Several Provisions of Shanghai Municipality on Promoting the Development of Free Trade Account Business in the China (Shanghai) Pilot Free Trade Zone in Pudong New Area

(Adopted at the 20th Session of the Standing Committee of the 16th Shanghai Municipal People's Congress on March 27, 2025)

Article 1 The Several Provisions of Shanghai Municipality on Promoting the Development of Free Trade Account Business in the China (Shanghai) Pilot Free Trade Zone in the Pudong New Area (these "Provisions") are formulated to enhance the functionality of the Free Trade Account ("FTA") system, promote the development of FTA business, better serve the real economy, and achieve the lawful and orderly free flow of funds between the China (Shanghai) Pilot Free Trade Zone (including the Pudong New Area section of the Lin-gang Special Area, hereinafter the "Pilot Free Trade Zone") and overseas under controllable risks, in accordance with the fundamental principles of laws and administrative regulations, and in light of the actual circumstances of the Pudong New Area.

Article 2 These Provisions shall apply to FTA business and related facilitative and safeguard work carried out within the Pilot Free Trade Zone.

Article 3 This Municipality supports the financial regulatory departments of the State Council and their Shanghai-based offices in conducting coordinated regulation of domestic and foreign currencies, strengthening the day-to-day management of FTAs, guiding and promoting business innovation, and formulating and interpreting business rules related to FTAs in accordance with their respective responsibilities.

The Municipal local financial regulation authority and the people's government of the Pudong New Area (the "Pudong Government") shall cooperate with the offices of the financial regulatory departments of the State Council in Shanghai to promote the development of FTA business and provide support and safeguards for its development.

Article 4 The Municipal local financial regulation authority and the Pudong Government shall establish a coordination mechanism for FTA-related work, and cooperate with the offices of the financial regulatory departments of the State Council in Shanghai to guide financial institutions in conducting various FTA-based businesses in accordance with the division of responsibilities.

Article 5 This Municipality supports, under the premise of effective risk prevention, eligible business entities within the Pilot Free Trade Zone to conduct FTA-based business, explore cross-border capital flow and promote capital account convertibility, and achieve a high level of trade and investment liberalization and facilitation.

Article 6 This Municipality encourages foreign enterprises to open FTAs to conduct investment and financing activities. Banking institutions shall, in accordance with applicable provisions of the People's Bank of China and based on corporate needs, explore the provision of commercially sustainable and risk-controllable financial products or services.

Article 7 Banking institutions shall conduct customer identification and review the authenticity, completeness, and compliance of account opening documents in accordance with relevant laws, administrative regulations, and provisions of the People's Bank of China, and streamline the account opening procedures for FTAs.

Article 8 Banking institutions may expand the coverage of online banking and other digital services for cross-border receipts and payments, enhance business capabilities, and achieve digital handling of FTA business.

Article 9 Funds may be freely transferred between FTAs and overseas accounts, offshore accounts in China of foreign institutions, onshore accounts in China of foreign institutions, as well as between FTAs, in accordance with applicable provisions of the financial regulatory departments of the State Council.

Article 10 Banking institutions may, in accordance with relevant provisions of the financial regulatory departments of the State Council, provide convenient fund transfer services between FTAs opened by eligible enterprises in the Pilot Free Trade Zone and their other onshore RMB settlement accounts.

Article 11 Banking institutions may provide integrated financial services in RMB and foreign currencies through FTAs for centralized management of RMB and foreign currency and risk hedging within multinational corporate groups, centralized and netting collection and payment of current items within the groups and on the supply chain, and short-term financial management based on Free Trade Pilot Zone and overseas markets.

Article 12 When issuing non-resident merger and acquisition loans through their offices in the Lin-gang Special Area, banking institutions may, in accordance with the guidelines on non-resident merger and acquisition loans issued by the offices of the financial regulatory departments of the State Council in Shanghai, appropriately relax restrictions on loan ratios, repayment periods, and other conditions.

Article 13 Eligible enterprises engaged in bulk commodity production or cross-border trade shall entrust domestic futures companies recognized by the financial regulatory departments of the State Council and qualified to engage in overseas futures brokerage business to rely on FTAs to carry out cross-border hedging of spot import and export using cross-border RMB, unless otherwise provided by the State. Under the guidance of the financial regulatory departments of the State Council, the Pudong Government shall formulate relevant management measures for such enterprises.

Banking institutions may, under the premise of compliant management of funds for RMB futures and spot trading, provide cross-border RMB settlement services within specified limits for margin and futures earnings under hedging transactions carried out by enterprises through FTAs held by futures companies or their offices within the Pilot Free Trade Zone.

Article 14 Under the supervision and guidance of relevant departments of the State Council, banking institutions may provide suitable cross-border financial services through FTAs for eligible foreign individuals to directly invest in high-tech and strategic emerging industries in China.

When providing the above-mentioned cross-border financial services, banking institutions shall verify the authenticity of the business, record the use of funds, and prevent illegal and abnormal capital flows.

Article 15 Banking institutions may provide fund transfer services between FTAs opened by foreign individuals and their non-resident accounts, as well as convenient settlement services for payroll transfers, medical treatment, tourism, and other work and living expenses with resident accounts within the Pilot Free Trade Zone, and other services approved by relevant authorities.

Article 16 The Municipal local financial regulation authority shall, in collaboration with the Pudong Government, cooperate with the offices of the financial regulatory departments of the State Council in Shanghai to establish a fault-tolerant mechanism for FTA-related innovation to ensure reform and innovation, and implement a system of accountability exemption for due diligence.

Article 17 The Municipal local financial regulation authority and the Pudong Government shall cooperate with the offices of the financial regulatory departments of the State Council in Shanghai to supervise and manage the sub-accounting business of financial institutions under FTAs according to the authorization of the State Council to prevent cross-border capital flow risks.

Article 18 The Municipal local financial regulation authority and the Pudong Government shall cooperate with the offices of the financial regulatory departments of the State Council in Shanghai to conduct research on development planning for FTA business.

The Municipal local financial regulation authority and the Pudong Government shall cooperate with the financial regulatory department of the State Council in Shanghai shall also support relevant financial associations and industry organizations in carrying out FTA-related work.

The Municipal local financial regulation authority and the Pudong Government shall in collaboration with the financial regulatory department of the State Council in Shanghai, carry out FTA business training, publicity, and other activities.

Article 19 These Provisions shall be applied mutatis mutandis to the FTA business and related promotional and safeguard work carried out in the Lin-gang Special Area (outside the Pudong New Area).

Article 20 These Provisions shall take effect on May 1, 2025.