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Notice
  • Index number:
    000014453-2018-0107
  • Dispatch date:
    2018-09-14
  • Publish organization:
    State Administration of Foreign Exchange
  • Exchange Reference number:
  • Name:
    Guarding Against Foreign Exchange Margin Risk and Preventing Property Loss
Guarding Against Foreign Exchange Margin Risk and Preventing Property Loss

The People's Bank of China, the Ministry of Public Security of the PRC and the State Administration of Foreign Exchange issued the following reminder:

Recently, some online platforms have been illegally engaged in foreign exchange margin transactions (also called foreign exchange security deposit, generally referring to such circumstance where customers invest in a certain amount of funds as deposit and conduct foreign exchange transactions within expanded investment amount at a certain leverage multiple), which has severely disrupted the financial order, resulted in property loss of the social public, causing adverse impacts and engendering serious potential risks:

I. So far, the People's Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission as well as the State Administration of Foreign Exchange and its branches haven't approved any institution to engage in foreign exchange margin business either directly or on an agency basis.

II. In accordance with the Circular on Sternly Investigating and Punishing Illegal Foreign Exchange Futures Transactions and Foreign Exchange Margin Trading Activities (Zhengjianfazi No. 165 [1994]), any unauthorized transaction of foreign exchange margin by an unapproved institution is illegal; it is also an offence for a client (organization or individual) to entrust an unapproved institution to conduct foreign exchange margin transactions (whether in foreign currency or renminbi as security deposit).

III. The public should be fully aware of the risks involved in foreign exchange margin activities, improve risk prevention awareness and ability, and guard against property losses caused by illegal transactions.

IV. The general public should actively report to the relevant authorities if they find clues of illegal and criminal activities.


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