China Foreign Exchange Trade System, Circular on Launching the Prime Brokerage Business on the Interbank Foreign Exchange Market

中国外汇交易中心关于在银行间外汇市场推出主经纪业务的通知

July 24, 2020 | BY

Susan Mok

The interbank foreign exchange market launches prime brokerage business

Clp Reference: 3700/20.05.27 Promulgated: 2020-05-27
|

Issued: May 27, 2020

Main contents: A domestic renminbi/foreign exchange market maker may file with the China Foreign Exchange Trade System (CFETS) to become a renminbi/foreign exchange prime broker; a G10 currency pairs market maker or member may file with CFETS to become a G10 currency pairs prime broker.

Under the interbank bond market direct investment model (CIBM-Direct), a foreign investor complying with the People's Bank of China, Announcement [2016] No.3 and other relevant regulatory provisions may apply to become an interbank foreign exchange market member. A foreign non-bank member or a foreign banking member that opts for the prime brokerage business to enter the market shall be required to file with CFETS to become a prime broker client. An interbank G10 currency pairs market maker or member may file with CFETS to become a prime broker client.

A prime broker client of the renminbi/foreign exchange market may, as a taker under the request for quote model (RFQ), engage in the trading of foreign exchange derivatives such as forwards and swaps based on the hedging against risks relating to investments in interbank bonds.

A prime broker client of the G10 currency pairs market may, as a maker or a taker under the matching model (ODM) or the over-the-counter trading model (including RFQ and ESP), participate in the trading of derivatives such as G10 currency pair spots, forwards and swaps (Article 2).

clp reference:3700/20.05.27 issued:2020-05-27

This premium content is reserved for
China Law & Practice Subscribers.

  • A database of over 3,000 essential documents including key PRC legislation translated into English
  • A choice of newsletters to alert you to changes affecting your business including sector specific updates
  • Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
For enterprise-wide or corporate enquiries, please contact our experienced Sales Professionals at +44 (0)203 868 7546 or [email protected]