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CIRCULAR ON DOING WELL IN ONGOING REGULATORY AND DOVETAILING WORKS UPON CANCELING THE SECOND GROUP OF ADMINISTRATIVE APPROVAL ITEMS AND CHANGING THE MANAGEMENT METHODS OF SOME ADMINISTRATIVE APPROVAL ITEMS






The China Securities Regulatory Commission

Circular on Doing Well in Ongoing Regulatory and Dovetailing Works Upon Canceling the Second Group of Administrative Approval Items
and Changing the Management Methods of Some Administrative Approval Items

ZhengJianFa [2003] No.17

April 1, 2003

Securities regulatory offices, agencies and special agencies, stock exchanges and futures exchanges, Shanghai and Shenzhen Stock Exchanges
Securities Regulatory Agencies, China Association of Securities and China Association of Futures, China Securities Registration and
Settlement Company, and each department of the SCRC:

On March 27, 2003, the State Council promulgated the Decision on Canceling the Second Group of Administrative Approval Items and on
Changing the Management Methods of a Group of Administrative Approval Items (GuoFa [2003] No.5) (hereinafter referred to as the “Decision”).
With a view to carry out and implement the spirits of the Decisions and do well in the ongoing regulatory and dovetailing works upon
cancellation of the second group of administrative approval items and change of management methods of some administrative approval
items, here is to notify you of the following matters:

1.

For the administrative approval items revoked in the Decision (see the attachment), the CSRC and its agencies will no longer accept,
or examine and approve if accepted already.

2.

For the ongoing regulatory and dovetailing works upon cancellation of the relevant administrative approval items, please enforce as
per the ongoing management modes determined in the attachment.

3.

For the change of management methods of some administrative approval items, please do well in the transfer of the relevant works to
the professional associations, put forth the self-disciplinary principles of professional associations, guide them to formulate operational
procedures and establish the self-disciplinary mechanism.

4.

According to the requirements for the Decision and this Circular, please research on and timely cope with the circumstances and problems
that may occur upon the cancellation of the relevant administrative approval items and change of the management methods for some
administrative approval items, earnestly do well in the ongoing regulatory and dovetailing works, and prevent any disconnection in
management. In case of any material circumstance, please report timely to the CSRC.

Attachment:Follow-up and Dovetailing of the Ongoing Management Methods and Work Upon Cancellation of the Second Group of Administrative Approval
Items of China Securities Regulatory Commissionhtm/e03060.htmNo

￿￿

No.

Item Name Cancelled 

Ongoing Management and Work Dovetailing

1  

Ratification of A-share settlement banks  

The Securities Registration and Settlement Company shall formulate the standards and criteria for ratification of A-share
settlement banks

2  

Record of the contracts signed between securities companies and depository banks, or chief depository banks  

Within seven days upon signature of the contracts with depository banks and chief depository banks, the securities companies
shall report the copies of the contracts in question to the CSRC and the local CSRC agency.

3  

Record of the contracts signed between settlement companies and settlement banks  

The Securities Registration and Settlement Company shall report its sample format of the contracts signed with the settlement
banks to the CSRC.

4  

Record of the documents of the members￿￿ assembly of Stock Exchanges  

The Stock Exchanges shall within ten working days upon the members￿￿ assembly of Stock Exchanges submit all the documents
and relevant circumstances to the CSRC

5  

Record of the business agreements between securities registration and settlement institutions and Stock Exchanges
 

The securities registration and settlement institutions shall submit the business agreements signed or modified with the
Stock Exchanges to the CSRC.

6  

Record of the suspension or restoration of the trading of listed securities by Stock Exchanges  

The CSRC shall not examine and approve such administrative examination and approval items but strengthen the examination
and inspection on the stop or resumption of the listing of the Stock Exchanges

7  

Approval of the suspension or restoration of the trading of listed securities by Stock Exchanges  

Same as above (ditto)

8  

Record of listing agreements  

The CSRC shall no longer examine and approve such administrative examination and approval items

9  

Record of the internal administrative systems and work procedures of securities registration and settlement institutions
on business, finance and security etc  

The internal management system and risk prevention system formulated by the securities registration and settlement institutions
should be reported to the CSRC.

10  

Approval of the period for keeping of original business proofs fixed by securities registration and settlement institutions
 

Enforced according to Article 53 of the Securities Law of the PRC.

11  

Examination and approval for the services provided by Stock Exchanges for the transaction types that are not listed by them
 

In case of providing services for the transactions types that are not listed on their stock exchanges, the Stock Exchanges
shall report the relevant circumstances to the CSRC.

