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In order to improve the foreign exchange administration on overseas listing, the State Administration of Foreign Exchange (hereinafter referred to the General Administration) and China Securities Regulatory Commission (hereinafter referred to the CSRC) jointly issued the Circular of the State Administration of Foreign Exchange and China Securities Regulatory Commission on the Relevant Issues concerning Further Improving the Foreign Exchange Administration on Overseas Listing (No.77 [2002] of the State Administration of Foreign Exchange, hereinafter referred to Document No. 77 of SAFE) in August 2002. After the distribution of Document No.77 of SAFE, all the branches and departments of the State Administration of Foreign Exchange (hereinafter referred to the foreign exchange administration) had taken all kinds of measures to carry out the work for foreign exchange registration of overseas listing smoothly. But during the implementation of the Circular, some issues have emerged, and need to be further clarified and regulated. In order to improve the administration and regulate the operation, the General Administration has hereby made some regulations on the relevant matters for the implementation of Document No.77 of SAFE, meanwhile, drawn up the Operational Rules on Foreign Exchange Administration of Overseas Listing (please refer to the attachment, hereinafter referred to the "Operational Rules"), and redesigned the Registration Form of Foreign Exchange Registration for Overseas Listed Stock (please refer to the attached Forms 1-6). We hereby make the following notice on the relevant issues: I. The scope of the administration on foreign exchange registration of overseas listing. An H-share company or a domestic shareholder of a Red-chip company shall, after having acquired the approval of CSRC on its overseas offering and listing (including increasing the issued shares), go through the procedures of foreign exchange registration for overseas listed stock at the foreign exchange administration (for Registration Form, please refer to the attachment). As to "The overseas equity financing by the domestic entities by means of domestic registration, overseas private collections, or overseas registration, overseas private collections, or by any other means" in Article 10 of Document No.77 of SAFE, if they have gone through the domestic approval procedures, the foreign exchange administration shall handle the procedures for the foreign exchange registration of overseas listed stock. The foreign exchange administration shall focus on the following-up administration of the overseas listing newly approved. For the Red-chip companies which have acquired the approval of overseas listing before the distribution of Document No. 77 of SAFE, the foreign exchange administration shall urge their domestic shareholders to go through the procedures for the foreign exchange registration of the overseas listed stock; if it is difficult to recognize the registration subjects, the registration may be handled by their dispatched offices or designated agencies who act as their registration agents. II. The relevant costs mentioned in Article 3 and Article 4 of Document No. 77 of SAFE are limited to the following costs wholly or partly in relation to overseas listing: charges paid to such foreign intermediary institutions or service institutions as the foreign sponsors, underwriters, lawyers, auditors, assessors etc., listing costs, trust fees (only limited to the issuance of foreign deposit and collection voucher), printing fees and other reasonable fees paid for the overseas issuance and listing. The costs for overseas listing of an H-share company shall be deducted and reduced in principle from the income of overseas share collection. If the costs need to be paid from within the territory of China, the company shall apply to the foreign exchange administration by virtue of the Registration Form of the H-share Company for Foreign Exchange Registration of the Overseas Listed Stock (The registration shall be made before the issuance of shares), by virtue of the written promise of no acts of evasion of foreign exchange, the payment contract and agreement on the relevant costs, and go through the procedures for the foreign exchanges purchase and payment at the designated forex banks where it is located upon the approval of the foreign exchange administration. No overseas listing costs of a Red-chip company shall be paid from within the territory of China. When the foreign exchange administration is handling the registration after issuing stocks (listing) or making up the registration for an H-share company, or a domestic shareholder of a Red-chip company, whose outlays exceed the items listed in this Article, or whose overseas listing costs exceed 15% of the income gained from shares collection, it shall require the company or the shareholder to make promises in written form ensuring that they have no acts of evasion of foreign exchanges, and at the same time, shall strengthen verification and examination afterwards. III. The H-share company, or the domestic shareholder of a Red-chip company, who applies for opening overseas accounts to the foreign exchange administration in accordance with Document No. 77 of SAFE, shall firstly choose the Chinese-funded banks in the place where the company is listed, and shall also provide the written promise provided by the opening foreign banks to be chosen. The main contents in the written promise shall be: The foreign exchange account shall be used strictly in accordance with the scope of income and expenses of the account, and with the time limit for using the account approved by the foreign exchange administration. The company shall, within 10 working days after the opening or closing of the overseas account, submit to the foreign exchange administration the certificate for opening the account, the certificate