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Notice on the Enhanced Management of Foreign Exchange Risk for Foreign Institutional Investors in the Interbank Bond Market

Fang submitted 2020-01-23 11:18:04

Notice on the Enhanced Management of Foreign Exchange Risk for Foreign Institutional Investors in the Interbank Bond Market

In accordance with the Circular of the SAFE on Improving the Management of Foreign Exchange Risk for Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 2 [2020]), China Foreign Exchange Trade System (“CFETS”) has improved the arrangements for foreign institutional investors (“foreign investors”) who participate in foreign exchange markets through the China Interbank Bond Market (CIBM Direct). The details are as follows:

I. Entry into Interbank FX Market

1. Qualification Requirements

The foreign investors specified by the Public Notice No. 3 [2016] of the People’s Bank of China (PBC), including commercial banks, insurance companies, securities companies, fund management companies, and other asset management or financial institutions duly registered or incorporated outside the Chinese mainland; investment products lawfully issued by the aforementioned institutions to clients; and other medium and long term institutional investors approved by the PBC, such as pension funds, charity funds and endowment funds, may apply to CFETS for China Interbank FX Market (CIFXM) membership and engage in transactions that help them manage foreign exchange risk.

Foreign banking investors may choose to enter the CIFXM directly and/or through Prime Brokerage (PB). Non-bank foreign investors may participate in the CIFXM through PB.

2. Application Procedures

(1) Foreign investors who intend to enter the CIFXM directly and/or through PB, may submit the application materials to CFETS for obtaining CIFXM membership;

(2) CFETS sends the Member Agreement to applicants that have submitted complete application materials and met the prescribed requirements;

(3) Each applicant completes the pre-entry preparations, including signing Member Agreement, establishing network connections, and arranging at least two traders to complete the training program;

(4) Non-bank foreign investors and those foreign banking investors who choose to enter the CIFXM through PB, should submit the PB service application to CFETS and register their prime broker selection;

(5) CFETS sends an official approval notice to qualified applicants to recognize their CIFXM membership and publishes their names at www.chinamoney.com.cn and other releasing channels.

3. Application Materials

(1) Photocopy of the applicant’s registration or incorporation certificate and the corresponding Chinese translation;

(2) CFETS RMB/FX Membership Application Form, CFETS Network Connection Application Form, and CFETS FX Trading System Digital Certificate Application Form;

(3) Letter of Commitment, in which the applicant shall undertake to engage in foreign exchange transactions strictly for hedging purposesbased>(4) Internal operating procedures and risk management rules for trading in the CIFXM;

(5) CFETS Prime Brokerage Service Application From (if PB mode is chosen); and

(6) Other documents required by CFETS.

All aforementioned application materials and forms should be stamped with the applicant’s official seal or signed by its authorized signatory (attach the signature authorization). Foreign investors who are already members of the interbank RMB/FX market do not need to re-apply for membership, and only need to submit application material (3).

II. Filing Requirements for Bank-to-Customer Market

The foreign investors specified by the Public Notice No. 3 [2016] of the PBC, may directly trade with domestic financial institutions as customers after filing with CFETS by themselves or through settlement agents. Each foreign investor may trade with at most THREE domestic financial institutions.

1. Filing Procedures

(1) Foreign investors who choose to directly trade with domestic financial institutions as customers should file their selection of such institutions with the CFETS either by themselves or through settlement agents after signing derivatives agreements but before trading;

(2) After receiving the filing form, CFETS notifies the selected domestic financial institution(s) and activate their information reporting function in the CFETS system;

(3) Any foreign investor who has changed their selection must notify CFETS for a filing update within three business days after the derivatives agreement is signed. CFETS will notify the newly selected domestic financial institution(s) within three business days and update their information reporting function accordingly.

2. Materials to be Filed

(1) The Filing Form

a. The name and contact information of the selected domestic financial institution(s);

b. Confirmation of the signing of derivatives agreement(s) with the domestic financial institution(s).

(2) Other documents required by CFETS.

All aforementioned materials and completed forms should be stamped with the official seal or signed by an authorized signatory (attach the signature authorization).

III. Information Reporting

1. Reporting Entity

Foreign investors who participate in the CIFXM must fulfill their reporting obligations themselves. For the bank-to-customer market, the selected domestic financial institutions who are simultaneously trading counterparties with their foreign investor customers shall fulfill the reporting obligations.

2. Contents of Reporting

(1) Foreign investors who participate in the CIFXM shall report the trade date, country/region, purpose/source, origin of trade, among other information.

(2) In bank-to-customer market, the selected domestic financial institutions shall report the trade date, the name of foreign investor, country/region of foreign investor, trading product, trading direction, amount, exchange rate, purpose/source, origin of trade, among other information.

“Purpose/source” indicates whether or not the FX trade is conducted through CIBM Direct; “transaction type” indicates whether the FX trade is an “initial transaction” or to “reversely closing position” or an “extension.”

3. Rules for Reporting

Reporting entities shall report the required information through the information reporting page on the CFETS Post-trade Processing Platform each trading day. The reporting cut-off time is 8:00AM of the next trading day for foreign investors who participate in the CIFXM, and 12:00PM of the next trading day for domestic financial institutions in the bank-to-customer market. All times refer to Beijing time (GMT+8).

IV. Miscellaneous

1. “Prime Brokerage” as referred to in this Notice means the transaction model whereby a foreign investor (the Prime Brokerage client) enters into a trade using the name and credit limit of a domestic financial institution (the Prime Broker). Specific guidelines will be provided through a separate notice.

2. This Notice is effective as of February 1, 2020. In case of any discrepancy between this Notice and current CFETS rules, this Notice shall prevail.