12  

Examination and acceptance of the preparation for establishment of securities companies  

The CSRC shall no longer examine and approve such administrative examination and approval items

13  

Examination and approval of the establishment of securities institutions abroad by non-securities institutions
 

The CSRC shall no longer examine and approve such administrative examination and approval items

14  

Ratification of the change, addition or reduction of representatives, deputy representatives, and staff members of foreign
nationalities or from Hong Kong, Macao and Taiwan by the representative offices in China of foreign securities
institutions  

Upon change, addition or reduction of representatives, deputy representatives, and staff members of foreign nationalities
or from Hong Kong, Macao and Taiwan by the representative offices in China of foreign securities institutions,
the name list, identity certification and resumes should be reported to the CSRC and the local CSRC agencies

15  

Record of the employment of Chinese citizens to be ordinary staff members by the representative offices in China of foreign
securities institutions  

Ditto

16  

Ratification of the representatives and deputy representatives of the representative offices in China of foreign securities
institutions  

Ditto

17  

Examination and approval of the cancellation of securities institutions set up overseas by domestic non-securities institutions
 

The CSRC shall no longer examine and approve such administrative examination and approval items

18  

Recommendation for the securities companies entering the Inter-bank borrowing market  

The securities companies may apply for with the People￿￿s Bank of China or other competent authorities. If the People￿￿s
Bank of China or other competent authorities require for opinions to be issued by the CSRC, the CSRC shall coordinate
accordingly

19  

Designation of the training institutions of securities practitioners  

Handled with according to the relevant provisions of the China Association of Securities

20  

Record of the personnel employed by securities intermediary institutions  

Handled with according to the relevant provisions of the China Association of Securities

21  

Record of the change of employers of securities practitioners  

Handled with according to the relevant provisions of the China Association of Securities

22  

Record of the part-time jobs in non-commercial institutions of the managerial personnel and fund managers  

The fund management companies shall report to the CSRC the part-time jobs in non-commercial institutions of the managerial
personnel and fund managers

23  

Record of the appointment and dismissal of the assistants to the general manager and department managers of fund management
companies and fund trustee departments  

The engagement and dismissal of the assistant General Managers and departmental managers of fund management companies and
fund custodian departments should be reported together with the submission of the database information for fund
supervision

24  

Record of the relevant materials of establishment of offices within China by fund management companies  

Within 25 working days upon establishing offices in the territory of China, the fund management companies shall report the
relevant content, including the time and place for establishing such offices, the responsible persons and contact
mode; and the acts of the offices should be undertaken by the fund management companies as a part of the regulations
on the fund management companies by the CSRC.

25  

Examination and approval for the establishment of futures and investment consultation institutions  

The CSRC shall no longer examine and approve such administrative examination and approval items but review and ratify the
qualifications of the futures investment advisory institutions for futures investment advisory services, and
issue the Qualification Permits for Futures Investment Advisory Services. For the institutions that project to apply
for the qualifications for futures investment advisory services, their practitioners shall have obtained the Qualification
Certificate for futures investment consultation issued by China Association of Futures

26  

Review of the letters of legal advice issued by Chinese lawyers concerning the issuing of stocks and listing overseas by
overseas companies involving domestic rights and interests  

The CSRC shall no longer examine and approve such administrative examination and approval items

27  

Record of the agreements on listing of convertible company bonds  

The CSRC shall no longer examine and approve such administrative examination and approval items

￿￿



CIRCULAR ON INVESTIGATING ADOPTION OF THE ENTERPRISE ACCOUNTING SYSTEM BY ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Finance

Circular on Investigating Adoption of the Enterprise Accounting System by Enterprises with Foreign Investment

CaiBanKuai [2003] No. 8

March 6, 2003

Financial Departments (Bureaus) of provinces, autonomous regions, municipalities directly under the Central Government and municipalities
separately listed on the state plan:

Enterprises with Foreign Investment have started adoption the Enterprise Accounting System as of January 11, 2002 and in order to
further understand the implementation of the Enterprise Accounting System by enterprises with foreign investment, please arrange
for the local certified public accountants firms engaged in auditing enterprises with foreign investment to fill in the attached
Questionnaires (Attachment 1). The certified public accountants firms shall provide opinions and materials on the following issues
according to the actual circumstances:

I.

For enterprises with foreign investment that have adopted the Enterprise Accounting System, what problems exist in account reconciliation
and actual execution? What are the main reasons?

II.

For enterprises with foreign investment that have not adopted the Enterprise Accounting System, what are the main reasons for not
adopting the Enterprise Accounting System? What are the accounting standards that have been adopted by the certified public accountants
firms in auditing the annual reports of the enterprises with foreign investment? What type of auditing opinions has the certified
public accountants firms issued? In case the certified public accountants have issued non-standard auditing opinion, what are the
opinions from the relevant departments of the administration for industry and commerce and taxation?

