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Circular on the Optimization of the Foreign Exchange Settlement and Purchase Operation Model Concerning the Trading of Specified Domestic Futures Products
To all members,
To facilitate overseas traders’ and overseas brokers' engagement in the trading of specified domestic futures products, Shanghai International Energy Exchange (“INE”) has optimized the operation model of foreign exchange (“FX”) settlement and purchase for daily clearing as follows:
I. Summary of optimization
The fourth Monday of each month (postponed to the next trading day if it falls on a public holiday) is the cut-off date for conversion. Before the cut-off date, the net profit and loss of an overseas trader or overseas broker will be calculated on an accumulative basis to determine the eligible amount for conversion. If the eligible amount for conversion is above zero, such overseas trader or overseas broker may, at its own discretion, apply to its carrying Member for purchase of FX within the limit of the eligible amount. Upon the cut-off date for conversion, the Member shall complete the FX settlement and purchase according to the eligible amount for conversion as of the current day for all the overseas traders and overseas brokers as applicable.
II. Scope of optimization
The optimization only applies to FX purchase for daily clearing. The operations of FX settlement due to shortfall in RMB balance, the conversion for delivery payments, as well as forced FX settlement by INE remain unchanged.
III. Implementation Schedule
From January 1, 2021 to February 28, 2021, Members may either maintain the existing operations or upgrade the system to apply the optimized model. Starting from March 1, 2021, all members shall have completed the system upgrade and shall apply the optimized operation model. Members shall make preparations to ensure smooth migration to the new operation model.
Appendix: Guideline for the Settlement and Purchase of Foreign Exchange for Members (December 2020)
Shanghai International Energy Exchange
December 21, 2020
Notice on Optimizing the Currency Exchange Mechanism for Overseas Clients and Overseas Brokers in the Daily Settlement Process for Specified Domestic Futures Products
Ref: No. 612 [2020] DCE
December 21, 2020
To all members:
To further facilitate the trading of specified domestic futures products for overseas clients and overseas brokers, the currency exchange mechanism in the daily settlement process is hereby optimized and adjusted as follows:
I. Currency exchange procedures
For the daily settlement of overseas clients and overseas brokers, the fourth Monday of each month (or the next trading day if it is a statutory holiday) is the closing day of currency exchange. And during each period, the net profits or losses of overseas client and overseas broker will be calculated on accumulative basis to determine the currency exchange quota. If the then-current day is not the closing day of currency exchange and the currency exchange quota is greater than zero, the overseas client and overseas broker can file an application for foreign exchange purchase with the applied amount of foreign exchange to be purchased no greater than the currency exchange quota, and the Member acting as their clearing agency shall complete currency exchange service; if the then-current day is the closing day of currency exchange, the Member shall complete currency exchange according to the currency exchange quota of overseas client and overseas broker.
II. Scope of Application
The optimization only applies to currency exchange mechanism in the daily settlement process. The mechanisms of currency exchange for insufficient RMB balance settlement, currency exchange for delivery payment, and forced foreign exchange settlement carried out by the Exchange remain unchanged.
III. Implementation Schedule
From January 1, 2021 to February 28, 2021, members may either handle the currency exchange pursuant to the current mechanism or the optimized mechanism. From March 1, 2021, all members shall handle the currency exchange pursuant to the optimized mechanism. All members are required to complete the system upgrading on time and prepare for related services.
This notice is hereby released.
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