Announcement of the China Foreign Exchange Trade System on Matters concerning Overseas Banks' Participation in the Regional Trade on the Inter-Bank Foreign Exchange Market 

· Document Number：No. 1 [2018] of the China Foreign Exchange Trade System

· Area of Law： Foreign Exchange

· Level of Authority： Departmental Regulatory Documents

· Date issued：01-04-2018

· Effective Date：01-04-2018

· Status： Effective

· Issuing Authority： China Foreign Exchange Trading Center & National Interbank Funding Center

Announcement of the China Foreign Exchange Trade System on Matters concerning Overseas Banks' Participation in the Regional Trade on the Inter-Bank Foreign Exchange Market
(No. 1 [2018] of the China Foreign Exchange Trade System)
For the purposes of actively cooperating with the “Belt and Road” initiative of the state, promoting the development of regional trade on the inter-bank foreign exchange market, and improving the efficiency of bilateral home currency settlement, in accordance with the Official Reply of the People's Bank of China (Letter No. 402 [2017], General Office, PBC) and the relevant rules of the China Foreign Exchange Trade System (“CFETS”) on market access, the CFETS intends to introduce qualified overseas banks into the regional trade on the inter-bank foreign exchange market, and hereby makes the relevant arrangements as follows:
I. Qualifications
Overseas participating banks and clearing banks of the RMB purchase and sale business in the countries of the quoted currencies in regional trade (including overseas foreign-funded commercial banks, overseas branch offices of Chinese-funded banks, etc.) may, according to their business needs, apply for becoming the participating banks and quoting banks in the regional trade on the domestic inter-bank foreign exchange market, to participate in the regional trade in the corresponding currencies through the trading system of the CFETS.
Overseas participating bank and clearing banks becoming members of the inter-bank foreign exchange market upon approval and only conducting the regional trade in RMB/foreign exchange on the interbank foreign exchange market through the trading system of the CFETS shall no longer carry out the RMB purchase and sale business for the currency pair in the domestic agent bank mode.
II. Application procedures
1. Qualified overseas banks may submit their application materials to the local sub-branches of the People's Bank of China (“PBC) in the regions of the regional trade in the quoted currencies.
2. Overseas participating banks or clearing banks that have obtained the consent of the local sub-branches of the PBC and undergone the recordation formalities with the Head Office of the PBC may apply to the CFETS for membership of the interbank foreign exchange market.
3. If the application materials are complete and satisfy the statutory form requirements, the CFETS will send a notice of formal market access to the applicant, grant the institution membership of the interbank foreign exchange market, and announce it to the public through  HYPERLINK "http://www.chinamoney.com.cn" www.chinamoney.com.cn and other channels.
4. The applicant shall complete the network connection, system access, signing of an agreement, bilateral credit, and other preparations, become a participating bank and quoting bank of the regional trade on the inter-bank foreign exchange market, and participate in the regional trade in the corresponding currencies on the inter-bank foreign exchange market through the trading system of the CFETS.
III. Monitoring and management
1. Domestic quoting banks and participating banks shall confirm that trades satisfy the background authenticity requirements for the corresponding trade in goods, trade in services, and direct investment, among others. Domestic banks may check background authenticity on the basis of contracts, bills of lading, invoices, or other materials that may prove background authenticity in their possession or provided by overseas counterparty banks. The local sub-branches of the PBC may, in light of the actual circumstances, examine domestic banks' proof of authenticity requirements and other relevant materials.
2. Overseas participating banks and quoting banks in the regional trade that conduct regional trade in RMB/foreign exchange on the interbank foreign exchange market through the trading system of the CFETS shall, at the end of each trading day (no later than 8:00 Beijing time on the next day), submit the relevant information on RMB purchase and sale through the information submission page on the post-trade processing platform of the CFETS, including but not limited to the names of the parties finally purchasing or selling RMB, countries or regions, amounts, and purposes, and their domestic counterparties shall submit the “cross-border RMB purchase and sale information” through the RMB Cross-Border Payment and Receipt Management Information System (“RCPMIS”).
IV. Contact information
4009787878*1*2, 021-23165107, and 021-23165164
fx_mkt@chinamoney.com.cn
China Foreign Exchange Trade System
January 4, 2018