III.

What are the opinions and suggestions of the certified public accountants firms on the implementation of the Enterprise Accounting
System by the enterprises with foreign investment? What are the opinions and suggestions of the enterprise with foreign investment
on execution of the Enterprise Accounting System?

The local accounting administration of financial department are required to summarize the questionnaires and the relevant materials
filled in by the certified public accountants firms, prepare a written report, which should be sent to the Accounting Department
of the Ministry of Finance together with the materials (original or copy) provided by the certified public accountants firms by May
30, 2003.

 
The Ministry of Finance
2003-03-06

 



CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON THE TRANSITIONAL POLICY AND MEASURES AFTER CANCELING ADMINISTRATIVE EXAMINATION AND APPROVAL OF FOREIGN EXCHANGE ADMINISTRATION OF SOME CAPITAL PROJECTS

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination
and Approval of Foreign Exchange Administration of Some Capital Projects

HuiFa [2003] No.50

April 3, 2003

Branches and foreign exchange administration departments under the State Administration of Foreign Exchange in provinces, autonomous
regions and municipalities directly under the Central Government, and branch administrations of Shenzhen, Dalian, Qingdao, Xiamen,
Ningbo:

Decisions of the State Council on Canceling the First Batch of Administration Examination and Approval Projects (GuoFa [2002] No.24)
and the Decisions of the State Council on Canceling the Second Batch of Administration Examination and Approval Projects and Altering
the Administrative Methods for Some Administration Examination and Approval Projects (GuoFa [2003] No.5) have been promulgated. In
order to ensure the smooth linking of the administration of capital projects and avoid disjoint after cancellation of relevant administration
examination and approval projects, relevant policy and measures for the transitional period are hereby made as follows:

I.

Cancellation of examinations and approvals on the financing conditions of long-and-medium-term foreign debts of domestic Chinese-capital
organizations, on the financial conditions of financing and leasing of domestic Chinese-capital organizations, on the time selection
and financing conditions for issuing debts abroad, and on the financial conditions for project financing.

After cancellation of relevant examinations and approvals, in borrowing medium-long term foreign debts, issuing medium-long term bonds
denominated in foreign exchange, conducting aircraft financial leasing and project financing, Chinese-capital organizations shall
no longer be required to go through examination and approval formalities with administration of foreign exchange on terms of relevant
financing as they shall only be obliged to handle procedures on registration of foreign debts on a case by case basis after conclusion
of borrowing contracts.

During the course of the Chinese-capital organizations going through formalities of registration of foreign debts for above items
and during the course of enterprises with foreign investment going through formalities of registration of foreign debts for project
financing, capital raising and aircraft financial leasing, the branches and sub-branches of administration of foreign exchange shall
handle the registration in accordance with following procedures:

(I)

All branches and sub-branches of the administrations of foreign exchange shall verify borrowing qualifications of borrowers according
to operational procedures on borrowing qualifications concerning medium-long term international commercial loans, project financing,
aircraft financial leasing, issuance of bonds denominated in foreign exchange(see Attachment 1, Attachment 2, Attachment 3, Attachment
4). Qualification verifications for aircraft financial leasing, project financing and issuance of bonds denominated in foreign exchange
shall be conducted according to corresponding operational procedures for borrowing qualifications while checks on other forms of
medium-long term overseas borrowing (except for those made by enterprises with foreign investment) shall be conducted according to
operational procedures for borrowing qualifications concerning medium-long term international commercial loans.

(II)

Where the borrower meets the above verification requirements on borrowing qualifications, the branches and sub-branches of administration
of foreign exchange shall handle procedures of registration of conclusion of foreign debt contracts and of payment withdrawal, establishment
of special foreign debt account and settlement of foreign exchange and repayment of principals and interests and shall not require
the debtor to present prior approval documents issued by administrations of foreign exchanges.

(III)

Where the borrower does not meet the verification requirements on borrowing qualifications or where registration procedures does not
conform with requirements or where relevant articles in overseas borrowing arrangements do not conform with prevailing provisions
on administration of foreign exchange (such as account arrangement, guarantee arrangement, value preserving clause, etc.), the borrower
shall obtain written approval from the State Administration of Foreign Exchange in advance. The branches and sub-branches of administrations
of foreign exchange shall not handle registration procedures for the borrower without the written approval from the State Administration
of Foreign Exchange.

