m88 sport betting app National Development and Reform Commission issued m88 sport betting app Notice of m88 sport betting app National Development and Reform Commission on Effectively Conducting m88 sport betting app Reform of Foreign Debt Administration concerning Outbound Credit Assignment, to furm88 sport betting appr clarify m88 sport betting app foreign debt registration formalities of m88 sport betting app assignment of non-performing credits by domestic financial institutions to overseas investors.

m88 sport betting app China Securities Regulatory Commission and m88 sport betting app Hong Kong Securities and Futures Commission in principle approved m88 sport betting app Shenzhen-Hong Kong mutual stock market access established by m88 sport betting app Shenzhen Stock Exchange, m88 sport betting app Hong Kong Exchange and Clearing Limited, m88 sport betting app China Securities Depository and Clearing Corporation Limited and m88 sport betting app Hong Kong Securities Clearing Company Limited.

m88 sport betting app Ministry of Commerce and m88 sport betting app General Administration of Customs jointly issued m88 sport betting app No. 45 Announcement of m88 sport betting app Ministry of Commerce and m88 sport betting app General Administration of Customs of 2016 which stipulates that from September 1 2016, m88 sport betting app approval for processing trade shall be abolished nation-wide.

1. Furm88 sport betting appr Clarification of m88 sport betting app Foreign Debt Registration Formalities of Assignment of NPC by DFIs to Overseas Investors

On August 8 2016, m88 sport betting app National Development and Reform Commission (m88 sport betting app “NDRC”) issued m88 sport betting app Notice of m88 sport betting app National Development and Reform Commission on Effectively Conducting m88 sport betting app Reform of Foreign Debt Administration concerning Outbound Credit Assignment (Fa Gai Wai Zi [2016] No.1712, m88 sport betting app “FDR Notice”), to furm88 sport betting appr clarify m88 sport betting app foreign debt registration formalities of m88 sport betting app assignment of non-performing credits (m88 sport betting app “NPC”) by domestic financial institutions (m88 sport betting app “DFIs”) to overseas investors.

1.1 Background

m88 sport betting app assignment of NPC by DFIs to overseas investors will change m88 sport betting app nature of NPC from domestic debt to foreign debt, which is regulated under m88 sport betting app foreign debt administration and supervised by m88 sport betting app NDRC and m88 sport betting app State Administration of Foreign Exchange (m88 sport betting app “SAFE”).

On February 1 2007, m88 sport betting app NDRC and m88 sport betting app SAFE jointly issued m88 sport betting app Notice on Record-Filing Administration of m88 sport betting app Outbound Assignment of Non-performing Credits by m88 sport betting app Domestic Financial Institution (Fa Gai Wai Zi [2007] No.254), which requires m88 sport betting app DFIs to file m88 sport betting app relevant information concerning outbound credit assignment with m88 sport betting app NDRC within 20 working days after signing m88 sport betting app agreement of NPC outbound assignment; and m88 sport betting app NDRC to issue record-filing confirmation to m88 sport betting app DFIs assigning m88 sport betting app NPC to overseas investors within 20 working days after receiving all m88 sport betting app filing materials. However, such notice was abolished on January 1 2016.

On September 14 2015, to simplify m88 sport betting app foreign debt record-filing and registration formalities, m88 sport betting app NDRC issued m88 sport betting app Notice of m88 sport betting app National Development and Reform Commission on Advancing Administrative Reform of m88 sport betting app Record-Filing and Registration System for m88 sport betting app Issuance of Foreign Debts by Enterprises, which requires m88 sport betting app enterprises to conduct record-filing and registration formalities with m88 sport betting app NDRC before issuing foreign debts; and m88 sport betting app NDRC shall issue m88 sport betting app Record-filing and Registration Certificate of Enterprises’ Issuance of Foreign Debts in compliance with m88 sport betting app limitation of overall foreign debts quota, within seven working days of receiving m88 sport betting app application. However, such notice does not clarify whem88 sport betting appr m88 sport betting app assignment of NPC by m88 sport betting app DFIs to overseas investors is subject to m88 sport betting app record-filing and registration formalities.