V. Contact Information

Tel: 400 978 7878 *1*2*1, 021-2069 3742; 021-2316 5027;

Email: fx_mkt@chinamoney .com.cn.

China Foreign Exchange Trade System

January 22, 2020

[Note]: In the event of conflicts, contradictions, imprecision, mistakes or omissions between the Chinese version and the English version, the Chinese version shall prevail as the only version of this Notice.

关于落实完善银行间债券市场境外机构投资者

外汇风险管理有关安排的公告

中汇交公告〔2020〕7号

根据《国家外汇管理局关于完善银行间债券市场境外机构投资者外汇风险管理有关问题的通知》(汇发〔2020〕2号),中国外汇交易中心(以下简称交易中心)完善了银行间债券市场直接入市渠道(CIBM Direct)下境外机构投资者(以下简称境外投资者)参与外汇市场的相关安排,具体如下。

一、银行间外汇市场准入

(一)申请资格

符合《中国人民银行公告〔2016〕第3号》规定的各类境外投资者,包括在境外依法注册成立的商业银行、保险公司、证券公司、基金管理公司及其他资产管理机构等各类金融机构,上述金融机构依法合规面向客户发行的投资产品,以及养老基金、慈善基金、捐赠基金等中国人民银行认可的其他中长期机构投资者,可申请成为银行间外汇市场会员开展外汇风险管理业务。

境外银行类投资者可选择直接入市和/或通过主经纪业务入市参与银行间外汇市场,境外非银行类投资者可通过主经纪业务入市参与银行间外汇市场。

(二)申请流程

1、选择直接入市和/或通过主经纪业务入市的境外投资者,可向交易中心提交申请材料,申请成为交易中心会员;

2、申请机构申请材料齐全且符合法定形式要求的,交易中心向其发送会员协议;

3、申请机构完成会员协议签署、网络连接和交易员资格培训(至少2名)等准备工作;

4、境外非银行类投资者或选择主经纪业务入市的境外银行类投资者,应向交易中心提交主经纪业务申请并备案选定的主经纪商;

5、交易中心对符合条件的申请机构发送正式入市通知,核准该机构成为银行间外汇市场会员,并通过中国货币网等途径对外公告。

(三)申请材料

1、注册设立文件的复印件及相应中文翻译件;

2、银行间外汇市场人民币外汇会员申请表、入网退网申请表、外汇交易系统数字证书申请表;

3、承诺函,主要内容包括:本机构承诺严格遵守套期保值原则,根据投资银行间债券市场产生的外汇风险敞口开展外汇交易;本机构承诺履行报送义务,按照交易中心规定报送相关信息等;

4、参与银行间外汇市场相应产品的内部操作规程以及风险管理制度;

5、主经纪业务申请表等(若选择主经纪业务模式);

6、交易中心要求提供的其他材料。

上述申请材料及填写完整的表格需加盖公章或经有权签字人签字(附授权签字书)。已具备银行间人民币外汇市场会员资格的境外投资者无需重新申请入市,仅需补充提交材料3。

二、银行对客户市场备案

符合《中国人民银行公告[2016]第3号》规定的各类境外投资者,自行或通过结算代理行向交易中心备案后,可作为客户与境内金融机构直接交易。每家境外投资者可选择不超过3境内金融机构办理业务。

(一)备案流程

1、选择作为客户与境内金融机构直接交易的境外投资者,应在相关衍生品协议签署后、业务开展前,自行或通过结算代理行将选定的境内金融机构向交易中心备案;

2、交易中心收到备案表后,将通知其选定的境内金融机构,并为其开通信息报送系统权限;

3、若境外投资者调整选定的境内金融机构,应于衍生品协议签署后三个工作日内向交易中心调整备案,交易中心将于三个工作日内通知其变更的境内金融机构,并调整其信息报送系统权限。

(二)备案材料

1、备案表

(1)选定的境内金融机构名称及联系方式;

(2)确认已与境内金融机构完成衍生品协议签署。

2、交易中心要求提供的其他材料。

上述申请材料及填写完整的表格需加盖公章或经有权签字人签字(附授权签字书)。

三、信息报送

(一)报送主体

参与银行间外汇市场的境外投资者应自行履行报送义务,参与银行对客户市场的境外投资者由其选定并开展交易的境内金融机构履行报送义务。

(二)报送内容

1、参与银行间外汇市场的境外投资者报送内容包括:成交日期、国别地区、用途或来源、事件类型等。

2、参与银行对客户市场的境外投资者选定的境内金融机构报送内容包括:成交日期、境外投资者主体名称、境外投资者国别地区、交易品种、交易方向、金额、汇率、用途或来源、事件类型等。

“用途或来源”指是否CIBM Direct;“事件类型”指“初始交易、反向平仓、展期”。

(三)报送规则

报送主体应每日通过交易中心交易后处理平台的信息报送页面报送相关信息。境外投资者参与银行间外汇市场交易的信息报送截止时间为交易日次日北京时间8:00;境内金融机构对客户外汇交易的报送截止时间为交易日次日北京时间12:00。

四、其他

(一)本公告所称主经纪业务(Prime Brokerage)指境外投资者(主经纪客户)借用境内金融机构(主经纪商)名义和授信,与对手方达成交易的业务模式。具体业务指引另行通知。

(二)本公告自2020年2月1日起施行,现行规定与本公告不一致的,以本公告为准。

五、联系方式

4009787878*1*2*1

021-20693742;021-23165027;

fx_mkt@chinamoney .com.cn。


中国外汇交易中心

2020年1月22日

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