Criminal activities such as illegal payment and settlement business and FX trading have become increasingly rampant in recent years. Although these activities have been classified as business crimes in various laws and regulations, the applicable penalties have been unclear. However, new interpretations of the Supreme People's Court and the Supreme People's Procuratorate set out the applicable convictions and penalties for illegal business operations involving FX trading and payment and settlement business.
The State Administration of Foreign Exchange recently found 600 websites guilty of illegally providing foreign exchange (FX) margin trading services. The high yields associated with such high-risk investments have led many countries to introduce strict regulations. In China, the financial regulatory authorities have clarified that no legal institutions can conduct FX margin trading business and that those who break the law in order to engage in such business may incur administrative or criminal penalties.
The People's Bank of China and the Ministry of Finance recently issued the Interim Measures for the Administration of Bond Issuance by Overseas Institutions in the National Inter-bank Bond Market. Among other things, the new measures further clarify the qualification, application procedure, bond issuance, registration, custody and settlement and information disclosure requirements for overseas institutions that issue so-called 'panda bonds'.
The People's Bank of China recently issued a notice to strengthen the provision of cross-border financial network and information services. The notice includes a number of compliance requirements concerning the provision and use of such services, including with regard to overseas providers, domestic users and industry self-discipline.