Banking & Finance

China Securities Regulatory Commission, Circular on Issues Relevant to Audit of Companies that Issue Foreign Investment Shares Listed in China [Legislation Digest]
中国证券监督管理委员会关于发行境内上市外资股的公司审计有关问题的通知
Double audit requirement of B shares cancelled.

China Banking Regulatory Commission, Guidelines for the Syndicated Loan Business [Legislation Digest]
中国银行业监督管理委员会银团贷款业务指引
China promotes syndicated loans.

People's Bank of China, Provisions for the Administration of the Forward Rate Agreement Business [Legislation Digest]
中国人民银行远期利率协议业务管理规定
PBOC launches forward rate agreements.

QDII Fund Management Companies

China Banking Regulatory Commission, Circular on the Full Implementation of the «Enterprise Accounting Guidelines» by Financial Institutions in the Banking Industry [Legislation Digest]
中国银行监督管理委员会关于银行业金融机构全面执行《企业会计准则》的通知
New guidelines to control manipulation of profits by banks.

Best of the Best: China Law & Practice Awards 2007
Navigating China's legal services market can be tricky: With so many law firms to choose from, in can be challenging for in-house counsel to select the best external advisers for their companies. China Law&Practice reveals the winners of its inaugural awards, which identify the top deals and law firms in five key practice areas.

O'Melveny & Myers represented Redbaby in its US$25 million financing deal

Public Grant of Land Use Rights and Mortgage Lending Risks

NEW SYNDICATE LOAN RULES PERPLEX EXPERTS

Foreign Investment in Non-performing Loans in China

Acquisition of Domestic FMCs by Foreign Investors Part II

Shanghai Stock Exchange, Supplementary Circular on Issues Relevant to the Securities Transactions of Qualified Foreign Institutional Investors [Legislation Digest]
上海证券交易所关于合格境外机构投资者证券交易有关事项的补充通知

China Law & Practice Awards 2007: The Finalists
The inaugural 2007 China Law & Practice awards are being given to recognize excellence in China's legal services field. China Law & Practice provides a definitive list of the top law firms serving the China market.

People's Bank of China, Circular on Issues Relevant to the Launch of Swap Transactions Between Renminbi and Foreign Currencies in the Interbank Foreign Exchange Market [Legislation Digest]
中国人民银行关于在银行间外汇市场开办人民币外汇货币掉期业务有关问题的通知
PBOC launches swaps between renminbi and foreign currencies.

Changing Legal Requirements and Practices in Real Estate

POTENTIAL STILL STRONG FOR PRIVATE EQUITY IN CHINA, SAYS STUDY

Trial Measures for the Administration of Overseas Securities Investment by Qualified Domestic Institutional Investors [Full Text Translation]
合格境内机构投资者境外证券投资管理试行办法
This law regulates investments in overseas securities by qualified domestic institutional investors and to protect the interests of investors. Parts Two and Three set out the requirements for being a qualified domestic institutional investor (QDII), and an oversea investment consultant. Part Four deals with the custody of assets, power and duties of a custodian, and the appointment of an overseas asset custodian. Part Five is concerned with the duties and transparency of the QDII. Part Six sets out the limit of fund management.

China Outbound Portfolio Investment: Fleshing Out Regulations for QDII Securities Institutions & Insurers
Recent legislation has filled the gaps in the PRC's qualified domestic institutional investor (QDII) regulations. Changes affect China's balance of payments and international relations.

Limited Liability Partnerships: The Best Structure for Funds?

State Administration of Foreign Exchange, Circular on Retaining Foreign Exchange Income on the Current Account by Domestic Institutions [Legislation Digest]
国家外汇管理局关于境内机构自行保留经常项目外汇收入的通知
Lifting the restrictions on the amount of foreign exchange income on the current account that may be retained by domestic institutions.

Tentative Measures for the Administration of Overseas Investment of Insurance Capital [Full Text Translation]
保险资金境外投资管理暂行办法
These Tentative Measures strengthen the administration of overseas investment of insurance capital, and to protect the interests of involved parties, whilst at the same time further relaxing overseas investment of insurance capital.

State Administration of Foreign Exchange and Ministry of Commerce, Circular on Issues Relevant to the Repeal of the «Trial Measures for Verification of Foreign Exchange Received from Exports» [Legislation Digest]
国家外汇管理局、商务部关于废止《出口收汇考核试行办法》有关问题的通知
Policy encouraging foreign exchange from exports removed.

