To boost orderly development of the domestic and foreign currency exchange franchise businesses for individuals in compliance with regulations, the State Administration of Foreign Exchange (SAFE) has recently revised and issued the Measures for Administration of the Pilot Program on Domestic and Foreign Currency Exchange Franchise Businesses for Individuals (Huifa No. 6 [2020], "Measures"). While ensuring the permitted scope of domestic and foreign currency exchange franchise businesses for individuals and the administration principles of foreign exchange settlement and sales for individuals remain unchanged, the Measures is designed to refine relevant administration policies and facilitate domestic and foreign currency exchange by individuals.

The highlights of the Measures are as follows: first, streamlining administrative approval. The approval for the qualification of franchise businesses for nationwide operations will be delegated to SAFE branches with whom they have registered. Approval for opening a foreign exchange reserve account by franchise institutions and for preparation for market access of their branches/sub-branches will be canceled. Market access-related supporting materials like business license and no-action letter will no longer be required. Second, optimizing processes. Franchise institutions will be allowed to start electronic exchange business for individuals, sales and redemption of electronic travelers' cheques, and handle changes of business address after prior reporting. Third, driving business innovation. Franchise institutions will be allowed to accept non-cash RMB funds paid by domestic individual customers in their names in exchange for foreign currency. Fourth, improving market entry and exit mechanisms. Market access requirements such as volume standards, technical conditions, credit of businesses and managers will be properly optimized. Fifth, tightening ongoing and ex-post regulation. Franchise institutions will be required to build effective risk control systems and intensify authenticity and compliance reviews.

The Measures will come into force as of the date of issuance.