外汇指定银行办理结汇、售汇业务管理暂行办法 Decree of the Peoples Bank of China (PBC)

for the examination and approval of application for undertaking the operations of foreign exchange purchase and sale is as follows：

　　1. The applications for launching the operations of foreign exchange purchase and sale by the head offices of policy banks， wholly state-owned commercial banks， and commercial banks with joint stocks shall be examined and approved by the PBC together with the SAFE

　　2. Applications for launching the operations of foreign exchange purchase and sale by the branches of the policy banks， wholly state-owned， and commercial banks with joint stocks； city and rural commercial banks； other Chinese-capital financial institutions and foreign-capital banks shall be examined and approved by the local branch or operation administration department of the PBC together with the local branch or exchange administration offices of the SAFE； the branches and operation administration offices of the PBC may， according to the supervising ability of the key sub-branches under their jurisdiction， authorize the key sub-branches to examine and approve， jointly with the local sub-branches of the SAFE， the application for launching the said operations by the sub-branches of banks， city commercial banks， rural commercial banks， other Chinese-capital financial institutions and foreign-capital banks under their jurisdiction.

　　Article 15 In case the approval of an application for undertaking the operations of foreign exchange purchase and sale is made by the PBC consulting with the SAFE， the SAFE shall issue its view to the PBC within 15 working days from the date of receiving the documents to be countersigned.

　　Article 16 The designated foreign exchange banks franchised to handle the operations of foreign exchange purchase and sale， before the official start of the said operations， shall have their electronic equipment and communication facilities prescribed by paragraph 5， article 12 or this Measure inspected by the local SAFE office.

　　Article 17 In application for terminating the operations of foreign exchange purchase and sale， the designated foreign exchange banks shall present the

PBC with the following documents：

　　1. An application report for terminating the operations of foreign exchange purchase and sale （including the reason for termination， measures and procedure for handling related assets and liabilities after termination）；

　　2. The approval document from its board of directors， head office or the superior （the department in charge）；

　　3. Other documents as required by the PBC and SAFE.

　　When examining and approving the applications for terminating the operations of foreign exchange purchase and sale of the designated foreign exchange banks， the PBC shall send to the SAFE a duplicate of the approval.

　　Chapter III Administration of the Positions

　　Article 18 The designated foreign exchange bank shall apply to SAFE for the prescription of the positions within 30 working days from the date of receiving the franchise of the operations of foreign exchange purchase and sale.

　　Article 19 The SAFE shall exercise limit control over the positions of the designated foreign exchange banks and check them on a daily basis.

　　Article 20 The jurisdictions of prescribing the positions are as follows：

　　1. The positions limit for the head offices of the wholly state-owned commercial banks， commercial banks with joint stocks and policy banks shall be prescribed by the SAFE；

　　2. The positions limit for the city commercial banks， rural commercial banks， other Chinese-capital financial institutions， and foreign-capital banks shall be prescribed by the local branch of the SAFE and reported to the SAFE for record；

　　Article 21 The SAFE offices shall prescribe the positions limit for the designated foreign exchange banks according to the principle of legal person， and shall not prescribe separate limits for their branches and sub-branches.

　　The positions of the branches of the designated foreign exchange banks shall be allocated and collectively managed by their head offices within the limits prescribed by the SAFE offices. The result of allocation shall be submitted to the local SAFE offices in the domiciles of the branches for record. The local SAFE offices shall be in charge of the daily administration of the positions of the local designated foreign exchange banks.

　　Article 22 The basis for the prescription and adjustment of the positions shall be is as follows：

　　1. The scale of the paid-in capital or the operating funds of the designated foreign exchange bank；

　　2. The number of the branches and sub-branches；

　　3. The average of daily net foreign exchange purchase；

　　4. The maximum amount of daily sale of foreign exchange；

　　5. The maximum amount of single purchase or sale of foreign exchange；

　　6. The quality of the submission of the data of daily positions；

　　7. The national macro-economic conditions， such as the level of foreign exchange reserves and interest rates of the local and foreign currencies， and so on；

　　8. Other factors.

　　Article 23 Having been approved by SAFE， a designated foreign exchange bank may employ its Renminbi operating funds to buy foreign exchange through inter-bank foreign exchange market as its positions.

　　Upon the receipt of the approval of the SAFE office concerned， a designated foreign exchange bank shall purchase foreign exchange as its positions with its Renminbi operating funds through inter-bank foreign exchange market within 30 working days . If it fails to do so within the time limit， the SAFE office's approval shall automatically expire on its due date.

　　Article 24 Where the designated foreign exchange bank needs to adjust the positions limit due to dramatic changes in the volume of its foreign exchange purchase and sale， it shall present to the concerned SAFE office a written application. Without the approval from the SAFE office the designated foreign exchange bank shall not a

djust the positions limit arbitrarily.

　　Article 25 After receiving the franchise of designated foreign exchange bank， the head office of a designated foreign exchange bank shall apply to the China Foreign Exchange Trading Centre for the membership of inter-bank foreign exchange market； where a branch of a designated foreign exchange bank applies for such membership， it shall obtain the authorisation from its superior （the department in charge）。 After receiving the membership of inter-bank foreign exchange market， the branch and sub-branch of the designated foreign exchange bank may long or short its positions either through the inter-bank foreign exchange market or within its own system. Without such membership， the branch and sub-branch shall long and short its positions only within its own system.

　　Article 26 A designated foreign exchange bank shall manage its positions on a daily basis， keep its positions within the limit prescribed by the SAFE office， and present a report on its daily positions to the SAFE office concerned on a daily basis.

　　Longs and shorts of the positions between the designated foreign exchange banks shall be undertaken only through the inter-bank foreign exchange market.

　　Article 27 The designated foreign exchange bank's positions for each business day shall be calculated in US dollar. The loss or gain resulted from the conversion shall be recorded in other items of currency exchange， and shall not be incorporated into the positions.

　　Article 28 Zero-position management shall be adopted by the designated foreign exchange bank whose positions limit has not been prescribed by the SAFE office concerned. Its net purchase or sale of foreign exchange on every business day shall be settled through the interbank foreign exchange market on the next business day.

　　Article 29 In the event that the designated foreign exchange bank applies for terminating its operations of foreign exchange purchase and sale on its own initiative， or the PBC or SAFE revokes its franchise of the operations of foreign exchange purchase and sale due to its operation violating regulations， the said bank shall apply to the SAFE office concerned within 30 working days from the termination. After receiving the approval from the SAFE office， the designated foreign exchange bank shall clear its positions up to the liquidation.

　　Chapter IV Administration of the Operations of Self-satisfying Foreign Exchange Purchase and Sale

　　Article 30 Unless otherwise stipulated， after reporting to the SAFE office concerned for record， the designated foreign exchange bank shall sell its net foreign exchange profits through inter-bank foreign exchange market within 3 months after the end of the current fiscal year， or within 10 working days after the annual profit distribution arrangement is approved by the board of directors.

　　The net foreign exchange profits of a foreign-funded bank without the license of Renminbi business do not have to be sold.

　　Article 31 The Renminbi net gains of a foreign bank with the license of Renminbi business may be converted into foreign exchange and remitted abroad. The conversion and remittance shall be reported to the local SAFE office for record.

　　Article 32 The self-satisfying commodity import of a designated foreign exchange bank shall， according to relevant provisions related to factorage import， be conducted by the foreign trade company with the franchise of factorage foreign trade. The designated foreign exchange bank shall not make outward payment directly.

　　Article 33 The payment to overseas for self-satisfying

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