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	NOTICE OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE OF FOREIGN EXCHANGE ADMINISTRATION OF OVERSEAS LISTING (2005)

	(No. 6 [2005] of the State Administration of Foreign Exchange promulgated on February 1, 2005, which shall come into force as of March 1, 2005)


SUBJECT : FOREIGN EXCHANGE; OVERSEAS LISTING
ISSUING DEPARTMENT : THE STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 02/01/2005
IMPLEMENT DATE : 03/01/2005
LENGTH : 881 words
TEXT :

In order to improve the foreign exchange administration of overseas listing, the State Administration of Foreign Exchange (hereinafter referred to the SAFE) and China Securities Regulatory Commission jointly distributed the Notice of the SAFE and China Securities Regulatory Commission of Further Improving Foreign Exchange Administration of Overseas Listing (No. 77 [2002] of the SAFE, hereinafter referred to Document No. 77 of the SAFE) in August of 2002. In order to regulate the specific operations, the SAFE distributed the Notice of Improving Foreign Exchange Administration of Overseas Listing (Document No. 108 [2003] of the SAFE, hereinafter referred to Document No. 108 of the SAFE) in September 2003, clarifying and detailing the contents in Document No. 77 of the SAFE. With the joint efforts of all branches, Document No. 77 of the SAFE and Document No. 108 of the SAFE were implemented smoothly, and good policy effects have been made.

In the recent two years, the enterprises listed overseas have some new demands for business development. Therefore, upon careful study, we hereby adjust the relevant foreign exchange administration matters in Document No. 77 of the SAFE and Document No. 108 of the SAFE as follows:

I. The time for an H-share company or a domestic shareholder of a Red-chip company to transfer its funds back into the territory is extended up to "within 6 months after the funds have been raised", and the period for a special overseas foreign exchange account is extended up to "2 years as of opening of the account".

Where an H-share company or a domestic shareholder of a Red-chip company needs to extend the use period of a special overseas foreign exchange account, it shall file an application to the local foreign exchange administration office 3 months prior to the expiry of valid term of the account, and needs to provide the following documents at the time of application:

(1) a written application;

(2) documents on use of the special overseas foreign exchange account in the recent 2 years; and

(3) testimonials provided by the opening bank concerning Paragraph (2).

II. Where an H-share company applies for depositing outside the territory the foreign exchange funds raised from overseas issuance of stocks or obtained from decrease of the stocks it holds in a listed company, it shall provide the local foreign exchange administration office with the following documents:

(1) a written application; and

(2) relevant foreign exchange registration documents on overseas listing of stocks.

The local foreign exchange administration office shall, within 20 working days as of receipt of the formal application materials, make a decision on whether or not to grant the approval. If it grants the approval, it shall issue the approval document, and adjust the relevant contents of foreign exchange registration of the stocks listed overseas accordingly.

III. Where a domestic shareholder of a Red-chip company applies for decreasing the stocks it holds in a listed company or for depositing outside the territory the foreign exchange funds obtained from the sale of its assets (or equities) through the listed company, it shall bring the following documents to file an application to the local foreign exchange administration office:

(1) a written application; and

(2) the contract on transfer of assets (or equities).

The local foreign exchange administration office shall, within 20 working days as of receipt of the formal application materials, make a decision on whether or not to grant the approval. If it grants the approval, it shall issue the approval document, and adjust the relevant contents of foreign exchange registration of the stocks listed overseas accordingly.

IV. The foreign exchange funds deposited outside the territory by an H-share company or a domestic shareholder of a Red-chip company may be used to pay the relevant expenses prescribed in Article 1 of Document No. 108 of the SAFE, to buy the structural products with retentive value which are issued or sold by the opening bank, or be used for the purposes prescribed in the prospectus, or to pay other expenditures approved by the foreign exchange administration office.

V. An H-share company or a domestic shareholder of a Red-chip company shall report its use of the special overseas foreign exchange account to the local foreign exchange administration office by quarter, and the reported contents shall at least include the balance of the account, the relevant information on buying the structural products with retentive value, and other payments and expenditures occurring with this account.

VI. Where an H-share company or a domestic shareholder of a Red-chip company transfers its foreign exchange funds obtained from decrease of the stocks it holds in a listed company or from sale of its assets (or equities) in a listed company back into the territory, it may apply to the local foreign exchange administration office for opening a special account (or by using the existing special account) to preserve the foreign exchanges, but may not have the foreign exchanges settled without approval of the local foreign exchange administration office.

VII. This Notice shall come into force as of March 1, 2005. In the event of any previous provision in conflict with this Notice, this Notice shall prevail.

VIII. Each branch is requested to timely report the problems it meets with in implementation of this Notice to the Capital Account Management Department of the SAFE.