In order to improve the norms of conduct in the foreign exchange market, the State Administration of Foreign Exchange (SAFE) recently issued the Guidelines on Code of Conduct for the Foreign Exchange Market (Huifa No. 34 [2021], hereinafter referred to as the Guidelines), with the aim of promoting honest, fair, orderly and efficient operation of the foreign exchange market.

The main contents of the Guidelines are as follows. First, it applies to the interbank market and the over-the-counter (OTC) market. Second, the subjects of this regulation are defined as all parties involved in the foreign exchange market, including institutions engaging in foreign exchange transactions, China Foreign Exchange Trade System, Shanghai Clearing House, and the money brokers. Third, the Guidelines focus on regulating the transaction behavior of the foreign exchange market, and the core content is transaction management and information management. Fourth, a one-year transition period will be set up for banks and other financial institutions when customers conduct OTC foreign exchange transactions.

The Guidelines will take effect on January 1, 2022. (End)