for the use of the account and the certificate for cancellation of the account. In case the overseas opening bank selected is inconformity with that approved by the foreign exchange administration, it shall be deemed as opening accounts without the approval of the foreign exchange administration. IV. An H-share company, or a domestic shareholder of a Red-chip company that shall repatriate the capitals gained from selling stocks of subject listed company after approval, shall, within 5 working days after the capitals have been repatriated, put on record the simple written form at the foreign exchange administration by virtue of the certificate for remitting in the capital. The H-share companies, or the domestic shareholders of the Red-chip companies, which have been listed upon approval before the promulgation of Document No.77 of SAFE, and have capitals that should be repatriated but fail to be repatriated before handling the procedures for the foreign exchange registration of the overseas listed stock, shall, within 5 working days from the date of handling the registration procedures, repatriate the capitals in accordance with Document No.77 of SAFE, and close the overseas account accordingly. V. If an H-share company, or a domestic shareholder of a Red-chip company fails to handle the foreign exchange registration of the overseas listed stock prescribed, no special foreign exchange accounts for the stocks shall be opened for them, and no relative business of settlement, sales and payment of foreign exchanges shall be handled for them by the foreign exchange administration or by the designated forex banks. VI. An H-share company, or a domestic shareholder of a Red-chip company, who pays the overseas listing costs in violation of regulations, shall be punished according to the provisions for foreign exchange evasion or fraud by the foreign exchange administration in light of the seriousness and in accordance with Article 39 of the Regulations of the People's Republic of China on Administration of Foreign Exchange VII. In case an H-share company, or a domestic shareholder of a Red-chip company, who, without the approval of the foreign exchange administration, open foreign exchange accounts domestically or overseas, or change the scope for the use of the foreign exchange account, or the time limit and the prescribed quotas thereof, the foreign exchange administration may impose punishment on them in light of the seriousness and in accordance with Article 47 of the Regulations of the People's Republic of China on Administration of Foreign Exchange. VIII. In case an overseas opening bank fails to implement the items approved by the foreign exchange administration, the foreign exchange administration shall report such matters of the opening bank in violation of regulations to the Department of Capital of the General Administration. If the circumstances are serious, the General Administration shall instruct the foreign exchange administration not to approve other listing companies to open accounts in this overseas bank. IX. The procedures for handling the foreign exchange registration and alteration registration of an H-share company, or a domestic shareholder of a Red-chip company, and the procedures for the opening of the domestic stock account, the settlement of capitals from shares collection or the remitting out of overseas listing costs thereof, shall be handled by the branches of the foreign exchange administration of the provincial level, or those of the Shenzhen, Dalian, Qingdao, and Ningbo cities (hereinafter referred to the first level branch administration) themselves or handled by the lower level of branch administration after authorization. The handling of overseas opening account or the remitting out of the capitals for repurchasing shall be examined and approved by the first level branch administration. X. When the foreign exchange administration is handling the foreign exchange business for overseas listing, it shall, according to the Operational Rules (please refer to the attachment), examine and verify the original copy of the relative documents (excluding the documents giving clear indication of checking the original copy and keeping the photocopy in the Operational Rules), and use the approval seal (3) uniformly on the foreign exchange under the capital items. XII. The Circular of the Department of the Administration on Capital Items of the State Administration of Foreign Exchange on the Relevant Issues concerning Doing Well the Work for the Foreign Exchanges Administration of Overseas Listing (No. 29 [2002] of the Department of the Administration on Capital Items under the SAFE) will be repealed simultaneously as of the date of the promulgation of the present Circular. In case other provisions issued before are inconformity with the present Circular, the latter shall prevail. Attachments: Operational Rules for Foreign Exchange Administration on Overseas Listing (Omitted) Form 1. Registration Form of the H-share Company for Foreign Exchange Registration of Overseas Listed Stock (Registration before the issuance of the shares) (Omitted) Form 2. Registration Form of the H-share Company for Foreign Exchange Registration of Overseas Listed Stock (Registration after the issuance of the shares) (Omitted) Form 3. Registration Form of the H-share Company for Foreign Exchange Registration of Overseas Listed Stock ((Registration after the normal time) (Omitted) Form 4. Registration Form of the Red-Chip Company for Foreign Exchanges Registration of Overseas Listed Stock (Registration before listing) (Omitted) Form 5. Registration Form of the Red-Chip Company for Foreign Exchanges Registration of Overseas Listed Stock (Registration after listing) (Omitted) Form 6. Registration Form of the Red-Chip Company for Foreign Exchanges Registration of Overseas Listed Stock (Registration after the normal time) (Omitted) |
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