Original title: 12 steps to support financial innovation in the Free Trade Zone Focus on promoting the use of cross-border RMB
The Beijing News (Reporter Gu Zhijuan) On November 23, the State Council issued "Notification of Supporting Steps for Deepening Reform and Innovation in the Free Trade Pilot Zone" (hereinafter referred to as "Notification"), from creating a good investment environment and increase the level of trade facilitation. Promote financial innovation to serve the real economy, advance the field of human resources, and try to improve the reform and innovation of free trade pilot zones.
Among the notifications above, there are 12 steps involving financial innovation, which include insurance, banking, securities, funds and other industries, especially to promote trade facilitation and provide financial support for reform of the Pilot Free Trade Zone.
A number of steps to expand the scope of cross-border use of RMB in the Free Trade Zone
The notice proposes a number of steps to support the development of business across the RMB across the Free Trade Zone, including enabling banking financial institutions in the Pilot Free Trade Zone to handle RMB derivative products for overseas institutions, supporting bank methods that qualify for RMB and foreign exchange. Derivative business, or submitting a partnership with a banking financial institution that meets the requirements for foreign exchange settlement and foreign exchange sales business, supports the Pilot Free Trade Zone to run a cross-border RMB business based on an account system that conforms to its own characteristics, encourages and supports the Pilot Free Trade Zone Banking financial institutions issue RMB loans for foreign institutions and foreign projects based on real needs and prudential principles.
Wang Youxin, a researcher at the Bank of China International Finance Institute, told Beijing News that these steps are very important to promote the use of cross-border renminbi. There are many bright spots. Allowing bank methods that are eligible to implement the RMB and foreign exchange derivative business directly expands market participants, and does not provide the principle of real demand in the document, which means that the field of foreign exchange derivatives trading in the free trade zone is fully closed. This includes current projects and capital, as long as it is legally appropriate and risks can be controlled.
Previously, the handling of domestic banks in the RMB derivative business for foreign institutions was liberalized in the Shanghai Free Trade Zone. In December 2015, the Shanghai Foreign Exchange Branch Administration announced that it would enable banks in the Shanghai Free Trade Zone to handle RMB derivative transactions and foreign exchange for foreign institutions. "Notification" is equivalent to extending this business to all 12 existing free trade pilot zones.
Financial institutions at the Free Trade Zone have issued RMB loans abroad. In the past, only a few pilots were able to run this business, Wang Youxin said that the steps introduced this time would make the RMB two-way circulation more perfect and help promote the RMB in "going". Go out to be used in large corporate and offshore projects.
Support for a free trade pilot zone to run a business across the RMB boundary based on an account system that conforms to its own characteristics means giving more freedom to each free trade zone, allowing each trade zone to carry out business across the RMB boundary according to actual conditions, which conducive to stimulating business innovation, develop more market entities to use the renminbi.
In addition, the notice also proposes to promote the use of RMB in mass commodity trade between commodity exporting countries and "Belt and Road" countries in the trade of commodities such as oil products, and guiding banking financial institutions according to "who imports and who pay foreign exchange ". The principle is to handle the payment business across the trade boundaries of oil products, and support the supply of taxable fuel oil in the Pilot Free Trade Zone for denomination and settlement within the RMB. This article only applies to the Zhejiang Free Trade Zone.
Wang Youxin proposed that the aim of this step was to actively promote the function of the RMB commodity price power. On the one hand, the use of renminbi-denominated settlement in trading bulk commodities such as oil is to promote the strength of the renminbi price in traditional fields, on the other hand, support for free trade zones bound by oil fuel at renminbi-denominated settlement is also actively developing in the regions developing area. Strength of the price of RMB.
The central bank will actively expand the opening of the financial industry in the development of free trade zones
Xu Zhong, director of the People's Bank of China Research Bureau, said at the direction of the State Council policy on November 23 that since the establishment of the Free Trade Zone, the cross-border RMB business had grown rapidly and the level of investment and cross-border financing continued to increase. The People's Bank of China gave full play to the role of the "test field" in the reform and innovation of the Free Trade Zone, promoting trade and investment facilitation as a starting point, adhering to the priority principles of local currencies, and further simplifying the business process of cross-border investment under-investment regular and direct. Companies and individuals in the region use local currencies for cross-border transactions, which reduce exchange costs and reduce exchange rate risk.
In addition, the innovative financial service approach to the free trade zone continues to increase the level of financial services. In addition to the Shanghai Pilot Free Trade Zone, other free trade pilot zones have also adapted to local conditions to carry out various financial innovations. For example, the Guangdong Free Trade Zone launches an electronic license bank card to increase the level of comfort of registration and operations of companies in the region. The Tianjin Pilot Free Trade Zone supports the willingness of leasing companies to settle foreign debt through special financial support policies for the development of the rental industry. The Fujian Free Trade Zone has innovated services in the completion of the seafood trade fund and warehouse receipt financing, and is actively involved in the development of the core area of the Maritime Silk Road.
Since China announced a roadmap for the expansion of the financial industry in April this year, the opening steps of the financial industry continued to decline, including the abolition of foreign investment in Chinese financial institutions, expansion of the business scope of foreign financial institutions, and exchange promotions. Wait
Xu Zhong said that the People's Bank of China always adheres to three principles to open internal and external financial expansion: First, national treatment and negative list before entering, secondly, the opening of the financial industry will be coordinated with the mechanism of exchange rate formation and the capital account convertibility process. Third, when opening, we must pay attention to prevent financial risk, and we must match the ability of financial supervision with financial openness.
In the next step, the People's Bank of China will actively expand the opening of the financial industry in the construction of the Pilot Free Trade Zone, encouraging the Pilot Free Trade Zone to lead and give priority to steps to open the financial industry. The People's Bank of China will gradually shorten the negative list in the financial sector, easing restrictions on share ownership of foreign financial institutions in all fields involving financial licenses, substantially expanding the business scope of foreign financial institutions, and replacing restrictions on access and qualifications with prudential requirements to stimulate foreign finance. Institutions participate in the enthusiasm of China's financial markets and promote more free flow of funds.
The Tianjin Free Trade Zone promotes open innovation in the financial sector.
Support individuals in the Free Trade Zone to invest in securities abroad, and the US stock market will facilitate
Notifications also propose to support individuals who qualify in the Pilot Free Trade Zone to invest in foreign securities in accordance with regulations.
According to the relevant announcement from the China Securities Regulatory Commission, in addition to the Qualified Domestic Institutional Investors (QDII), the "Shanghai-Hong Kong Stock Connect" and "Shenzhen-Hong Kong Stock Connect" mechanisms, the CSRC has not approved domestic or foreign institutions to provide domestic investors with participation in foreign securities transactions. Service business. Domestic investors who want to invest in foreign securities can invest in the foreign securities market by buying shares of QDII fund products and participating in the "Shanghai-Hong Kong Stock Connect" transaction.
Previously, domestic investors mostly opened accounts at foreign brokerage companies through domestic internet institutions, invested in US stocks, etc., but this model was warned by the Securities and Futures Commission in 2016. Authorities authorized to believe that platform or cellphone websites are from unapproved domestic internet company Client participation in overseas securities market transactions does not have a security audit and appropriate legal guarantees, and investment accounts and securities funds are abroad. After an investment dispute occurs, the rights and interests of investors will definitely suffer heavy losses and cannot be protected properly. Industry believes that with the application of the above notice, domestic investors will be more comfortable investing in foreign capital markets, and at the same time safer.
Beijing News reporter Gu Zhijuan Wang Quanhao Editor Zhao Ze Evidence Wu Xingfa