“The applicable basis of the regulation is "resident individual" status rather than nationality. Therefore, holding only Hong Kong or overseas resident status does not constitute a compliance ‘safe harbour’,” UBS says
Maybank Securities banking analyst Thilan Wickramasinghe says the China rule change on outbound direct investment (ODI) is unlikely to be too negative for the local banks. On June 10, JP Morgan said China’s Doc 837 has broad implications for net new money growth for banks over time.
Research done by UBS says China’s Doc 837 significantly increases compliance requirements and scrutiny on capital outflows. The regulations, which apply to mainland residents regardless of foreign residency status significantly raise compliance requirements in practical implementation. UBS noted that the regulation elevates previously fragmented supervision to the State Council level and establishes a new framework covering the entire investment process, including capital outflows, transaction structures, investment channels and filing requirements.
