Jurisdiction - China
SAFE Notice on Foreign Exchange Control over Equity Incentive Plans.

31 March, 2012



On February 15, 2012, the State Administration of Foreign Exchange ("SAFE") issued the Notice on Relevant Issues Concerning Foreign Exchange Control on Participation in Equity Incentive Plans of Overseas Listed Companies by Domestic Individuals (Notice), which took effect immediately and superseded the Operating Rules for Foreign Exchange Control on Participation in Employee Ownership Plans and Stock Option Schemes of Overseas Listed Companies by Domestic Individuals issued in 2007, and the Notice on Delegating the Approval Authority on Initial Foreign Exchange Purchase and Payment Quotas and Opening of Foreign Currency Accounts Relating to Participation in Employee Stock Ownership Plans of Overseas Listed Companies by Domestic Individuals issued in 2008. Under the Notice, companies listed in Hong Kong, Macao, Taiwan or foreign countries may grant their own stocks to directors, supervisors, senior management personnel or other employees of their domestically registered branches (including representative offices), parent companies, subsidiaries, partnerships or other institutions that directly or indirectly control or are controlled by the listed companies as part of an equity incentive plan. Individuals who participate in such equity incentive plan shall, through the domestic companies they serve, entrust a domestic agent and an overseas trustee to handle related matters. The domestic agent shall be responsible for foreign exchange registration and quota application, account opening, fund transfer and foreign exchange settlement while the overseas trustee shall be liable for the exercise of options, purchase and sale of related stocks or equity, and fund transfers etc. We will provide a detailed analysis of the Notice in our sister publication, Asia in Focus. If you do not already receive Asia in Focus but wish to subscribe, please click here.          


The full Chinese text of the Notice is available here.   




For further information, please contact:


Elizabeth Cole, Partner, Orrick

Thomas Man, Partner, Orrick
Brad Herrold, Orrick
Veronica Lockyer, Orrick
Yan Zeng, Orrick

Homegrown Labour & Employment Law Firms in China


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