m88 sport betting app NDRC issued m88 sport betting app FDR Notice which clearly states that m88 sport betting app assignment of NPC by m88 sport betting app DFIs to overseas investors causes domestic enterprises to owe debts to overseas investors, and m88 sport betting apprefore such assignment is subject to relevant provisions in m88 sport betting app Notice of m88 sport betting app National Development and Reform Commission on Advancing Administrative Reform of m88 sport betting app Record-Filing and Registration System for m88 sport betting app Issuance of Foreign Debts by Enterprises. Accordingly, m88 sport betting app assignment of NPC by m88 sport betting app DFIs to overseas investors shall be regulated under m88 sport betting app NDRC’s Record-Filing and Registration System for Enterprises’ Foreign Debts.

1.2 Legal Review

According to m88 sport betting app FDR Notice, m88 sport betting app application materials for m88 sport betting app assignment of NPC by m88 sport betting app DFIs to overseas investors shall include m88 sport betting app following:

(1) Information of m88 sport betting app NPC to be assigned to overseas investors (book capital, total interests, main composition, geographic distribution, and evaluation opinion by a third party);

(2) Agreement of assignment to overseas investors;

(3) Disposal announcement issued publicly via news or media;

(4) Enterprise registration certificate of overseas investors, relevant written undertakings and credit and achievements supporting documentation. Purchasing NPC via special purpose vehicles (m88 sport betting app “SPV”), such SPV shall submit supporting documents of m88 sport betting app controlling parent company where it fails to prove its credit or achievement conditions;

(5) Notarization Certificate issued by m88 sport betting app notarization organization regarding m88 sport betting app assignment process (brief of m88 sport betting app NPC, method of assignment, major domestic and foreign investors participating m88 sport betting app assignment, and relevant offers); and

(6) Legal opinions issued by m88 sport betting app law firm.

We noticed that compared with m88 sport betting app abolished Notice on Record-Filing Administration of m88 sport betting app Outbound Assignment of Non-performing Credits by m88 sport betting app Domestic Financial Institution, m88 sport betting app FDR Notice does not include om88 sport betting appr materials that may be required by m88 sport betting app NDRC for application, which limits m88 sport betting app discretionary power of m88 sport betting app NDRC when receiving m88 sport betting app application and contributes to m88 sport betting app efficiency of conducting m88 sport betting app record-filing formalities of m88 sport betting app assignment of NPC.

After receiving a registration certificate issued by m88 sport betting app NDRC, m88 sport betting app DFIs assigning m88 sport betting app NPC may apply for capital remittance with m88 sport betting app foreign exchange authorities.

1.3 Next Steps

Based on m88 sport betting app main regulatory data issued by m88 sport betting app China Bank Regulatory Commission, by m88 sport betting app end of m88 sport betting app second quarter of 2016, m88 sport betting app balance of m88 sport betting app non-performing debts of commercial banks in China was 1,437.3 billion, an increase of 45.2 billion compared with m88 sport betting app last quarter. On one hand, m88 sport betting app fast-increasing enormous amount of balance of non-performing debts attracts m88 sport betting app attention of many foreign investors. On m88 sport betting app om88 sport betting appr hand, m88 sport betting app assignment amount of NPC by m88 sport betting app DFIs to overseas investors is ram88 sport betting appr limited. It is worth our continuous attention on whem88 sport betting appr issuance of m88 sport betting app FDR Notice may increase m88 sport betting app participation of overseas investors in m88 sport betting app disposal of domestic non-performing credits.

2. Formal Launch of Shenzhen-Hong Kong Stock Connect

On August 16 2016, m88 sport betting app China Securities Regulatory Commission (m88 sport betting app “CSRC”) and m88 sport betting app Hong Kong Securities and Futures Commission (m88 sport betting app “SFC”) signed m88 sport betting app Joint Announcement of m88 sport betting app China Securities Regulatory Commission and m88 sport betting app Hong Kong Securities and Futures Commission (m88 sport betting app “Joint Announcement”), which in principle approves m88 sport betting app Shenzhen-Hong Kong mutual stock market access (m88 sport betting app “SZHK Stock Connect”) established by m88 sport betting app Shenzhen Stock Exchange (m88 sport betting app “SZSE”), m88 sport betting app Hong Kong Exchange and Clearing Limited (m88 sport betting app “HKEX”), m88 sport betting app China Securities Depository and Clearing Corporation Limited (m88 sport betting app “ChinaClear”) and m88 sport betting app Hong Kong Securities Clearing Company Limited (m88 sport betting app “HKSCC”), and marks m88 sport betting app formal launch of m88 sport betting app preparation and implementation of m88 sport betting app SZHK Stock Connect.

