China simplifies personal FX exchanges, tightens supervision of laundering

Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, in Beijing, China, January 21, 2016. REUTERS/Jason Lee

SHANGHAI (Reuters) - China’s foreign exchange regulator issued new rules on Thursday simplifying procedures for individuals exchanging foreign currencies but keeping net purchase quotas unchanged.

In a minor reform, the State Administration of Foreign Exchange (SAFE) said that financial outlets designated by banks for such exchanges will no longer need its approval to conduct such business, effective immediately.

SAFE, a unit of the central People’s Bank of China, also required banks to tighten supervision of foreign exchange management while preventing possible money laundering, according to the new rules.

The new rules, replacing related regulations promulgated in 2007 and 2008, “will not have any impact on the normal foreign currency exchange activities for individuals, including their annual exchange quota of an equivalent of $50,000,” the regulator said.

China has been reforming its complicated and rigid administrative approval mechanisms for financial activities, abolishing some approval requirements and replacing them with a registration system in which operators just need to register for conducting the businesses.

Reporting by Lu Jianxin and Pete Sweeney; Editing by Kim Coghill