Shanghai fined and punished more than 500 foreigners for illegally staying in the country after China imposed its new exit-entry law in July, according to statistics provided by the city’s immigration inspection department. From July 1 through Aug 10, 534 foreigners had illegally entered or overstayed their visas. A foreigner who stayed illegally in Shanghai for 33 days was fined CNY10,000, the maximum fine allowed under the law that took effect on July 1.

Chen Yi, Chief Executive of Shanghai Fanxin Insurance Agency Co, was arrested in a joint operation between Chinese and Fijian police in Fiji, four days after the China Insurance Regulatory Commission (CIRC) said it had found Fanxin raising funds illegally by selling “self-made,” fixed-income wealth management agreements without authorization. Police were probing Shanghai Fanxin Insurance Agency after it was found to have sold unauthorized wealth management products (WMPs). The investigation began after Chen Yi fled with an unspecified amount of money. Local media reported that Chen took CNY500 million from the company before fleeing the country. Founded in 2007, Fanxin is one of the largest insurance brokers in Shanghai. The company was known for its aggressive sales strategy of offering products with high investment returns.

JPMorgan has started an internal probe into its hiring of well-connected Chinese individuals in Hong Kong and is adopting measures to mitigate potential penalties as U.S. authorities investigate its operations. The bank has hired U.S. law firm Paul, Weiss, Rifkind, Wharton & Garrison to investigate its hiring practices in Hong Kong. The anti-bribery unit of the U.S. Securities and Exchange Commission (SEC) is investigating the bank’s hiring in Hong Kong of Zhang Xixi, a daughter of Zhang Shuguang, a former senior railway official under arrest for corruption, and Tang Xiaoning, a son of Tang Shuangning, Chairman of China Everbright Group. Both offspring no longer work for the New York-listed bank. The hirings could be investigated under the U.S. Foreign Corrupt Practices Act (FCPA). Hiring the children of foreign officials is considerd an improper business advantage if the bank was involved in business negotiations with related officials around the time of the hirings. Because JPMorgan is a U.S. company, its employees are bound by the FCPA anywhere in the world, the South China Morning Post reports.

Suning Commerce plans to set up a bank after the central government issued guidelines encouraging private capital to enter the financial industry. The Nanjing-based firm, formerly known as Suning Appliance, said it was “preparing actively to apply for establishing Suning Bank”. A Spokeswoman said the company had secured the internet domain names “suningbank” and “sunanbank” last month for future use. Beijing has been encouraging private investment to enter the financial sector in order to break the near-monopoly of state-owned lenders. Last month, the central government issued guidelines reaffirming the decision to allow private banks. Shang Fulin, Chairman of the China Banking Regulatory Commission (CBRC), said earlier that trials of privately-owned financial institutions would debut in the second half of this year. Suning, the biggest seller of electronic appliances in China and a major online retailer, has wider ambitions. Last year, it said it planned to set up a microcredit firm in Chongqing to offer loans to small and medium-sized suppliers to the online shopping portal suning.com. It is also preparing to launch an online financial platform that will allow users to buy bonds, money funds and wealth management products. Yifubao, the online payment tool used by Suning, obtained a third-party payment license from the central bank a year ago. Other private firms have also shown interest in the financial industry. A consortium of investors led by Juneyao Group is spearheading a move to set up a privately-owned bank. Juneyao, which runs airlines and dairy businesses, along with other privately-owned companies including Fosun Group and Shanda Interactive Entertainment, plans to establish a bank with an initial investment of CNY5 billion. It is still in the application process and it is unclear when the investors will receive the go-ahead from the regulator.

China plans to suspend some laws on foreign investment in proposed new free-trade zones including Shanghai as part of Premier Li Keqiang’s drive to open up the economy to sustain growth. The changes would provide innovative ways of opening up the economy, remove unnecessary administration and help transform the state’s role in the economy, according to a government statement. “The Chinese government knows that having foreign investment is a very good thing and they want this to be an attractive market for strategic and financial investors,” said Kent Kedl, Managing Director for Greater China and North Asia at risk consulting firm Control Risks. “Many foreign investors are concerned about the bureaucracy and lack of clarity around regulations, that’s probably the biggest concern when they come to China”, he said. Foreign direct investment (FDI) in China fell 3.7% last year to USD111.7 billion from a record USD116 billion in 2011, government data shows. Investment rose 4.9% in the first half of this year to USD62 billion. If the draft is approved by the Standing Committee of the National People’s Congress (NPC), some laws on foreign investment, sino-foreign joint ventures and cooperative enterprises in the free trade areas, would be suspended. The statement did not give a time frame or additional details about the changes, which will apply to the proposed zone in Shanghai and any potential new ones. A 13-year ban on the manufacturing and sale of video-game consoles in China would be lifted, on the condition that companies make the products in the new Shanghai area. Reforms would also include interest-rate liberalization and full convertibility of the yuan. Besides Shanghai, other cities, including Tianjin and Xiamen, are seeking approval for free-trade zones.