On May 6th, the "Management Measures for Multi functional Free Trade Account Business of Hainan Free Trade Port" were implemented, and ten banks in Hainan Province, including Bank of China, Construction Bank, and Industrial and Commercial Bank of China, launched the Hainan Free Trade Port Multi functional Free Trade Account (referred to as "EF Account"). At the press conference held by the Propaganda Department of the Hainan Provincial Party Committee on the same day, the heads of the Hainan Branch of the People's Bank of China and the Hainan Branch of the State Administration of Foreign Exchange interpreted relevant content such as "first line liberalization and second line management". It is reported that as one of the most important financial infrastructure for the sealing operation of Hainan Free Trade Port, the EF account is a local and foreign currency integrated account opened by banks for customers in the multi-functional free trade account accounting unit. The transfer of funds from EF accounts follows the principle of "first line liberalization, second line cross-border management, and limited penetration of accounts with the same name across second lines", providing basic conditions for the free and convenient flow of cross-border funds between Hainan Free Trade Port and overseas. What is "first line" or "second line"? Fang Xin, President of the Hainan Branch of the People's Bank of China and Director of the Hainan Branch of the State Administration of Foreign Exchange, introduced that fund transfers between EF accounts and overseas accounts, offshore accounts (OSA accounts), non resident institutional accounts (NRA accounts), and multi-functional free trade accounts are the "frontline" of fund transfers in EF accounts. EF account funds can be freely transferred across frontlines in accordance with the law. The transfer of funds between EF accounts and RMB bank settlement accounts of domestic residents (including institutions and individuals) is the "second line" of EF account fund transfer, and the "cross second line" of EF account funds is considered as cross-border management. How to understand "limited penetration across second tier accounts with the same name"? Xie Duanchun, Vice President of the Hainan Branch of the People's Bank of China and Deputy Director of the Hainan Branch of the State Administration of Foreign Exchange, introduced that "same name penetration" refers to allowing a multi-functional free trade account opened by the same operating entity in the Hainan Free Trade Port to freely transfer funds within the quota with its own domestic ordinary account, to meet its capital manipulation needs. The funds infiltrated shall not be used for purposes listed on the negative list. This policy aims to facilitate the transfer of funds between multifunctional free trade accounts and current domestic ordinary accounts, while also taking into account the security of cross-border fund flows. Which entities can handle EF accounts? Xie Duanchun stated that given that the EF account system is a new set of financial integrated innovation systems, its management principles are "manageable and open", and the promotion mechanism is gradually explored and steadily promoted, reflecting the management concept of "the more honest and convenient". Therefore, in the initial stage, high-quality enterprises with real business needs for foreign trade and investment are allowed to open EF accounts and handle related businesses. In the future, we will gradually expand our business scope and enterprise scope based on the development of EF account business and the construction process of Hainan Free Trade Port, under the premise of controllable risks. Where can I open an EF account? Fang Xin introduced that currently, 10 banks in Hainan Province, including Bank of China, Construction Bank, Agricultural Bank of China, Industrial and Commercial Bank of China, CITIC Bank, Bank of Communications, Pudong Development Bank, China Merchants Bank, Everbright Bank, and Industrial Bank, have completed business system transformation and officially launched EF accounts on the morning of the 6th. Ping An Bank Haikou Branch in the province has also completed the system renovation in the early stage, and after passing the acceptance inspection, it will be
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