Circular on Issues Relevant to Improving the Management of Exchange Risks by Foreign Institutional Investors on the Interbank Bond Market
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
Foreign institutional investors are offered more channels to access the futures market
(Issued by the State Administration of Foreign Exchange on January 13, 2020 and effective as of February 1, 2020.)
(国家外汇管理局于二零二零年一月十三日发布，自二零二零年二月一日起施行。)
Hui Fa [2020] No.2
汇发［2020］2号
Branches and offices of the State Administration of Foreign Exchange of the provinces, autonomous regions and municipalities directly under the central government, the Shenzhen, Dalian, Qingdao, Xiamen and Ningbo municipal branches, the China Foreign Exchange Trade System and national Chinese-invested banks:
国家外汇管理局各省、自治区、直辖市分局、外汇管理部，深圳、大连、青岛、厦门、宁波市分局，中国外汇交易中心，全国性中资银行：
With a view to further opening the foreign exchange market to foreign investors and further facilitating the management of exchange risks on the interbank bond market by foreign institutional investors (FIIs), we, pursuant to the PRC Regulations for the Control of Foreign Exchange and relevant provisions, hereby notify you on matters relevant to the participation by FIIs in the domestic foreign exchange market as follows:
为推动外汇市场对外开放，进一步便利银行间债券市场境外机构投资者（以下简称境外投资者）管理外汇风险，根据《中华人民共和国外汇管理条例》及相关规定，现就境外投资者参与境内外汇市场有关事项通知如下：
1 . An FII may use domestic renminbi to foreign exchange derivatives (Forex Derivatives) to manage exchange risk exposures arising from investments on the interbank bond market in accordance with the hedging principle.
一、 境外投资者可以使用境内人民币对外汇衍生产品（以下简称外汇衍生品），按照套期保值原则管理投资银行间债券市场产生的外汇风险敞口。
For the purposes of this Circular, the term "FIIs" means the various types of foreign investors that satisfy the provisions of the People's Bank of China, Announcement [2016] No.3.
本通知所称境外投资者，是指符合《中国人民银行公告〔2016〕第3号》规定的各类境外投资者。
2 . A foreign bank-type investor may select at its own discretion one of the following channels to engage in Forex Derivatives trading:
二、 境外银行类投资者可以自行选择下列一种渠道开展外汇衍生品交易：
(1) directly trading with a domestic financial institution as a client;
（一）作为客户与境内金融机构直接交易。
(2) directly entering the interbank foreign exchange market to trade by applying to become a member of the China Foreign Exchange Trading System (CFETS); or
（二）申请成为中国外汇交易中心（以下简称外汇交易中心）会员直接进入银行间外汇市场交易。
(3) entering the interbank foreign exchange market to trade through a prime brokerage by applying to become a CFETS member.
（三）申请成为外汇交易中心会员通过主经纪业务进入银行间外汇市场交易。
3 . A foreign non-bank-type investor may select at its own discretion one of the following channels to engage in Forex Derivatives trading:
三、 境外非银行类投资者可以自行选择下列一种渠道开展外汇衍生品交易：
(1) directly trading with a domestic financial institution as a client; or
（一）作为客户与境内金融机构直接交易。
(2) entering the interbank foreign exchange market to trade through a prime brokerage by applying to become a CFETS member.
（二）申请成为外汇交易中心会员通过主经纪业务进入银行间外汇市场交易。
4 . An FII that opts for the first channel set forth in Article 2 or 3 hereof shall trade with not more than three domestic financial institutions and file its list of financial institutions in advance with CFETS for the record itself or through its correspondent bank. If it is to replace a financial institution, it shall file the same in advance with CFETS for the record.
四、 境外投资者选择本通知第二条、第三条所列第一种渠道的，应与不超过3家境内金融机构交易，并自行或通过结算代理行将金融机构名单事先向外汇交易中心备案；调整金融机构的，应事先向外汇交易中心备案。
5 . When engaging in Forex Derivatives trading, an FII shall abide by the following provisions:
五、 境外投资者开展外汇衍生品交易应遵照以下规定：
(1) there being a reasonable degree of correlation between its Forex Derivatives exposure and exchange risk exposure; the foreign exchange risk exposure includes the principal of a bond investment, interest and changes in market value;
（一）外汇衍生品敞口与外汇风险敞口具有合理的相关度。外汇风险敞口包括债券投资的本金、利息以及市值变化等。
(2) when a change in a bond investment occurs, resulting in a change in the foreign exchange risk exposure, an adjustment to the corresponding Forex Derivatives exposure shall be made within five working days or within five working days after the end of the month;
（二）当债券投资发生变化而导致外汇风险敞口变化时，在五个工作日内或月后五个工作日内对相应持有的外汇衍生品敞口进行调整。
(3) in line with actual foreign exchange risk management needs, trading mechanisms such as extension, reversing of positions, and gross or balance settlement may be flexibly selected and settlement of the gain or loss effected in renminbi or a foreign currency; and
（三）根据外汇风险管理的实际需要，可灵活选择展期、反向平仓、全额或差额结算等交易机制，并以人民币或外币结算损益。
(4) before engaging in Forex Derivatives trading for the first time in accordance herewith, the FII shall submit a written undertaking to the financial institution or CFETS to the effect that it will abide by the hedging principle.
