On February 15, 2012, the State Administration of Foreign Exchange ("SAFE") issued the Notice on Relevant Issues Concerning Foreign Exchange Control on Participation in Equity Incentive Plans of Overseas Listed Companies by Domestic Individuals (Notice), which took effect immediately and superseded the Operating Rules for Foreign Exchange Control on Participation in Employee Ownership Plans and Stock Option Schemes of Overseas Listed Companies by Domestic Individuals issued in 2007, and the Notice on Delegating the Approval Authority on Initial Foreign Exchange Purchase and Payment Quotas and Opening of Foreign Currency Accounts Relating to Participation in Employee Stock Ownership Plans of Overseas Listed Companies by Domestic Individuals issued in 2008. Under the Notice, companies listed in Hong Kong, Macao, Taiwan or foreign countries may grant their own stocks to directors, supervisors, senior management personnel or other employees of their domestically registered branches (including representative offices), parent companies, subsidiaries, partnerships or other institutions that directly or indirectly control or are controlled by the listed companies as part of an equity incentive plan. Individuals who participate in such equity incentive plan shall, through the domestic companies they serve, entrust a domestic agent and an overseas trustee to handle related matters. The domestic agent shall be responsible for foreign exchange registration and quota application, account opening, fund transfer and foreign exchange settlement while the overseas trustee shall be liable for the exercise of options, purchase and sale of related stocks or equity, and fund transfers etc.
The full Chinese text of the Notice is available here.