According to the Announcement of People’s Bank of China General Administration Department on Further Improve the Cross-border Capital Flow Management to Support Opening of the Financial Market (PBC General Administration Department Document [2018] No.96) and the Announcement of People’s Bank of China on Improve RMB Purchases and Sales Business Management (PBC Document [2018] No.159), China Foreign Exchange Trade System (hereinafter referred to as “CFETS”) has improved the arrangements for overseas participating banks of RMB purchases and sales business (hereinafter referred to as “Overseas Participating Banks”) and Overseas RMB Clearing Banks to enter China Interbank FX Market as follows:

I. Qualification

1. Overseas Participating Banks with international reputation, regional representativeness and large-scale RMB purchases and sales business (including cross-border RMB settlement of current account, direct investment and approved investment such as securities investment etc. under the capital and financial account) and Overseas RMB Clearing Banks that have signed RMB business clearing agreement with People’s Bank of China (hereinafter referred to as “PBC”) may apply to CFETS for China Interbank FX Market membership and conduct FX transactions including spot, forward, swap, CCS and option through CFETS trading system. Settlement methods include gross settlement and netting settlement.

2. Overseas bank group may appoint a branch within the group to conduct centralized RMB purchases and sales business. Overseas bank group conducting centralized RMB purchases and sales business shall apply to CFETS for China Interbank FX Market membership in the name of its appointed branch.

II. Application Documents

1. An application report. Its content includes, but not limited to:

(1) Basic information of the institution;

(2) Promise to strictly abide by related rules of RMB purchases and sales business, including:

(a) Business scope;

(b) Product type;

(c) Corporate clients conducting RMB purchases and sales business with Overseas Participating Banks or Overseas RMB Clearing Banks shall complete related payments in the same bank or bank group;

(d) Pay close attention to abnormal transactions;

(e) Monitor the capital flow of block trades and report related information to PBC Shanghai Headquarter through CFETS in a timely manner.

(3) Committed to fulfilling the obligation of authenticity review. In accordance with the principle of “know your customers”, “understand business” and “due diligence”, confirm that the purchases and sales business is in line with the principle of real demand. And report related information through CFETS system in accordance with related requirements.

(4) Committed to provide background materials of purchases and sales business to CFETS coordinating with the regulatory requirements.

2. Copies of the institution’s registration documents and corresponding Chinese version.

3. Internal operation procedure for trading in China Interbank FX Market.

4. The policies of risk management and RMB purchases and sales business information reporting related to trading in China Interbank FX Market.

5. Copies of the clearing agreement signed with the PBC (for Overseas RMB Clearing Bank only).

6. CFETS RMB/FX Membership Application Form.

7. CFETS Network Connection Application Form.

8. CFETS FX Trading System Digital Certificate Application Form.

9. Copies of the Certificate of FX Trader issued by CFETS (each institution shall have at least two certified FX traders).

10. Name, resume and contact information of related managing staff and principal trading staff.

11. Other documents required by CFETS.

All aforementioned application documents and completed forms shall be stamped with official seal or signed by authorized signatory (attached with signature authorization).

III. Application Procedure

1. Qualified Overseas Participating Bank or Overseas RMB Clearing Bank submit application documents to CFETS.

2. CFETS sends the Member Agreement to institutions that have submitted complete application documents and met the statutory requirements.

3. The institutions complete preparation work, including signing Member Agreement, finishing network connection and attending trader training program.

4．CFETS sends formal market entry notice to the institutions approving the membership of China Interbank FX Market and publishes public announcement through www.chinamoney.com.cn.

IV. Information Reporting

Overseas Participating Banks and Overseas RMB Clearing Banks acquiring the membership of China Interbank FX Market and conducting RMB-FX transactions through CFETS trading system shall report related details of RMB purchases and sales through the information reporting panel in CFETS Post-trade Processing Platform at the end of each trading day (no later than 8:00 AM of the next trading day. For bank groups conducting centralized RMB purchases and sales business, no later than 17:00 of the next trading day). Reported details include the direction of RMB purchases and sales, the name of the ultimate overseas customers for RMB purchases and sales, the country or region of the ultimate overseas customers, the RMB transaction amount and the purpose/source, trading products towards customers, etc. The counterparties of Overseas Participating Banks or Overseas RMB Clearing Banks are not obligated to report relevant information through the RMB Cross Border Payment & Receipt Management Information System (RCPMIS). 

V. Others 

1. Overseas Participating Banks and Overseas RMB Clearing Banks can connect to CFETS trading system directly via leased line or MPLS/ VPN.

2. Overseas Participating Banks and Overseas RMB Clearing Banks can choose to use CFETS Post-trade Processing Platform to complete back-office trade confirmation with their counterparties. 

3. Current China Interbank FX Market regulations and practices on network connection requirements, technical standards and fee schedule shall be applied to Overseas Participating Banksand Overseas RMB Clearing Banks.

4. Overseas Participating Banks acquiring the membership and trading in China Interbank FX Market shall no longer trade via domestic agent banks or Overseas RMB Clearing Banks. 

5. This Notice shall be implemented as of the date of promulgation. If other current regulations are inconsistent with this notice, this one shall prevail.

6. This English version is for your reference only. In case any discrepancy exists between the Chinese and the English version, the Chinese version shall prevail.

VI. Contact Information

Tel: 4009787878*1*2；

Email: fx_mkt@chinamoney.com.cn

China Foreign Exchange Trade System

Sep.12, 2018