On April 17, 2017, the China Securities Regulatory Commission (the “CSRC”) promulgated the Decision on Cancelling Administrative Approval for Futures Companies Incorporating, Acquiring and Partaking in Equity Participation of Overseas Institutions Engaging in Futures Businesses (the “Decision”) to thoroughly carry out the requirements under the Decision of the State Council on Partial Amendments to Administrative Laws and Regulations (State Council Directive No. 666).
The Decision states that after administrative approval is cancelled for futures companies incorporating, acquiring, or partaking in equity participation of an overseas company that engage in futures businesses, the CSRC will universally handle such matters through recordation. This Decision also applies to a futures company that changes the registered capital or equity of its overseas institutions engaging in futures business. The Decision requires that when a futures company is seeking to incorporate, acquire and partake in equity participation of an overseas institution engaging in futures business, or change the registered capital or equity of the overseas futures institution engaging in futures business, it shall file for recordation with the CSRC within five working days after the approval documents from the relevant overseas regulatory agencies are obtained. Meanwhile, the futures company shall also complete the relevant formalities for inbound and outbound foreign exchange funds pursuant to the requirements of the State Administration for Foreign Exchange.
According to the Decision, the CSRC will expect a futures company to timely submit information and important developments relating to the overseas institution engaging in futures business. The CSRC and its dispatched agencies will further enhance the supervision and administration over the relevant businesses of futures companies and increase the penalties for legal violations.