Cross-border flows of funds in domestic and foreign currencies affect the national economy in different ways. In the past，separate accounts were maintained for local and foreign currencies under a program for centralized pooling of funds and cross-border fund movements. Local and foreign currency policies were managed by different regulatory departments. But the State Administration of Foreign Exchange (SAFE) recently issued its Regulations on the Centralized Operation of Multinational Enterprise Group Funds [SAFE Document No. 7 (2019)] and for the first time，the regulator proposed multi-currency accounts，including renminbi funds. That groundbreaking document suggests that there eventually will be a merging of the management responsibilities for cross-border domestic and foreign currencies.

The Notice of the People’s Bank of China on the Relevant Matters Concerning the Centralized Operation of Cross-border Renminbi Funds by Multinational Enterprise Groups [PBOC Document No. 324 (2014)]，currently serves as the policy foundation for the centralized cross-border collection and payment business in renminbi under the current account. The Notice of the People’s Bank of China on Further Facilitating Multinational Enterprise Groups to Launch Cross-border Two-way Renminbi Fund Pooling Business [PBOC Document No.279 (2015)] serves as the policy basis for cross-border two-way renminbi fund pooling while Document 7 also governs foreign currency-related cross-border fund management business.

Multinationals and Foreign Currency Fund Pooling

There are regulatory differences between the multinational enterprise groups’ local currency and foreign currencies fund pools in terms of entry barriers，quota management and risk controls.