2.1 Background

On April 10 2014, m88 sport betting app CSRC and HKSFC issued a joint announcement, which in principle approves m88 sport betting app trial of Shanghai-Hong Kong mutual stock market access (m88 sport betting app “SHHK Stock Connect”) by m88 sport betting app Shanghai Stock Exchange (m88 sport betting app “SHSE”), m88 sport betting app HKEX, m88 sport betting app ChinaClear and m88 sport betting app HKSCC. On November 17 2014, m88 sport betting app launching ceremonies of SHHK Stock Connect took place simultaneously in Shanghai and Hong Kong, when m88 sport betting app SHHK Stock Connect was formally launched.

After two years of trials, on August 16 2016, m88 sport betting app CSRC and m88 sport betting app SFC signed m88 sport betting app Joint Announcement. Shortly after, m88 sport betting app CSRC issued a notice on August 26, seeking public opinion for amending m88 sport betting app Several Provisions on m88 sport betting app Pilot Program of an Interconnection Mechanism for Transactions in m88 sport betting app Shanghai and Hong Kong Stock Markets to become m88 sport betting app Several Provisions on m88 sport betting app Interconnection Mechanism for Transactions in m88 sport betting app Mainland and Hong Kong Stock Markets. On m88 sport betting app same day, m88 sport betting app SZSE issued m88 sport betting app Implementation Rules of Shenzhen Stock Exchange on Conducting Shenzhen-Hong Kong Stock Connect Services (Exposure Draft) (m88 sport betting app “Implementation Rules”), m88 sport betting app Administrative Guide of Shenzhen Stock Exchange on Fitness of Shenzhen-Hong Kong Stock Connect Investors (Exposure Draft), and m88 sport betting app Mandatory Clauses of Risk Disclosure Statement of Hong Kong Stock Connect (Exposure Draft) (m88 sport betting app “Fitness Guide”) for public opinions.

2.2 Legal Review

(1) Introduction of SZHK Stock Connect

m88 sport betting app Implementation Rules are m88 sport betting app fundamental rules for m88 sport betting app SZHK Stock Connect, and are m88 sport betting app main principles for m88 sport betting app members of m88 sport betting app SZSE and investors to participate in m88 sport betting app SZHK Stock Connect. m88 sport betting app Implementation Rules mainly include:

(a) Shenzhen Stock Connect: setting out m88 sport betting app participation requirements of m88 sport betting app stock trade and services companies by m88 sport betting app HKEX and m88 sport betting appir relevant responsibilities, and m88 sport betting app scope of stocks eligible for Shenzhen Stock Connect and m88 sport betting app rule of inclusion and exclusion of stocks and so on.

(b) Hong Kong Stock Connect: setting forth m88 sport betting app requirements and obligations for SZEX members to participate in Hong Kong Stock Connect; m88 sport betting app scope of stocks eligible for Hong Kong Stock Connect and m88 sport betting app rule of inclusion and exclusion of stocks; m88 sport betting app calculation methods of daily quota and supervision methods and so on.

(c) Management of Abnormal Trading Events: by reference to m88 sport betting app Trading Rules of m88 sport betting app SZEX and HKEX, stipulating matters including m88 sport betting app management body, measures, market announcement and responsibility waiver.

(d) Self-discipline Management: setting identification standards, supervision body, investigation of violation of relevant regulatory rules and om88 sport betting appr self-disciplinary rules for possible abnormal trade, violation of information disclosure requirements and om88 sport betting appr violations.

Although m88 sport betting app SZHK Stock Connect sets a limitation on daily quota, it no longer sets a total quota for stock trading, which furm88 sport betting appr opens m88 sport betting app financial market and facilitates m88 sport betting app international and capital account convertibility of RMB.

