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Rules and Regulations
  • Index number:
    000014453-2018-00264
  • Dispatch date:
    2018-02-13
  • Publish organization:
    State Administration of Foreign Exchange
  • Exchange Reference number:
  • Name:
    Circular of the State Administration of Foreign Exchange on Improving Foreign Exchange Administration for Forward Foreign Exchange Sales and Settlements
Circular of the State Administration of Foreign Exchange on Improving Foreign Exchange Administration for Forward Foreign Exchange Sales and Settlements

The branches and foreign exchange administrative departments of the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, and the branches of the SAFE in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; and national Chinese-funded banks:

To deepen the development of the foreign exchange market to better serve the real economy, issues related to the improvement of foreign exchange administration for forward foreign exchange sales and settlement are notified as follows:

I. When providing forward foreign exchange sales and settlement services for clients, banks may choose gross or net settlement as a way of delivery based on the needs for hedging and actual demand. Net settlement shall be made in RMB. The reference price used to determine the net amount shall be the real-time and effective exchange rate in the domestic market.

II. The forward foreign exchange sales and settlement for clients through netting delivery shall be subject to the management of comprehensive positions in foreign exchange settlement and sales and related statements shall be submitted in accordance with the Circular of the General Affairs Department of the State Administration of Foreign Exchange on Adjusting Statistical Statements on Banks' Foreign Exchange Settlement and Sales (Huizongfa No. 4 [2017]).

III. Banks shall enhance business innovations and management, and actively support clients to ensure sound management of risks associated with foreign exchange, while improving risk education to clients, and guiding them to establish the philosophy of risk neutrality, so as to handle foreign exchange derivatives rationally and prudentially.

IV. This Circular will come into effect as of the date of issuance. In case of any discrepancies with previous regulations, this Circular shall prevail.

Upon receipt, the branches and foreign exchange administrative departments of the SAFE shall timely forward it to the relevant financial institutions within their respective jurisdictions.

 

State Administration of Foreign Exchange

February 12, 2018





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