The Central Bank of China

PRESS RELEASE Release Date: May 17, 2004




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Important Measures in April 2004

In line with the policy of promoting the liberalization, internationalization, and development of the foreign exchange market, the Central Bank of China (CBC) announced the following measures in April 2004:

1. In order to streamline the application procedure for a security firm conducting the foreign exchange business, the CBC informed the Chinese Securities Association, on April 1st, 2004 that after getting the approval of the CBC to conduct the business of accepting consignment, a security firm need not apply for further approval in order to allow its branch offices to conduct the same business or to start trading in additional foreign stock exchanges both of the head office and branch offices of the same security firm.

2. In line with amendment of regulations regarding foreign portfolio and direct investment released by the Ministry of Finance and the Ministry of Economic Affairs, as well as to simplify the remittance procedures, the Central Bank of China changed the text of the "Guideline for Banking Enterprises on Assisting Customers to Declare Foreign Exchange Receipts and Disbursements or Transactions" on April 7, 2004. The necessary documents needed to be verified regarding the following settlements of inward or outward remittance are amended:

(1)Portfolio investment by foreign institutional investors,

(2)Security firms engaged in trading structured products linked to foreign financial instruments,

(3)Securities investment consulting and trust enterprises operating discretionary foreign securities investment services,

(4)Declaration of outward remittance to Mainland China with the investment amount under US$200,000,

(5)Repatriation of profit by branch offices of foreign companies to parent companies, etc.

3.Approved the following Authorized Banks to operate new foreign exchange derivatives business:

(1) Ta Chong Bank : Foreign Currency Structured Products composed of any combination of Foreign Currency Deposits, FCY Interest Rate Swaps, FCY Interest Rate Options and FCY Interest Rate Swaptions.

(2)Bank of Panhsin: Foreign Currency Options.

(3)Fu Hwa Commercial Bank: Foreign Currency Structured Products composed of any combination of Foreign Currency Deposits, FCY Interest Rate Swaps, FCY Interest Rate Options and FCY Interest Rate Swaptions.

(4)The Toronto Dominion Bank: FCY/FRY.

(5)BNP Paribas: Structured Products composed of NTD Interest Rate Swaps linked with FCY Interest Rate Swaps, FCY Interest Rate Options and Forward Rate Agreement.

4. 13 non-authorized foreign exchange banks were approved to sell/buy foreign currency banknotes and traveler's checks. As of the end of April 2004, there were 1,081 authorized foreign exchange banks, including 1,014 domestic banks and 67 foreign banks.