The Central Government of the People’s Republic of China (“Mainland”) and the Government of the Hong Kong Special Administrative Region (“Hong Kong”) reached a further understanding regarding the Closer Economic Partnership Arrangement between the Mainland and Hong Kong (“CEPA”) (as discussed in the July 2003 issue of China Legal Update) on 27 June 2006. This supplement, referred to as CEPA IV, further liberalises PRC market access for qualified Hong Kong service suppliers ...
The Government of Hong Kong and the Central Government of the People’s Republic of China (“Mainland”) signed An Arrangement on Reciprocal Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements between Parties Concerned on 14 July 2006 ...
The Ministry of Commerce issued the Notice on Further Improving the Work of Attracting Foreign Investment into the Logistics Sector on 20 April 2006. The Notice, which became effective on 31 March 2006, is the first major liberalisation in the PRC logistics sector since the 2002 Notice on Relevant Issues in the Work of Launching Pilot Projects for the Establishment of Logistics Enterprises with Foreign Investment (“Pilot Notice”) ...
The Ministry of Construction, Ministry of Commerce, National Development and Reform Commission, the People’s Bank of China, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange jointly issued the Opinions on Regulating the Entry into and the Administration of Foreign Investment in the Real Estate Market on 11 July 2006 ...
Amendment (6) to the Criminal Law of the People's Republic of China was adopted at the 22nd Session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on 19 June 2006 and promulgated by President Hu Jintao on 29 June 2006. The Amendment, which entered into effect on the date it was promulgated, introduces penalties for a range of economic crimes ...
The Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Adjustment of the Scope of the Tax Refund Policies for the Purchase of Domestically Manufactured Equipment by Foreign Investment Projects on 10 May 2006. The Notice revises the value-added tax (“VAT”) refund policy for the purchase of domestically manufactured equipment (“domestic equipment”), which is available to certain foreign investment projects ...
The State Administration of Foreign Exchange ("SAFE") issued the Notice on Adjusting the Policies on Foreign Exchange Control for Current Account Items on 14 April 2006. The Notice, which became effective on 1 May 2006, further relaxes foreign exchange control over current account items ...
The Ministry of Finance and State Intellectual Property Office jointly issued the Notice of on Several Issues Concerning Strengthening the Administration on Asset Valuation in Connection with Intellectual Property Rights on 19 April 2006. Mandatory valuation The Notice clarifies the circumstances in which an assets valuation of intellectual property rights (“IP rights”) is to be conducted ...
An employment permit system has recently been implemented for Taiwan, Hong Kong and Macau personnel rendering services in Mainland China.The Administrative Regulations on the Employment of Taiwan, Hong Kong and Macau Residents in Mainland China (“Employment Regulations”) were issued by the PRC Ministry of Labour and Social Security on 14 June 2005 and took effect on 1 October 2005 ...
Side letters are a common phenomenon encountered by hedge fund managers today. These letters are often used to secure better fees for key investors and to give preferential or improved access to information about underlying investments and liquidity. They also provide what are commonly referred to as most favoured nation provisions, meaning that if the fund offers better terms to another investor, the early-stage investors will also be able to take those new or better terms ...
On 11 July 2006, six Chinese ministries (Ministry of Construction, Ministry of Commerce, National Development and Reform Commission, The People’s Bank of China, State Administration for Industry and Commerce and State Administration of Foreign Exchange) jointly issued a circular “Opinions on Regulating the Entry into and the Administration of Foreign Investment in the Real Estate Market” Jianzhufang [2006] Circular No ...
In September 2006, the Securities and Futures Commission (SFC) released the Consultation Conclusions on the draft guidelines on marketing materials for listed structured products (Guidelines). The Guidelines, to be published under section 399 of the SFO, will replace the current guidelines, which take the form of a letter to warrant issuers. The Stock Exchange of Hong Kong will continue to require compliance with the revised Guidelines as a condition to the listing of structured products ...
On 24 August 2006, the China Securities Regulatory Commission ("CSRC"), People's Bank of China ("PBOC") and the State Administration of Foreign Exchange ("SAFE") jointly issued new regulations, the "Measures for the Administration of Investment in Domestic Securities by Qualified Foreign Institutional Investors" (the "New QFII Rules") that govern the regime allowing qualifying foreign institutions approved by the CSRC as Qualified Foreign Institutional Investors ("QFIIs") to invest in China A sh
Before 1978, China's economic policies were mainly aimed at self-reliance. As a result, the country was virtually shut off from world economic developments. In 1978, China opened its doors to foreign investment with the goal of modernising its economy and raising the living standard of its people. The country has since established the necessary legislative basis for foreign investment and has actively sought to acquire modern foreign management and technical skills ...
Following the amendments to the Inland Revenue Ordinance earlier this year, the Inland Revenue Department ("IRD") issued its Departmental Interpretation and Practice Notes ("DIPN") No. 43 on 6 September 2006. Whilst the Inland Revenue Ordinance ("IRO") laid down the legal foundation in respect of the Hong Kong profits tax exemption for unauthorised funds, DIPN 43 provides some practical guidance on the application of the exemption ...
The recently introduced Pension Protection Act 2006 makes two important changes to the definition of the term "plan assets" for the purposes of ERISA. The new legislation continues to provide that the assets of a fund or other entity will not constitute "plan assets" and will therefore not be subject to the fiduciary obligations under ERISA if less than 25% of the value of each class of equity in the entity is held by "benefit plan investors" ...
By January 2007 all EU members are supposed to adopt MiFID, including its implementation measures published in June 2006. Firms carrying out investment services will then have to comply with it by November 2007. MiFID should greatly facilitate EU cross-border activities since passported firms will no longer be subject to prudential regulation in each country where they provide services but only by their home country ...
In the recent Feedback Statement (FS06/2) from the UK's Financial Services Authority (FSA) to its Discussion Paper entitled "Hedge funds: A discussion of risk and regulatory engagement", the FSA identified the use of side letters as an area of concern where a market failure may be present, thus potentially requiring regulatory intervention by the FSA ...
The SFC has recently published a guide to the information required to be submitted to the SFC in relation to risk management and control processes by fund managers seeking approval to use the expanded investment powers under UCITS III (Guide). The Guide sets out the items and areas relating to the risk management and control process that the SFC normally expects to be provided in order to give the SFC an understanding of the risk management processes of the relevant UCITS III funds ...
In order for an employee to be entitled to the statutory benefits endowed under the Employment Ordinance (the "EO"), in most of the situations, he has to be under a continuous employment with their employer for a certain minimum period. As a result, what constitutes a continuous employment and what breaks its continuity are important to both employers and employees. In a recent Court of Appeal case, Lui Lim Ka & others v ...