（四）依据本通知首次开展外汇衍生品交易前，境外投资者应向金融机构或外汇交易中心提交遵守套期保值原则的书面承诺。
6 . If an FII opts for the first channel in Article 2 or 3 hereof and needs to open a dedicated foreign exchange account with a domestic financial institution other than its correspondent bank, it may do so on the strength of a business registration voucher specified in the State Administration of Foreign Exchange, Circular on Foreign Exchange Control Issues Relevant to the Investment on the Interbank Bond Market by Foreign Institutional Investors (Hui Fa [2016] No.12). Such account shall be used exclusively for carrying out delivery of funds, gain and loss processing, margin management, etc. in connection with the Forex Derivatives trading, and cross-border receipt and payment of funds shall be completed through the correspondent bank. Once an FII ends the Forex Derivatives trading relationship with a domestic financial institution, it shall close the dedicated foreign exchange account it opened with such institution in a timely manner.
六、 境外投资者选择本通知第二条、第三条所列第一种渠道的，如需在结算代理行以外的其他境内金融机构开立专用外汇账户，可凭《国家外汇管理局关于境外机构投资者投资银行间债券市场有关外汇管理问题的通知》（汇发〔2016〕12号）规定的业务登记凭证办理。该账户专项用于办理外汇衍生品交易项下的资金交割、损益处理、保证金管理等，跨境资金收付应通过结算代理行完成。境外投资者与境内金融机构停止外汇衍生品交易关系后，应及时关停在该机构开立的专用外汇账户。
7 . An FII that opts to enter the interbank foreign exchange market either directly or by means of a prime brokerage shall submit relevant trading information in accordance with CFETS provisions.
七、 境外投资者选择银行间外汇市场直接入市模式或主经纪模式的，应按照外汇交易中心规定报送有关交易信息。
8 . A domestic financial institution that handles business for an FII in accordance with the first channel specified in Article 2 or 3 hereof shall abide by the following provisions:
八、 境内金融机构依照本通知第二条、第三条所列第一种渠道为境外投资者办理业务的，应遵照以下规定：
(1) submitting information on the FII's Forex Derivatives trading on a daily basis in accordance with CFETS provisions;
（一）按照外汇交易中心规定每日报送境外投资者外汇衍生品交易信息。
(2) performing its obligations of submitting statistics and reports on its customer Forex Derivatives business to the exchange bureau; and
（二）作为对客户外汇衍生品业务向外汇局履行统计和报告义务。
(3) if it uses a third-party trading system, platform or facilities other than its own internal trading system, complying with relevant provisions of the People's Bank of China.
（三）若使用本机构内部交易系统以外的第三方交易系统、平台或设施，应符合中国人民银行的有关规定。
9 . CFETS shall, in accordance with the requirements hereof, duly carry out market services such as FII transaction counterparty record filing, member market entry, prime brokerage business and data collection, as well as technical support work.
九、 外汇交易中心应按本通知要求，做好境外投资者交易对手备案、会员入市、主经纪业务和数据采集等市场服务和技术保障工作。
10 . If an FII or domestic financial institution violates this Circular, the State Administration of Foreign Exchange will take the attendant regulatory measures in accordance with the law.
十、 境外投资者和境内金融机构违反本通知规定，国家外汇管理局将依法采取相应的监管措施。
11 . This Circular shall be effective as of February 1, 2020. The State Administration of Foreign Exchange, Circular on Issues Relevant to Control of the Foreign Exchange Risks of Foreign Institutional Investors on the Interbank Bond Market (Hui Fa [2017] No.5) shall be repealed simultaneously. In the event of a discrepancy between this Circular and previous provisions, this Circular shall prevail.
十一、 本通知自2020年2月1日起实施。《国家外汇管理局关于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〔2017〕5号）同时废止。此前规定与本通知不一致的，以本通知为准。
Upon receipt of this Circular, branches and offices of the State Administration of Foreign Exchange are asked to forward it to relevant financial institutions in their jurisdictions in a timely manner.
clp reference: 3700/20.01.13 issued:2020-01-13 effective:2020-02-01国家外汇管理局各分局、外汇管理部接到本通知后，请及时转发辖内有关金融机构。
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