GC Agenda China
In the April edition of GC Agenda China (subscription required), Morrison & Foerster partner Paul McKenzie shared his opinions on the Regulations on the Administration of the Centralised Operation of the Cross-border Funds of Multinational Corporations, which was issued by the State Administration of Foreign Exchange (SAFE).
According to Mr. McKenzie: “Treasurers at MNCs ought to be pleased with this development. SAFE first launched a trial scheme in 2014, followed by the 2015 regulations, under which an MNC corporate group could cash-pool to make better use of the group's forex cash resources and forex debt quotas, among other things. The new regulations aim to streamline the operation of the SAFE cash pooling scheme in different respects, among other things by permitting multi-currency pooling. Previous SAFE schemes permitted pooling of forex only, with Renminbi pooling schemes separately overseen by the People's Bank of China. However, a number of issues still need to be addressed before MNCs can launch multi-currency arrangements as the regulations contemplate.”