|
Introduction
This is a service of ICBC partner banks for their customers to buy/sell different currencies for immediate delivery using ICBC price quotes, background trading and clearing system. To enable the service, ICBC system is connected to the partner bank's system.
The service allows ICBC partner banks to expand business scope and enrich product lines, offering more services to meet the demand of customers to trade FX. Partner banks have more room to grow and make profit.
Target Client
Banks and their subsidiaries established under corporate laws in China (excluding Hong Kong, Macau and Taiwan) and approved under China Banking Regulatory Commission to offer the service.
Advantages
(I) Different currencies: 9 currencies (including US dollar, Japanese yen, HK dollar, British pound, Euro dollar, Canadian dollar) and 36 currency pairs available for customers to choose from.
(II) Many options: Besides buying or selling foreign currency "on the spot", customers can place orders - profit making order or stop-loss order.
(III)Good price: Being one of the most influential participants in international interbank FX market, ICBC offers good prices for customers.
(IV) Fast, stable trading system: ICBC offers fast, highly efficient transaction processing for partner banks backed by strong FX trading system and experienced staff.
Cases
A customer of partner bank holds a large sum of US dollar. The customer wishes to convert the US amount to Euro dollar for goods payment. Customer sends instruction to partner bank to exchange EUR 1 million at a rate of EUR 1 for USD 1.4, quoted by ICBC. ICBC receives the instruction from partner bank, deducts USD 1.4 million from partner bank's account and pays EUR 1 million. Partner bank collects a certain percentage of revenue based on the FX amounts bought and sold.
Application Conditions
Once an intention is reached with ICBC to offer the service, partner bank must provide photocopies of business license, financial institution permit, and application report submitted to China Banking Regulatory Commission. ICBC will check out the documentation provided.
Steps
(I) Sign agreement: Before the opening of the service, partner bank must sign with ICBC the ICBC Cooperation Agreement on XX Service.
(II)Develop interface: Partner bank sets up a project group to understand the related services and system, works with ICBC on the service channel for customers to trade foreign currencies using the interface provided by ICBC.
Service Channel and Hours
ICBC FX spot trading hours:
Personal customers 7:00 am (Monday) - 4:00 am (Saturday)
Corporate clients 8:30-17:30 each working day
Operation Guidelines
(I) Price quotes: During trading hours, partner bank uses the price quotes in ICBC system through Bank-Bank platform, adds a certain pip spread and quotes the price to customers.
(II) Customer application
1. Spot trades: The customer of partner bank starts the spot FX trade at partner bank's system, submits the currencies and amount. ICBC receives the instruction from partner bank and automatically deducts the FX amount sold from the clearing account of partner bank opened in ICBC. After the deal is closed, ICBC transfers the FX amount bought into clearing account of partner bank opened in ICBC. ICBC sends the transaction result to partner bank in real-time.
2. Place order: ICBC receives the instruction from partner bank, freezes the respective FX amount in the clearing account of partner bank opened in ICBC and adds a record in ICBC system. After the deal is closed, ICBC automatically deducts the FX amount sold from the frozen clearing account and transfers the FX amount bought into the clearing account of partner bank. ICBC sends the transaction result to partner bank in real-time. The frozen amount will be automatically released if the order is not closed upon expiry.
3. Cancel order: ICBC receives the cancellation instruction from partner bank and checks the order record matched with instruction. If the order is not yet closed, ICBC system cancels the record, automatically unfreezes the amount in the clearing account of partner bank and sends a message to partner bank that the cancellation is successful. If the order is closed, ICBC sends a message to partner bank that the cancellation is unsuccessful.
Risk Disclosure
Partner bank may incur risks - prices deviated from the normal market prices or unable to provide normal trading services resulting from overdraft in clearing account, data transmission failure or system stability, customer complaint or negative impact due to improper promotion or handling.
|
