|Chinese to English: 中国人民银行外汇一级交易商准入指引 |
|Source text - Chinese|
|Translation - English|
Guidance on Access of Primary Foreign Exchange Dealers of the PBOC
June 2, 2006
Article 1 In order to carry out effectively the monetary policy and keep RMB exchange rate basically stable on the whole at a reasonable and balanced level, this Guidance is formulated according to the PRC Law of the PBOC.
Article 2 "Primary foreign exchange dealer of the PBOC" (hereinafter referred to as "Primary foreign exchange dealer") herein means a designated foreign exchange bank that is appointed by the PBOC for undertaking foreign exchange transactions with the People's Republic of China (the "PBOC"), which perform the obligations of market making in the inter-bank foreign exchange market.
Article 3 "Foreign exchange transaction" herein means a foreign exchange transaction between the PBOC and a primary foreign exchange dealer.
Article 4 The Open-market Operation Office of the PBOC shall take charge of the administration of primary foreign exchange dealers and their transactions.
Article 5 The PBOC shall not publish the information including the list of primary foreign exchange dealers and the transactions with primary foreign exchange dealers.
Article 6 A financial institution may apply to the PBOC for the qualification as a primary foreign exchange dealer if it meets all the following conditions:
(1) being a designated foreign exchange bank;
(2) abiding by the relevant state economic and financial laws and regulations and other relevant regulations of the PBOC;
(3) meeting all requirements of regulatory indexes required by regulatory authorities;
(4) meeting the requirements of credit rating required by the PBOC;
(5) top ranking in the inter-bank foreign exchange market in terms of volume foreign exchange transactions of the previous fiscal year; and
(6) being able to and promising to perform all the obligations of a primary foreign exchange dealer.
Article 7 The rights of a primary foreign exchange dealer shall include:
(1) Acting as a counterpart of the PBOC in foreign exchange transactions;
(2) Other rights specified by the PBOC.
Article 8 Obligations of a primary foreign exchange dealer shall include:
(1) Engaging in foreign exchange transactions in good faith and offering best quotations;
(2) Not manipulating market prices;
(3) Ensuring the time efficiency and accuracy of the work relating to foreign exchange;
(4) Having professional personnel as required by the PBOC and corresponding technological conditions;
(5) Adhering to the confidential regulations of the PBOC on primary foreign exchange dealers;
(6) Keeping in contact with the PBOC and promptly reporting to it major outburst events;
(7) Reporting to the PBOC the information on the amount of the sale and purchase of foreign exchange, and analysis report; and
(8) Performing the obligations of market making in the inter-bank foreign exchange market.
Article 9 The PBOC shall assess the performance of the obligations of primary foreign exchange dealers. The content of such assessment shall include quotations, delivery and settlements and other relevant conducts of primary foreign exchange dealers, as well as the quality and time efficiency of the information reported. If any primary foreign exchange dealer is found disqualified through such assessment, the PBOC will require it to make improvement and undergo a reassessment 6 months later, while in case of a failure in such reassessment, its qualification as a primary foreign exchange dealer shall be cancelled.
Article 10 The qualification of a primary foreign exchange dealer shall be suspended or cancelled by the PBOC if it is found in violation of this Guidance according to the degree of such violation.
Article 11 A financial institution whose qualification as a primary foreign exchange dealer is suspended shall no longer enjoy the rights under Article 7 before its qualification is resumed, while it shall continue performing its obligations that have not been fulfilled.
Article 12 A financial institution whose qualification as a primary foreign exchange dealer has been cancelled shall not enjoy the rights under Article 7, while it shall continue performing the obligations that are not fulfilled.
Article 13 If the business license of a financial institution is revoked by the competent authority, its qualifications as a primary foreign exchange dealer and the relevant rights shall automatically terminate.
Article 14 A financial institution whose qualification as a primary foreign exchange dealer has been cancelled or has been automatically abandoned shall not apply for such qualification within two years in principle.
Article 15 In case of modification of name of an institution and merger of a primary foreign exchange dealer, such modification and merger shall be reported to the PBOC for handling of the procedure of qualification modification.
Article 16 The interpretation and amendment of this Guidance shall be vested with the PBOC.
Article 17 This Guidance becomes effective on the date of its promulgation.