To facilitate domestic and foreign currency exchange franchised business for individuals and diversify domestic supply of foreign currency banknotes, the State Administration of Foreign Exchange (SAFE) has recently issued the Reply of the State Administration of Foreign Exchange to Franchised Institutions Providing Domestic and Foreign Currency Exchange for Individuals to Engage in Transport of Foreign Currency Banknotes into or out of the Territory and Foreign Currency Wholesale Business (Huifu No.169 [2015], hereinafter referred to as the “Reply“), approving TransForex (Tianjin) Currency Exchange Co., Ltd, Travelex Currency Exchange (China) Co., Ltd and Beijing United Money Exchange Co., Ltd ( “Three Franchised Institutions”) to engage in transport of foreign currency banknotes into or out of the territory and foreign currency wholesale business (“banknote transport and wholesale business”).

The Reply is highlighted as follows: I. specifying the scope of the banknote transport and wholesale business, and permitting the Three Franchised Institutions to determine in their sole discretion the currency for transport and which bank or franchised institutionacross the country for sales and purchases offoreign currency banknotes. II. requiring the Three Franchised Institutions to manage the operating and accounting of the banknote transport and wholesale businessand the retail businessseparately, and handle theclearing through special accounts for the banknote transport and wholesale business of a franchised institution. III. regulating other obligations of the Three Franchised Institutions, such as statistics and reporting, as well as anti-money laundering.