Definition of Instrument
Forward rate agreement refers to a financial contract in which both trading parties agree to exchange the interests which are respectively calculated at a fixed rate and a reference rate for a certain amount of nominal principal on a agreed date. Among the two parties, in the forward rate agreement, the buyer pays the interest at a fixed rate while the seller pays the interest at a reference rate.
Bilateral trading and one-click trading
Forward rate agreement transaction can be conducted through the trading system of CFETS, by telephone, by fax and in other manners. For the concluded transaction not going through the trading system of CFETS, relevant financial institutions should deliver transaction records of forward rate agreement to CFETS for recognition before 12:00 a.m. of the next business day after such a transaction was concluded.
Reference rate for forward rate agreement should be a benchmark market rate for the national interbank bond market released by CFETS and other organizations under the authorization of the PBC, or a benchmark rate announced by the PBC. Specific rate is agreed upon by both trading parties.
Of the national interbank bond market participants (referred to as market participants), financial institutions having a market maker or clearing agency business qualification, can conduct forward rate agreement transaction with all other market participants, and other financial institutions can conduct forward rate agreement transaction with all financial institutions, but non-financial institutions can only carry out hedge-purposed forward rate agreement transaction with the financial institutions having a market maker or clearing agency business qualification.
Beijing time: 9:00-12:00 am, 1:30-4:30 pm, excluding Chinese statutory holidays.
- Guide on Registration of Overseas Investors for Northbound Trading in Bond Connect
- Interim Measures for the Administration of Mutual Bond Market Access between Mainland China and Hong Kong SAR
- User Operation Manual of the Agent Trading System (Version for Overseas Institutional Investors)
- Fee Schedule