People's Bank of China, Circular on Matters Relevant to the Entry of Money Brokers into the Interbank Market

Issued: July 6 2006

Effective: as of date of issue

Main contents: Money brokers shall, prior to entering the interbank market to engage in brokerage business, report to the People's Bank of China for the record (Article 2). The person in charge of a money broker's brokerage business department shall have at least five years of work experience in the financial market, and brokers shall have at least two years of work experience in the financial market (Article 3). The scope of business engaged in by money brokers in the interbank market shall include entrustment by financial institutional investors with the provision of brokerage services such as cash bond trading, repurchase of bonds, re-discounting of negotiable instruments, repurchase of negotiable instruments, bond forward trading, renminbi interest rate swap trading and interbank borrowing (Article 4). Where a transaction has not materialized, a money broker may not request payment of commission from the client, but may request payment from the client on the necessary expenses incurred in providing brokerage services (Article 6).