The Interim Management Measures for Overseas Traders and Brokers Engaging in Futures Trading under Specific Domestic Categories (China Securities Regulatory Commission Order No. 116, "Measures") were recently promulgated, allowing overseas traders and brokers to engage in futures trading under specific domestic categories and determining crude oil futures as the first specific domestic category in China. To support the implementation of the Measures, the State Administration of Foreign Exchange (SAFE) recently published the Circular of the State Administration of Foreign Exchange on Foreign Exchange Administration for Overseas Traders and Brokers Engaging in Futures Trading under Specific Domestic Categories (HuifaNo. 35 [2015], "Circular"), clarifying the foreign exchange administration policy for overseas investors engaging in domestic commodity futures trading, and simplifying requirements on account opening, exchanges of funds and data reporting, which are involved in such trading, so as to facilitate market operations.

The Circular is highlighted as follows:First, clarifying the requirements on managing foreign exchange accounts of trading entities, highlighting that special accounts shall be opened for closed operation of funds, so as to reduce trading risk. Second, specifying that the funds for futures trading by an overseas investor shall not be included in the quota for short-term external debt of a bank, in order to facilitate use of relevant funds. Third, to facilitate exchanges of funds, overseas investors are allowed to purchase and settle foreign exchange directly with their opening banks based on the real demands such as futures margin, and settlement of profits and losses, and funds can be transferred directly after the purchase and settlement of foreign exchange. Fourth, simplifying data reporting. The data on foreign-related receipts and payments involved in futures trading and related trading data shall be uniformly reported by the opening banks and exchanges through their systems.

The Circular shall come into force as of August 1.