State Administration of Foreign Exchange, Circular on Issues Relevant to the Trading of Renminbi to Foreign Currency Options

国家外汇管理局关于人民币对外汇期权交易有关问题的通知

China launches trading of renminbi to foreign currency options.

Clp Reference: 3700/11.02.14 Promulgated: 2011-02-14 Effective: 2011-04-01

Issued: February 14 2011


Effective: April 1 2011

Interpreting authority: State Administration of Foreign Exchange

Applicability: The term “options” refers to the ordinary European-style renminbi-foreign currency options (Article 1).

Main contents: To provide options services for clients, banks shall fulfil the following criteria:

(1) having obtained the qualifications for the business of forward conversion and sale of foreign exchange for three years or more, and having received a B or higher grade for assessment of its enforcement of foreign exchange control for two consecutive years;

(2) having the relevant experience in trading foreign currency to foreign currency options; and

(3) having sound systems for risk management of options trading and internal control, as well as the appropriate risk measurement, management and trading systems (Article 2).

Banks may only purchase put or call options for clients and may not sell an option, except for unwinding the purchased options (Article 5).

clp reference:3700/11.02.14promulgated:2011-02-14effective:2011-04-01

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