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Clifford Chance

Clifford Chance

Briefings

Clifford Chance Client Briefing:Offshore financing in Shanghai Free Trade Zone liberalized

3 April 2015

In order to liberalize control over capital account transactions and implement further financial deregulation in the Shanghai (China) Pilot Free Trade Zone (Shanghai FTZ), the Shanghai Head Office of the People's Bank of China (Shanghai PBoC) has, on 12 February 2015, issued the Trial Implementation Rules on the Macroscopic Prudent Management of Account-Based Settlement Business for Offshore Financing and Cross-Border Capital Flow in the China (Shanghai)Pilot (Shanghai) Free Trade Zone. These measures became effective on the same day, and have laid the foundation for a new legal regime (New Regime) that greatly facilitates the conduct of offshore financing activities.
This briefing looks at the regulation of the New Regime from various aspects including participants, quota, procedures, commercial terms and account administration which together offer greater flexibility for the conduct of offshore financing. It marks an important phase of financial industry reform whereby entities have increasing freedom in determining the volume and structure of the financing, against a more streamlined administrative process. The expansion of the lending quota and the clarification of the account-based settlement system under the New Regime will also facilitate the convertibility of capital account items and enhance the development of financing activities in the Shanghai FTZ.
 

 

 

 

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