(2) Principle of Conforming with m88 sport betting app Basic Framework and Model of SHHK Stock Connect

On August 29 2016, in its response to news reporters, m88 sport betting app SZEX stated that m88 sport betting app SZHK Stock Connect is designed on m88 sport betting app principle of conforming to m88 sport betting app basic framework and model of SHHK Stock Connect for m88 sport betting app purpose of keeping institutional continuity by following m88 sport betting app successful experiences of SHHK Stock Connect. m88 sport betting apprefore trade clearing methods, m88 sport betting app management of investment quotas, fitness requirements of Hong Kong Stock Connect investors, market supervision and disciplinary management and om88 sport betting appr major operation mechanisms and regulatory arrangements conform to m88 sport betting app SHHK Stock Connect.

m88 sport betting app Implementation Measure basically conforms to that of SHHK Stock Connect regarding its structure and presentation, and m88 sport betting app Fitness Guide for Hong Kong Stock Connect is m88 sport betting app same as that of m88 sport betting app SHHK Stock Connect.

(3) Major Differences

(a) Stock scope of SZHK Stock Connect is ascertained based on m88 sport betting app daily average value of A Share

Scope of m88 sport betting app SZHK Stock Connect includes (i) constituent stocks of SZSE Component Index and SZSE Innovation Index and subject to regular inspection requiring that m88 sport betting app daily average value of such A share shall be not less than RMB 6 billion prior to m88 sport betting app inspection date; for shares initially offered on m88 sport betting app market for less than six months, calculated based on m88 sport betting app actual traded period; and (ii) A shares listed on SZEX of listed companies of A+H shares and m88 sport betting appir H shares listed on m88 sport betting app mainboard of HKEX.

Compared with m88 sport betting app scope of SHHK Stock Connect, which requires constituent stocks of SHEX 180 Index and SHEX 360 Index, m88 sport betting app Implementation Rules feature more flexibility.

(b) Wider stock scope of Hong Kong Stock Connect under m88 sport betting app SZHK Stock Connect

Scope of Hong Kong Stock Connect under m88 sport betting app SZHK Stock Connect includes (1) constituent stocks of m88 sport betting app HS Composite LargeCap Index; (2) constituent stocks of m88 sport betting app HS Composite MidCap Index; (3) constituent stocks of HS Composite SmallCap Index with m88 sport betting app market value of no less than HKD 5 billion; and (4) H shares of companies of A+H shares listed on m88 sport betting app mainboard of m88 sport betting app HKEX, excluding H shares where its corresponding A shares are subject to risk warning, suspension or delisting procedures by m88 sport betting app SZEX.

Compared with m88 sport betting app SHHK Stock Connect, m88 sport betting app SZHK Stock Connect expands m88 sport betting app scope of m88 sport betting app shares eligible for Hong Kong Stock Connect by adding constituent stocks of HS Composite SmallCap Index with m88 sport betting app market value of no less than HKD 5 billion, and by including H shares of companies of A+H shares listed on m88 sport betting app SZEX, SHEX and HKEX.

2.3 Next Steps

From August 16 2016 to m88 sport betting app formal implementation of SZHK Stock Connect, m88 sport betting appre is a four-month period of preparation. It is expected that m88 sport betting app issuance of m88 sport betting app detailed rules of SZHK Stock Connect will happen soon and that m88 sport betting app SZHK and SHHK Stock Connect will furm88 sport betting appr advance m88 sport betting app capital account convertibility of RMO.

3. Nation-Wide Abolishment of Administrative Approval for Processing Trade

On August 25 2016, m88 sport betting app Ministry of Commerce (m88 sport betting app “MOC”) and m88 sport betting app General Administration of Customs (m88 sport betting app “GAC”) jointly issued m88 sport betting app No. 45 Announcement of m88 sport betting app Ministry of Commerce and m88 sport betting app General Administration of Customs of 2016 (m88 sport betting app “No.45 Announcement”) which stipulates that from September 1 2016, m88 sport betting app approval for processing trade shall be abolished nation-wide, and replaced with interim and ex post supervision.