Acquisition of Domestic FMCs by Foreign Investors Part I

China Insurance Regulatory Commission, People's Bank of China and State Administration of Foreign Exchange, Tentative Measures for the Administration of Overseas Investment of Insurance Capital [Legislation Digest]
中国保险监督管理委员会、中国人民银行、国家外汇管理局保险资金境外投资管理暂行办法
Further relaxing overseas investment of insurance capital.

China Securities Regulatory Commission, Trial Measures for the Administration of Overseas Securities Investment by Qualified Domestic Institutional Investors [Legislation Digest]
中国证券监督管理委员会合格境内机构投资者境外证券投资管理试行办法
Overseas securities investment available for fund management companies and securities companies.

State Administration of Foreign Exchange, Plan for the Launch of Pilot Projects for Direct Investment in Overseas Stock Markets by Domestic Individuals [Legislation Digest]
国家外汇管理局开展境内个人直接投资境外证券市场试点方案
Individual Chinese citizens allowed to invest in the Hong Kong stock market.

State Council, Implementing Measures for Levy and Collection of Individual Income Tax on Interest Income from Savings Deposits (Revised) [Legislation Digest]
国务院对储蓄存款利息所得征收个人所得税的实施办法 (修订)
Individual income tax on savings interest significantly reduced.

Supreme People's Court, Several Provisions on the Trial of Cases Involving Civil Tort Compensation in Connection with Audit Activities by Accounting Firms [Legislation Digest]
最高人民法院关于审理涉及会计师事务所在审计业务活动中民事侵权赔偿案件的若干规定
Accounting firms face stringent tort liability when conducting audits.

Tough on Accountants: The New PRC Accounting Regulations

Methods of Overall Listing and Related Legal Issues

Ministry of Finance and China Securities Regulatory Commission, Circular on Issues Relevant to the Engagement in Securities- and Futures-related Businesses by Accounting Firms [Legislation Digest]
财政部、中国证券监督管理委员会关于会计师事务所从事证券、期货相关业务
Requirements on accounting firms engaging in securities- and futures-related businesses imposed.

Yuan Tai

China Banking Regulatory Commission, Measures for the Administration of Lease Financing Companies [Legislation Digest]
中国银行业监督管理委员金融租赁公司管理办法
New measures to open up the lease financing sector to foreign investment

Measures for the Administration of Lease Financing Companies [Full Text Translation]
金融租赁公司管理办法
The China Bank Regulatory Commission is reviewing applications by five commercial banks to establish finance leasing companies. How will this new business vehicle impact the Chinese finance leasing landscape?

Restrictions on Foreign Investment in the Real Estate Industry
New rules on foreign investment in real estate will further strengthen administration related to the examination, approval, registration and supervision of foreign direct investment in the industry.

People's Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission, Measures for the Administration of Customer Identification, and Preservation of Customer Identity Information and Transaction Records by Financial Institutions [Legislation Digest]
中国人民银行、中国银行业监督管理委员会、中国证券监督管理委员会、中国保险监督管理委员会金融机构客户身份识别和客户身份数据及交易记录保存管理办法
Financial institutions required to check customer identity to prevent money laundering.

SAFE Plugs Holes for China/Offshore Round-trip Investments
Cross-border "round-trip" investments and related transactions are now supported and constrained by newly-standardized comprehensive governmental procedures for foreign exchange registration.

Finance Leasing with Chinese Characteristics
The China Bank Regulatory Commission is reviewing applications by five commercial banks to establish finance leasing companies. How will this new business vehicle impact the Chinese finance leasing landscape?

HONG KONG REIT LISTING FOR PRC-ASSET REAL ESTATE TRUST

Other Recent Legislation for this Month [Legislation Digest]

China's New Property Law: Practical Issues
The new Law provides a comprehensive framework for the protection of property rights for both foreign and domestic parties. Clarity of title and stability of property rights will be easier to attain.

Circular on Revising the Scope of Overseas Investment for Overseas Financial Management Services on Behalf of Customers of Commercial Banks [Full Text Translation]
关于调整商业银行代客境外理财业务境外投资范围的通知
This circular revises the scope of overseas investment, and sets out conditions on offering a product of overseas financial management in overseas stocks.

Investing in Pre-IPO-Stage PRC Companies

Measures for the Administration of Trust Companies [Full Text Translation]
信托公司管理办法
This law aims to establish the regulatory framework for business activities of trust companies and promote the healthy development of the trust industry.

Share Pledges in China: Prospects under the New Property Law
The PRC Property Law improves upon the existing vague legal provisions and inconsistent local authority practices regarding share pledges.

