For the purpose of improving the internal operations and administration of foreign exchange funds of domestic enterprises, facilitating and supporting the utilization and operations of foreign exchange funds by domestic enterprises, and enhancing the efficiency of the utilization of foreign exchange funds, the SAFE released the Provisions on the Centralized Operations and Administration of Foreign Exchange Funds of Internal Members of Domestic Enterprises (hereinafter referred to as the Provisions). The Provisions will enter into effect as of November 1, 2009.
Based on the experience of the centralized operations and administration of foreign exchange funds of multinational companies since October 2004, the Provisions provide further reforms on the centralized operations and administration of foreign exchange funds of domestic enterprises, mainly in the following respects:
1) They further lower the admittance threshold for centralized operations of foreign exchange funds. In principle, foreign currency fund pool business can be carried out so long as the internal members of the domestic enterprises participating in the business and the banks (finance companies) providing the funds for the pooled services reach agreement and comply with the legal framework for entrusted loans.
2) They clarify the administrative policy for the foreign currency fund pool business in China, and further regulate relevant issues concerning the foreign currency fund pool business of domestic enterprises, such as operational methods, fundamental principles,  approval procedures, and so forth.
3) They delegate power of examining and approving to the AFE branches. The foreign currency fund pool business by domestic enterprises, the business of spot purchases and sales of foreign exchange by finance companies, and related examinations and verifications of exchange transfers all fall under the jurisdiction of the AFE branches.
4) They specify and improve the laws and regulations concerning the centralized operations and administration of foreign exchange funds. The Circular of the SAFE Concerning the Relevant Issues Regarding the Business of Spot Purchases and Sales of Foreign Exchange Conducted by Finance Companies of Enterprise Groups (Huifa [2008], No. 68) is improved upon and incorporated into the framework of the Provisions, thus further promoting the putting in order and amending of the laws and regulations on foreign exchange administration.
Implementation of the Provisions will further improve and normalize the centralized operations and administration of foreign exchange funds, thus conforming to the trend of institutional reform of financial administration of foreign exchange and the current state of economic development. Especially in the context of the current international financial crisis, it will facilitate improvements in the efficiency of utilization of funds by domestic enterprises, reducing costs and enhancing competitiveness. Meanwhile, it is conducive to promoting cooperation between banks and enterprises as well as to business innovation, thus accelerating linkages between Chinas financial services industry and international operations.