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	SUPPLEMENTARY CIRCULAR OF STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING STRENGTHENING THE STATISTICS AND MONITORING OF B-SHARE CAPITAL CROSS-BORDER FLOWS

	(No. 72 [2001] of the State Administration of Foreign Exchange promulgated on April 13, 2001)


SUBJECT : B-SHARE CAPITAL CROSS-BORDER FLOWS
ISSUING DEPARTMENT : STATE ADMINISTRATION OF FOREIGN EXCHANGE
ISSUE DATE : 04/13/2001
IMPLEMENT DATE : 04/13/2001
LENGTH : 823 words
TEXT :

In order to strengthen the statistics and monitoring of B-share capital cross-border flows, some issues are notified as follows:

I. Foreign exchange inflows and outflows of B-share security deposit report

(1) In case that institutions authorized to operate B-share business (hereinafter referred to "brokers" receive B-share earnest money of investors remitted from abroad and clearly inform the bank the fund's nature, the bank shall go through the formalities of foreign income reporting on behalf. "Transaction nature" in the foreign incomes reporting form (institutional) shall be "security issuance", and "transaction serial code" shall be 4211. The bank shall indicate "B-share investment earnest money" and the beneficiary in "transaction postscript".

(2) When remitting B-share earnest money abroad required by investors, brokers shall go through the formalities of external payment reporting according to the stipulation of Operational Procedures on BOP Statistics Reporting Via Financial Institution (hereinafter referred to "Operational Procedures"). They shall fill in external payment under non-trade accounts (including capital accounts) reporting form (institutional). "Transaction nature" shall be "equity expenditure" of security investment, and "transaction serial code" shall be 4211. "B-share investment earnest money" shall be indicated in "transaction postscript". The reporting form shall act as a proof for the institutions authorized to operate B-share business to make outward remittance at banks.

(3) In case that China Security Depository & Clearing Cooperation (CSDCC) clear B-share funds with overseas security companies via domestic clearing bank, the clearing bank shall go through the formalities of reporting on behalf of CSDCC. The clearing bank shall fill in the reporting form. "Transaction serial code" shall be 4211. "B-share clearing" shall be indicated in "transaction postscript".

(4) The bank shall examine the basic information form of institution filled and reported by the security companies, and make sure that the type of sector be filled as "financial and insurance sector", the code be 009.

(5) Each branch of the State Administration of Foreign Exchange (SAFE) shall urge the bank and the security company to make up reporting this kind of transactions occurred since February 20, 2001 before May 31, 2001.

II. Non-residents foreign currency payment and collection via domestic banks report

When making foreign payment and collection conducted by domestic banks, non-residents shall go through the formalities of reporting as below according to the stipulations of the Operational Procedures:

(1) In case that the non-resident can go through the formalities of foreign payment and collection at the bank in person, he/she shall define the nature of the transaction. The bank shall choose corresponding serial code for defined transaction and fill in the reporting form;

(2) In case that the non-resident can not go through the formalities of foreign payment and collection at the bank in person, the bank shall go through the formalities of reporting on behalf. In case that the account is owned by a non-resident individual, the bank shall fill in foreign income reporting form (personal) for his/her foreign income. The "transaction serial code" shall be 4000. For his/her external payment, external payment reporting form (personal) shall be filled. The "transaction nature" shall be 3200. In case that the account is owned by a non-resident company or institution, the bank shall fill in foreign income reporting form (institutional) for its foreign income. The "transaction nature" shall be "others" of "other capital". The "transaction serial code" shall be 4000. For institutional external payment, external payment reporting form (institutional) shall be filled. The "transaction nature" shall be "others" of "other capital". The "transaction serial code" shall be 4350. "Non-resident income/expenditure" shall be indicated in "transaction postscript".

III. Non-bank financial institutions foreign currency payment and collection via domestic banks report

According to the stipulation of the Operational Procedures, non-bank financial institutions shall go through the formalities of balance of payment statistics reporting for their external collection and payment conducted by domestic banks.

IV. Information transmission

(1) The bank shall transmit the reporting information to SAFE in time strictly according to the stipulation of the Operational Procedures. In case of external collection, a statement of external collections shall be transmitted to SAFE on the current working day, and the reporting information on these collections shall be transmitted to SAFE by the end of next working day. In case of external payments, the reporting information on these payments shall be transmitted to SAFE by the end of the current working day.

(2) Each branch of SAFE shall transmit to SAFE headquarter the received indirect reporting information on balance of payments (including both elementary data and itemized data) by the end of the current working day.

(3) Each branch of SAFE shall strengthen inspections on banks and brokers to ensure the implementation of relevant regulations. Any violation discovered shall be penalized according to relevant regulations.

Each branch of SAFE upon receiving this circular shall transmit it to the sub-branches, designated foreign exchange banks, and brokers under its jurisdiction immediately. In case of any problems in execution, please respond to Balance of Payment Department of SAFE.