(IV)

Debtors shall handle withdrawal of payment after they have obtained certificates of registration of foreign debt issued by administration
of foreign exchange.

(V)

The branches and sub-branches shall handle registration of foreign debts of medium-long term overseas borrowings by Chinese-capital
organizations within the following time limits from the date on which all materials required by administration of foreign exchange
are presented by enterprises: 1. The branches and sub-branches shall grant the registration within 10 working days if no report to
and approval from the State Administration of Foreign Exchange is required. 2. The branches and sub-branches shall grant the registration
within 30 working days if no report to and approval from The State Administration of Foreign Exchange is required (which shall include
10 working days for The State Administration of Foreign Exchange to handle procedures).

II.

Cancellation of examination and approval on large amount financing by overseas branches of domestic Chinese-capital financial institutions

After cancellation of examination and approval on large amount financing by overseas branches of domestic Chinese-capital financial
institutions, the institutions shall not be required to handle prior examination and approval procedures with administration of foreign
exchange provided that they shall report the financing to administration of foreign exchange for the record in advance, which means
where a overseas branch of a domestic Chinese-capital financial institution raises commercial loans in a sum of 50,000,000 United
States dollars (inclusive) equivalent in one time, it shall report to the State Administration of Foreign Exchange for the record
10 working days in advance by its head office.

III.

Cancellation of examination and approval on establishment, alteration and cancellation of B share’s margin account opened with domestic
foreign-capital banks by securities companies

After cancellation of the examination and approval, the ways of management of administration of foreign exchange on establishment,
alteration and cancellation of B share’s settlement account (now referred to as the “clients transaction settlement account”) by
securities companies shall be as follows:

(I)

A securities company authorized to conduct foreign exchange business shall open domestic investor’s B share’s settlement account and
foreign investor’s B share’s settlement account separately with banks at its locality by presenting valid License for Conducting
Foreign Exchange Business in Securities Transactions and evidencing documents granting authorizations to conduct relevant businesses
issued by the CSRC etc.

A business department of a securities company authorized to conduct foreign exchange business shall open domestic investor’s B share’s
settlement account and foreign investor’s B share’s settlement account with banks at its locality by presenting power of attorney
of its head office, duplicate of License for Conducting Foreign Exchange Business in Securities Transactions of the securities company,
duplicates of evidencing documents granting authorization to conduct relevant businesses issued by the CSRC etc.

(II)

Within 3 days of establishment, alteration or cancellation of domestic investors’ B share’s settlement account and foreign investors’
B share’s settlement account, the securities companies or their business departments shall report to administration of foreign exchange
for the record.

(III)

The scope of receipt of a domestic investor’s B share’s settlement account shall be the foreign exchange funds transferred from its
domestic foreign exchange non-cash savings account or cash savings account and foreign exchange proceeds from foreign exchange securities
transactions. Its scope of payment shall be the foreign exchange needed in its foreign exchange securities transactions and transfers
therefrom to foreign exchange cash accounts opened with domestic commercial banks. No payment shall be remitted abroad.

The scope of receipt of a foreign investor’s B share’s settlement account shall be foreign exchange funds remitted from aboard by
the foreign investor or transferred from its domestic foreign exchange non-cash savings account and foreign exchange proceeds from
its foreign exchange securities transactions. Its scope of payment shall be the foreign exchange needed in its foreign exchange securities
transactions, transfers therefrom to foreign exchange non-cash accounts opened with domestic commercial banks and foreign exchange
funds to be remitted abroad.

IV.

Cancellation of examination on foreign exchange risks in making investment abroad by domestic institutions

Administration of foreign exchange shall no longer conduct examination on foreign exchange risks in making investment abroad and shall
simultaneously simplify examination procedures on source of foreign exchange capital for making investment abroad. For detailed rules
of operation please refer to the Circular of the State Administration of Foreign Exchange on Simplifying the Examination of Foreign
Exchange Capital Source of Investment Abroad (HuiFa [2003] No.43)

All Branches of the administrations of foreign exchange shall promptly transmit this Circular to designated banks of foreign exchange
at their locality and shall handle relevant business strictly according to requirements of the Circular.

This is hereby the notification.

Attachments:

1. Examination on the Qualifications of Chinese-capital Organizations for Borrowing Medium-long Term International Commercial Loans
(omitted)

2. Examination on the Qualifications for Borrowing under Project Financing (omitted)

3. Examination on the Qualifications for Borrowing under Aircraft Financial Leasing (omitted)

4. Examination on the Qualifications for Borrowing under Issuing Bonds Overseas (omitted)



 
The State Administration of Foreign Exchange
2003-04-03

 






1234Page 4 of 4

CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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