China Banking Regulatory Commission, Measures for the Administration of Trust Companies [Legislation Digest]
中国银行业监督管理委员会信托公司管理办法
More provisions to segregate a trust company's business for its own account and its trust business.

China Outbound Investment: Banks' Scope Broadened, Trusts Added
PRC domestic savings will soon have additional overseas outlets, as regulations are issued to permit more types of outbound investment by greater types of qualified domestic institutional investors.

Tentative Measures for the Administration of the Entrusted Overseas Financial Management Business of Trust Companies [Full Text Translation]
信托公司受托境外理财业务管理暂行办法
The Tentative Measures stipulates requirements for engaging in entrusted overseas financial management business, the limit of foreign exchange payments for investments and fund management, risk management and transparency of business.

China Banking Regulatory Commission and State Administration of Foreign Exchange, Tentative Measures for the Administration of the Entrusted Overseas Financial Management Business of Trust Companies [Legislation Digest]
中国银行业监督管理委员会、国家外汇管理局信托公司受托境外理财业务管理暂行办法
Trust companies admitted to the QDII group.

China's State Investment Company To Acquire Stake In Us Private Equity Group

General Office of the China Banking Regulatory Commission, Circular on Revising the Scope of Overseas Investment for Overseas Financial Management Services on Behalf of Customers of Commercial Banks [Legislation Digest]
中国银监会办公厅关于调整商业银行代客境外理财业务境外投资范围的通知
Commercial bank QDIIs allowed to invest in overseas stocks.

China Banking Regulatory Commission, Circular on Further Preventing Risks Relevant to Business Transactions Between Banking Financial Institutions and Securities Companies [Legislation Digest]
中国银行业监督管理委员会关于进一步防范银行业金融机构与证券公司业务往来相关风险的通知
Banks required to ensure that loans are not used for stock trading.

People's Bank of China, Announcement on Enlarging the Floating Range of the Transaction Price Between the Renminbi and US Dollar on the Interbank Spot Foreign Exchange Market [Legislation Digest]
中国人民银行关于扩大银行间即期外汇市场人民币兑美元交易价浮动幅度的公告
Renminbi allowed to appreciate further.

People's Bank of China and National Development and Reform Commission, Tentative Measures for the Administration of the Issuance of Renminbi Bonds in the Hong Kong Special Administrative Region by Domestic Financial Institutions [Legislation Digest]
中国人民银行、国家发展和改革委员会境内金融机构赴香港特别行政区发行人民币债券管理暂行办法
Hong Kong becomse the first renminbi bond market outside mainland China.

Ministry of Finance and State Administration of Taxation, Circular on Tax Policies Relevant to Promoting the Development of Venture Capital Investment Enterprises [Legislation Digest]
财政部、国家税务总局关于促进创业投资企业发展有关税收政策的通知
Tax reduction for venture capital investment enterprises investing in unlisted technology SMEs.

Other Recent Legislation for this Month [Legislation Digest]

Property Markets to Stabilize under New Property Law

Employee Stock Plans for Companies Listing on a Domestic Exchange

PRC Taxes on Hong Kong & Foreign Companies: Clarifications, Changes, Challenges & Opportunities
Hong Kong and foreign companies making frequent visits to mainland China are likely to be subject to PRC enterprise income tax, while foreign investors, lenders and technology licensors will face challenges in seeking the most preferential rates of PRC withholding tax.

State Administration of Foreign Exchange, Circular on Issues Relevant to the Administration of Short-term Foreign Debts of Financial Institutions for the Year 2007 [Legislation Digest]
国家外汇管理局关于2007 年度金融机构短期外债管理有关问题的通知
SAFE reduces the short-term foreign debt indicators of financial institutions for 2007.

State Administration of Foreign Exchange, Circular on Adjusting the Administration Mode for Market Entry into and Exit from the Spot Settlement and Sale of Foreign Exchange Businesses of Banks [Legislation Digest]
国家外汇管理局关于调整银行即期结售汇业务市场准入和退出管理方式的通知
Application procedures for settlement and sale of foreign exchange businesses by banks simplified.

Other Recent Legislation for this Month [Legislation Digest]

China Tightens its Environmental Law Control over New Investment Projects
How environmental law is applied in China, and how stepped-up enforcement of existing legislation is ensuring compliance with the State Environmental Protection Agency's objectives?

China Securities Regulatory Commission, Circular on the Cessation of the Implementation of Special Audit Requirements on Specific Listed Companies [Legislation Digest]
中国证券监督管理委员会关于不再实施特定上市公司特殊审计要求的通知
Listed financial companies no longer required to hire international accounting firms for audits.

