To promote the sustainable development of the foreign exchange market, the State Administration of Foreign Exchange (SAFE) has recently released the Circular of the State Administration of Foreign Exchange on Amending the Guidelines for Interbank Foreign Exchange Market Makers (Huifa No.1 [2021], hereinafter referred to as the Guidelines), further improving the interbank foreign exchange market maker system.

The following amendments are made to the Guidelines: first, optimizing the structure of market makers to give full play to the advantages of integrated market makers, and stopping dividing market makers by products. Second, streamlining administrative approvals and delegating the power of access and exit administration of trial market makers to China Foreign Exchange Trade System (CFETS) to diversify market quoting institutions. Third, regulating market making behaviors and guiding market markers to reduce their reliance on trading volumes and focus on the improvement of quoting quality and the provision of liquidity. Fourth, defining the legal obligations of market makers to raise their awareness of lawfully engaging in market making business and serving the real economy.

The SAFE will continue to follow the decisions and arrangements made by the CPC Central Committee and the State Council and deepen foreign exchange market reforms to better serve the real economy and support the two-way opening-up of financial markets. (END)