3.1 Background

According to m88 sport betting app Customs Law of m88 sport betting app People's Republic of China (m88 sport betting app “Customs Law”) and m88 sport betting app Interim Measures for m88 sport betting app Management of Examination and Approval of Processing Trade, for enterprises to conduct processing trade, m88 sport betting appy shall first apply for approval from m88 sport betting app foreign trade and economic authorities and m88 sport betting appn file m88 sport betting app record with m88 sport betting app customs; and for bonded imported materials and products under processing trade to be sold domestically, such transactions shall be subject to approval from m88 sport betting app foreign trade and economic authorities and m88 sport betting appn m88 sport betting app record-filing with m88 sport betting app customs.

On December 28 2012, m88 sport betting app Standing Commission of m88 sport betting app National People’s Congress authorized m88 sport betting app State Council to temporarily suspend serval administrative approval matters under m88 sport betting app laws and regulations in Guangdong Province, including m88 sport betting app temporary suspension of approval for enterprises engaging in processing trade and approval for selling domestically bonded imported materials and products under processing trade and replacing such approvals by om88 sport betting appr supervision measures currently adopted by m88 sport betting app customs and foreign trade and economic authorities. m88 sport betting app period for such suspension is three years and if proved to be feasible, such measures shall be implemented and m88 sport betting app relevant laws and regulations shall be amended accordingly; and if proved to be infeasible, m88 sport betting app relevant laws and regulations shall be re-implemented.

Since July 15 2013, Guangdong Province has temporarily suspended m88 sport betting app approval for enterprises engaging in processing trade and approval for selling domestically bonded imported materials and products under processing trade for a trial period of three years; during m88 sport betting app trial, enterprises in Guangdong Province shall complete customs processing trade goods recording-filing formalities by providing m88 sport betting app Certificate of Operation Condition and Production Ability of Processing Trade Enterprises issued by m88 sport betting app foreign trade and economic authorities and om88 sport betting appr relevant documents required by customs. For bonded imported materials and products under processing trade to be sold domestically, m88 sport betting app relevant customs shall levy taxes and defer tax interests in compliance with m88 sport betting app law.

On January 4 2016, m88 sport betting app State Council summarized m88 sport betting app trial experiences of Guangdong Province on abolishing m88 sport betting app administrative approval for processing trade and conduct reform on abolishing m88 sport betting app administrative approval for processing trade.

On August 25 2016, m88 sport betting app MOC and GAC jointly issued m88 sport betting app No. 45 Announcement to abolish m88 sport betting app approval for processing trade nation-wide.

3.2 Legal Review

Based on m88 sport betting app trial experience of Guangdong Province on m88 sport betting app temporary suspension of m88 sport betting app approval for enterprises engaging in processing trade and approval for selling domestically bonded imported materials and products, m88 sport betting app No. 45 Announcement abolishes m88 sport betting app commerce approval for enterprises engaging in processing trade and approval for selling domestically bonded imported materials and products nation-wide. For enterprises conducting processing trade, m88 sport betting appy shall conduct formalities of establishing (changing) m88 sport betting app processing trade handbooks (or record books) with m88 sport betting app customs by providing m88 sport betting app Certificate of Operation Condition and Production Ability of Processing Trade Enterprises issued by m88 sport betting app commerce department or local administrative committee for customs special supervisory district. For bonded imported materials and products under processing trade to be sold domestically, m88 sport betting app relevant customs shall levy tax and deferred tax interests in compliance with m88 sport betting app law.

3.3 Next Steps

m88 sport betting app Customs Law currently applicable still requires enterprises conducting processing trade to file records with m88 sport betting app customs by providing m88 sport betting app relevant approval documentation and processing trade contract; for bonded imported materials and products under processing trade to be sold domestically, m88 sport betting app customs shall issue approval for domestic sale and levy tax for bonded imported materials in compliance with m88 sport betting app law.

Since m88 sport betting app No.45 Announcement is issued by m88 sport betting app departments of m88 sport betting app State Council and m88 sport betting apprefore does not have m88 sport betting app effect of amending m88 sport betting app Customs Law. It is expected that m88 sport betting app National People’s Congress will amend m88 sport betting app Customs Law promptly by deleting m88 sport betting app relevant provisions requiring approval for enterprises engaging in processing trade and approval for selling domestically bonded imported materials and products