5 June, 2012

Legal News & Analysis – Asia Pacific – China – Regulatory & Compliance

On May 2, 2012, the National Development and Reform Commission ("NDRC") issued the Notice on Relevant Matters Concerning the Issuance of Renminbi Bonds in the Hong Kong Special Administrative Region by Domestic Non-financial Institutions, which took effect immediately. The notice requires domestically registered non-financial institutions with a legal person status to apply with NDRC for approval before issuing RMB bonds in Hong Kong. Upon acceptance of the application, NDRC will decide whether or not to grant approval within 60 working days. The approval document, if granted, will be valid for a year and the issuer must complete its bond issuance within the period of validity. Capital raised from the bond issuance must be used for approved purposes. Within 10 working days after completion of the bond issuance, the issuer must report to NDRC the result of issuance in writing. The NDRC also requires non-financial institutions to make a filing, if they provide guarantee to their overseas branches for the issuance of RMB bonds in Hong Kong.