The branches and foreign exchange management departments under the State Administration of Foreign Exchange (SAFE) in all provinces, autonomous regions, and municipalities directly under the Central Government, the branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; all the polic
y banks, state-owned commercial banks, and joint stock commercial banks,
For the purpose of meeting the demand for the development of foreign exchange market, promoting designated foreign exchange banks to perfect exchange rate risk prevention mechanism, the SAFE determines to adjust the policies for the administration of synthetic positions in the settlement and sale o
f foreign exchange of designated foreign exchange banks, and hereby makes the following notice concerning the relevant issues:
I. From July 1, 2006, SAFE shall manage the synthetic positions in the settlement and sale of foreign exchange of designated foreign exchange banks (hereinafter referred to as the banks) on the accrual basis.
II. The principle of position administration on the accrual basis as mentioned in this Circular shall mean that a bank provides the business of settlement and sale of foreign exchange to its clients, business of settlement and sale of foreign exchange of its own, and the inter-bank foreign exchange
market transactions reckoned into the synthetic positions in the settlement and sale at the day when the transaction is concluded.
The principle of position administration on cash-basis accounting shall mean that a bank provides the business of settlement and sale of foreign exchange to its clients, business of settlement and sale of foreign exchange of its own, and the inter-bank foreign exchange market transaction reckoned i
nto the synthetic positions in settlement and sale at the day when the capital is actually received and paid.
III. After the implementation of the principle of position administration on the accrual basis, in light of the actual situations of the business of settlement and sale of foreign exchange of the bank itself and the inter-bank foreign exchange market transactions, and according to the requirements
of the statements in the Form of Daily Report on Synthetic Positions in the Settlement and Sale of Foreign Exchange (See Annex II), a bank shall accurately calculate the synthetic positions of the settlement and sale of foreign exchange of the bank itself, and submit the new Form of Daily Report on
Synthetic Positions in the Settlement and Sale of Foreign Exchange (See Annex I) to the SAFE or its branch administrations. The Form of Daily Report on Synthetic Positions in Settlement and Sale of Foreign Exchange is annexed to the Notice of the State Administration of Foreign Exchange on Adjusting
the Measures for the Administration of Positions in the Settlement and Sale of Foreign Exchange of Banks (Hui Fa [2005] No.69, hereinafter referred to as Hui Fa No.69) shall be abolished.
IV. A bank shall submit the Form of Daily Report on Synthetic Positions in the Settlement and Sale of Foreign Exchange to SAFE and its branch administrations according to the following requirements:
1. The Form of Daily Report on Synthetic Positions in the Settlement and Sale of Foreign Exchange of the policy banks, national commercial banks, and the market makers of the inter-bank foreign exchange market shall be reported to SAFE respectively by fax and email before 10 o'clock in the morning
of the second work day (The electronic documents shall be made in the form of EXCEL). Fax: 010－68402303;Email: yinhangchu@mail.safe.gov.cn.
2. The specific time and ways for submission of the Form of Daily Report on Synthetic Positions in the Settlement and Sale of Foreign Exchange by urban commercial banks, rural commercial banks, rural cooperative financial institutions, and foreign-funded banks shall follow the requirements of the b
ranches of the SAFE at their localities.
V. Adjustment shall be made on the Form of Information on Synthetic Positions in the Settlement and Sale of Foreign Exchange of Designated Foreign Exchange Banks, which is submitted to the SAFE by each branch of SAFE (including foreign exchange management department, the same hereinafter). Each bra
nch of SAFE shall fill in the form and make a report according to the new design of the statements (See Annex III) from the day when this Circular is implemented, and the ways and time for submission shall remain unchanged.
VI. The limit of synthetic positions in the settlement and sale of foreign exchange of a bank, which is verified by SAFE or its branches before the implementation of this Circular, shall continue to be effective. All banks shall do a good job for the administration of the limit of synthetic positio
ns in the settlement and sale of foreign exchange of their own banks according to the provisions of the Document No.69 of SAFE. Except for the relevant matters subject to the adjustment of administration on synthetic positions in the settlement and sale of foreign exchange, for other matters the Doc
ument No.69 of SAFE and the Notice of the Comprehensive Department of State Administration of Foreign Exchange on Relevant Matters concerning Verification of the Limit of Synthetic Positions in the Settlement and Sale of Foreign Exchange of Banks (Hui Zong Fa [2005] No.118) shall continue to be foll
owed.
VII. After receiving this Circular, each branch of SAFE shall forward it at once to the urban commercial banks, rural commercial banks, rural cooperative financial institutions, and foreign-funded banks within its own jurisdiction.
If any problem is encountered in the implementation, please contact with the Department of International Balance of SAFE.
Contact Telephone: 010-68402385, 68402447.
Annex I: (_____Bank) the Form of Daily Report on Synthetic Positions in the Settlement and Sale of Foreign Exchange (omitted)
Annex II: the Explanation of the Form of Daily Report on Synthetic Positions in the Settlement and Sale of Foreign Exchange (omitted)
Annex III: the Form of Information on Synthetic Positions in the Settlement and Sale of Foreign Exchange of Designated Foreign Exchange Banks (omitted)
State Administration of Foreign Exchange
June 2, 2006 |