Interpreting the New Enterprise Income Tax Law
The new Enterprise Income Tax Law will take effect on January 2008. What changes should be expected by foreign investors?

New Merger Control Guidelines Clarify Procedures and Information Required for Merger Filings in China
The new Guidelines detail what information is required from a notifying party in its submission to the Antitrust Investigation Office. Key procedural issues are also clarified.

China Banking Regulatory Commission, Report on Opening up China's Banking Industry to Foreign Investment [Legislation Digest]
中国银监会中国银行业对外开放报告
Foreign banks are encouraged to set up banks with legal personality.

General Office of Ministry of Commerce, Guiding Opinion on Attracting Foreign Investment Nationwide in 2007 [Legislation Digest]
商务部办公厅关于2007年全国吸收外商投资工作指导性意见
Foreign investment in real property restricted in 2007.

State Administration of Foreign Exchange, Circular on Issues Relevant to Foreign Exchange Control Involved in the Restructuring of Foreign-invested Banks [Legislation Digest]
国家外汇管理局关于外资银行改制所涉外汇管理有关问题的通知
SAFE sets forth procedures concerning foreign exchange matters in the restructuring of foreign-invested banks.

Ministry of Finance and State Administration of Taxation, Circular on Tax Issues Relevant to the Restructuring of Branches of Foreign Banks into Wholly Foreign-owned Banks [Legislation Digest]
财政部、国家税务总局关于外国银行分行改制为外商独资银行有关税收问题的通知
Tax issues clarified in the restructuring of foreign-invested banks.

Other Recent Legislation for this Month [Legislation Digest]

Ministry of Finance, General Provisions on Enterprise Finance (Revised) [Legislation Digest]
财政部企业财务通则 (修正)
After more than 10 years, the provisions on enterprise finance have been revised.

Ministry of Finance, Financial Rules for Financial Enterprises [Legislation Digest]
财政部金融企业财务规则
Financial rules for financial enterprises have been updated.

Foreign and domestic companies now under the same tax code

Paul Hastings, Janofsky&Walker

Jones Day

Simmons&Simmons

WilmerHale

DLA Piper

Freshfields Bruckhaus Deringer

Allen&Overy

O'Melveny&Myers

Gide Loyrette Nouel

Other Recent Legislation for this Month [Legislation Digest]

Bank Loan Frauds in the Real Estate Development Industry

China Banking Regulatory Commission, Implementing Rules for the PRC Regulations for the Administration of Foreign-invested Banks [Legislation Digest]
中国银行业监督管理委员会中华人民共和国外资银行管理条例实施细则
More detailed rules on the operation of renminbi business by foreign-invested banks.

Shortcomings in China's Corporate Governance Regime
Challenges ahead to bring PRC companies in compliance with internationally-accepted best practices.

China Banking Regulatory Commission, Implementing Measures for Matters Subject to Administrative Licensing of Chinese-invested Commercial Banks (Amended) [Legislation Digest]
中国银行业监督管理委员会中资商业银行行政许可事项实施办法(修订)
QFIIs no longer given preference as investors in Chinese banks.

New Regulatory Developments in China's Derivatives Markets
Regulatory authorities have responded with legislation on exchange forwards and swaps. Will the authorities liberalize constraints on the derivative markets to meet international market standards?

PRC Banking Regulation Law (Revised) [Legislation Digest]
中华人民共和国银行业监督管理法 (修正)
Banking regulatory authorities given more power.

China Banking Regulatory Commission, Circular on Further Strengthening Market Risk Management of Commercial Banks [Legislation Digest]
中国银行业监督管理委员会关于进一步加强商业银行市场风险管理工作的通知
Commercial banks asked to pay attention to market risk management.

NEW TAX LAW EXPECTED IN MARCH

Implementing Rules for the PRC Regulations for the Administration of Foreign-invested Banks [Full Text Translation]
中华人民共和国外资银行管理条例实施细则
Detailed procedures for the establishment and dissolution of foreign-invested banks, scope and operation of renminbi business, and professional qualification requirements of some senior personnel are provided.

People's Bank of China, Provisions for the Administration of Market Makers of the National Interbank Bond Market [Legislation Digest]
中国人民银行全国银行间债券市场做市商管理规定
Access requirements to the National Interbank Bond Market for market makers lowered.

People's Bank of China Notice [2007] No.3 [Legislation Digest]
中国人民银行公告〔2007〕第 3 号
Mainland financial institutions allowed to issue renminbi-denominated bonds in Hong Kong.

Other Recent Legislation for this Month [Legislation Digest]