The People's Bank of China set up a new department to oversee exchange rate policy on Nov. 2. The central bank said the department will formulate and implement foreign exchange policy, help develop an international yuan market, monitor international capital flows and advise the bank how to make the yuan convertible. The establishment of such a department indicates the significance of the exchange rate reform as a major issue in China’s economic reform.

Three fund managers from Shenzhen, in southern China's Guangdong province, are under investigation for suspected trading irregularities, people close to the matter told Caijing on Thursday. Tu Qiang of Invesco Great Wall, and Han Gang and Liu Hai from Great Wall Fund Management Co. resigned from their posts in September. During an investigation in August, the securities regulator in Shenzhen found that Tu's computer contained information relating to stock market transactions from a personal trading account belonging to his wife.

Chinese banks cut their holdings of overseas assets by US$ 65 billion between April and September, a source close to the State Administration of Foreign Exchange told Caijing on Tuesday. The increase in cross-border capital flows this year has largely been due to Chinese financial institutions reducing their overseas holdings, the person said, compensating for a decline in flows among non-financial institutions and households. Banks have the freedom to determine holdings of their overseas assets, the source said, noting that a sharp reduction in overseas assets would result in massive cross-border capital flows.