council Department rules are inconsistent, make adjustments in accordance with the procedures to request the State Council to implement decisions.