In order to implement the spirit of the Third Plenary Session of the 18^th CPC Central Committee, further streamline administration and delegate power to lower levels, diversify market players, and promote the development of the foreign exchange market, the Circular of the State Administration of Foreign Exchange on Adjusting the Relevant Management Policies Regarding Entry into Inter-bank Foreign Exchange Market by Financial Institutions (Huifa No. 48 [2014], "the Circular”) was recently released by the State Administration of Foreign Exchange (SAFE).

The major contents of the Circular include: First, to promote the streamlining of administration and the delegation of power to lower levels, to cancel ex-ante approvals for financial institutions to enter the inter-bank foreign exchange market, and to give further play to the regulatory functions of market mechanisms. Second, to improve market supervision, to define the basic transaction rules for financial institutions in the inter-bank foreign exchange market, and to continue to facilitate the establishment of a new foreign exchange market management framework that focuses on both government supervision and market discipline. Third, to clean up and consolidate the laws and regulations, to repeal four foreign exchange management documents involving the entry of financial institutions into the inter-bank foreign exchange market, and to enhance the transparency of foreign exchange management policies.

This Circular shall take effect as of January 1, 2015.