The People’s Bank of China, together with the Ministry of Commerce, the National Financial Regulatory Administration, the China Securities Regulatory Commission and the State Administration of Foreign Exchange, issued a set of pilot measures to promote “institutional opening” in the financial sector by aligning eligible free trade zones and free trade ports with international high-standard rules. The package sets out 20 measures across six areas and will be trialled in designated pilot areas including the Shanghai, Guangdong, Tianjin, Fujian and Beijing free trade zones and the Hainan Free Trade Port, as well as specified cooperation platforms tasked with opening-up missions. Key measures include applying national treatment so that foreign-funded financial institutions in pilot areas can offer the same types of “new financial services” as domestic institutions, where such services are already provided and regulated overseas, subject to exclusions tied to national security or financial safety. Authorities commit to deciding on complete, legally compliant applications to provide relevant services within 120 days, and shorten approval timelines from 180 days to 120 days for establishing securities and futures firms (including securities subsidiaries), public fund managers and futures companies, as well as for establishing foreign bank operating institutions and foreign insurance institutions in the pilot areas. The measures also support lawful cross-border purchase of certain overseas financial services and related settlements, expand and optimise the Guangdong-Hong Kong-Macao Greater Bay Area “Cross-border Wealth Management Connect” pilot by widening participating institutions and eligible products, and explore a Macau financial services zone in Hengqin’s “Macau New Neighbourhood”. For foreign investors, the framework provides for free and non-delayed remittance in and out of pilot areas for a broad set of investment-related transfers (including capital contributions, profits and dividends, interest, capital gains, royalties and other fees, sale or liquidation proceeds, contract-based payments, compensation and dispute-resolution proceeds), alongside steps to extend trade and investment facilitation coverage and develop multi-functional free trade account systems in Hainan and Hengqin. It further sets out arrangements for cross-border financial data flows, including exploring a “white list” mechanism and clarifying rules for exporting operational data, developing data classification standards and important data catalogues, and supporting work on internationally advanced e-payment standards and cross-border digital identity, while prohibiting regulators from requiring source-code transfer for mass-market financial software outside financial critical information infrastructure. The package also calls for stronger cross-departmental supervision, enhanced monitoring of major and cross-border risks, tougher enforcement against illegal financial activities, improved emergency response, and mechanisms for cross-border dispute resolution including international arbitration and mediation. The People’s Bank of China will coordinate with relevant departments to implement the measures in the pilot areas, with local authorities tasked with effectiveness evaluation and with experience to be summarised for replication and wider rollout. Measures involving market access and preferential treatment for Hong Kong and Macao services and providers will be implemented under the CEPA framework.

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