Ad hoc Survey on Renminbi (“RMB”) Trade Settlement Business

Ad hoc Survey on Renminbi (“RMB”) Trade Settlement Business Supplementary Information on Renminbi Business Renminbi Trade Settlement Completion Instructions Introduction 1. The People’s Bank of China together with other Mainland bureaus promulgated on 1 July 12009 the rules on settlement of cross-border trades in renminbi (RMB). As a result all authorized institutions (AIs) may conduct RMB trade settlement business subject to the 2relevant requirements, while the existing RMB business targeting personal customers and Designated Business Merchants remain restricted to licensed banks only. 2. The HKMA is revising the Return of Renminbi Business Activities (MA(BS)16). In the future, all AIs (instead of only licensed banks as currently required) will need to submit the revised return to report RMB business data. In the meantime, this template is used temporarily to collect information on the new RMB business. General instructions 3. This template mainly captures information on RMB Trade Settlement business and other newly allowed RMB-denominated transactions (such as RMB interbank money market transactions) conducted by AIs. All AIs should complete this template starting from the position of July 2009. In addition, all licensed banks should continue to submit the return MA(BS)16 until further notice to be given by the HKMA. For this group, it should be noted that some data will need to be reported in both the template and the current version of return MA(BS)16. A table of data reconciliation is provided at Annex. 4. Unless otherwise agreed with the HKMA, AIs should submit the completed template via STET monthly no later than 21 days after the last day of each calendar month. If the submission deadline falls on a public holiday, it will be deferred to the next working day. 5. The information collected in this template should cover the position of AIs’ Hong Kong office(s) only. AIs need not incorporate the position of their renminbi-denominated activities undertaken outside Hong Kong (e.g. on the Mainland where they may have operations). 6. Report all transactions on a trade date basis. That means transactions should be accounted for in this template on the same day when the transactions are conducted regardless of the actual settlement day. Specific instructions Part A: Standing information 1 《跨境貿易人民幣結算試點管理辦法》(Also see《跨境貿易人民幣結算試點管理辦法實施細則》promulgated by the PBoC on 3 July 2009.） 2 For details, see the HKMA’s circular of 6 July 2009. Page 1 of 6 7. AIs should indicate whether they have entered into the Agreement for Clearing and Settlement of Renminbi Trade Settlement Business with the RMB Clearing Bank or any correspondent bank agreements with Mainland banks (Mainland Correspondent Banks) for conducting RMB trade settlement business, and if so, provide the relevant information. If an AI has not entered into any of these agreements, there is no need for it to complete Part B to Part G. Part B: RMB balance sheet (selected items as at the last day of the reporting month) Item 1 – Deposits from RMB Trade Settlement Enterprises (TSE) 8. Report the outstanding RMB deposits taken from TSE located in Hong Kong, in Mainland China and in other places respectively. Breakdown by “Current Account Deposits”, “Savings Deposits” and “Time Deposits” is required. Items 2 and 5 – Due to / from banks 9. Break down the RMB amounts due to (item 2) and due from (item 5) banks as indicated. For the avoidance of doubt, item 5.1a should reflect the balance of RMB settlement account opened by the AI with the RMB Clearing Bank, while item 5.3a should reflect the aggregate balance of RMB settlement accounts opened by the AI with Mainland Correspondent Banks. Item 3 – Other liabilities 10. Break down the amounts of other liabilities as indicated. In particular, on-balance sheet liabilities arising from RMB trade settlement activities (including trade financing) should be reported under item 3.1. Item 6 – Loans and advances to TSE for RMB trade settlement 11. Report the RMB-denominated loans and advances to TSE for RMB trade settlement, with breakdown by the location of TSE. The reporting criteria are in line with those in the Completion Instructions for the Return of Assets and Liabilities (MA(BS)1). In particular, interest in suspense should be netted off against the corresponding loan accounts where accrued interest has been capitalised. Do not deduct impairment allowance for problem loans. Item 7 – Other assets 12. Break down the amounts of other assets as indicated. In particular, on-balance sheet assets generated from RMB trade settlement activities (other than loans and advances to TSE) should be reported in item 7.1. Items 8 and 9 – Contingent liabilities / claims related to RMB trade finance 13. Report the contingent liabilities and claims arising from the provision of RMB trade settlement services or trade financing. For reference, see Part VIII of the Completion Instructions of the return MA(BS)1. Page 2 of 6 Part C: Foreign exchange transactions with TSE during the reporting month 14. Report the statistics on foreign exchange transactions with TSE during the reporting month. The exchange transactions should be reported from the customers’ perspective. For the avoidance of doubt, transactions “not through RMB accounts” means RMB banknote exchange transactions. Part D: Remittance transactions for TSE during the reporting month 15. Report the statistics on RMB remittance activities conducted for TSE during the reporting month. Break down into inward and outward remittances through the RMB Clearing Bank and the Mainland Correspondent Banks respectively. Unsuccessful remittances (e.g. transactions rejected by the RMB Clearing Bank or Mainland Correspondent Banks) need not be reported. 16. For the avoidance of doubt, if an AI has engaged more than one Mainland Correspondent Bank for conducting RMB trade settlement, the transactions with all Mainland Correspondent Banks should be aggregated for reporting. (The same approach should also be adopted for reporting Part G items 1 and 2). Part E: Cheque clearing for TSE during the reporting month 17. Report the total number and value of RMB cheques issued by the AI’s TSE customers and received from other Participating AIs in Hong Kong for clearing during the reporting month. Part F: Quality of RMB trade finance assets 18. Report information on the credit quality of RMB trade finance assets, including loans and advances to TSE (referring to item 6 in Part B) and other trade finance assets (referring to item 7.1 in Part B), with breakdown as indicated. The reporting criteria should be in line with those in the Completion Instructions for the Return of Loans and Advances and Provisions (MA(BS)2A.). Part G: Memorandum Items 19. In item 1(a), report the open position limit(s) obtained from the People’s Bank of China via the RMB Clearing Bank and Mainland Correspondent Banks respectively. 20. In item 1(b), report the largest day-end RMB open position during the month arising from all RMB businesses (including the business targeting personal customers, Designated Business Merchants and TSE where applicable) during the reporting period. 21. Report in item 1(c) the date on which the largest day-end RMB open position was observed. “Open position” in this context is the difference between total RMB assets and total RMB liabilities arising from activities conducted under the RMB business scheme (but excluding, if any, the assets and liabilities arising from RMB credit card business). It is the open position recorded by the AI immediately after the cut-off time specified by the RMB Page 3 of 6 Clearing Bank and Mainland Correspondent Banks respectively as the latest time during a business day for Participating AIs to square their RMB positions with the RMB Clearing Bank or Mainland Correspondent Banks, as the case may be. Any open position arising from transactions that a Participating AI enters into thereafter will be taken into account for calculating the open position for the next cut-off time. 22. In items 2(a) and 2(b), report the gross amount of RMB bought from and sold to the RMB Clearing Bank and Mainland Correspondent Banks respectively during the reporting month. For RMB bought from and sold to the RMB Clearing Bank, provide the breakdown as indicated. 23. Report the following average day-end figures to reflect the AI’s average position for all calendar days (not only business days) during the month. 3(a) RMB cash (referring to item 4 in Part B) 3(b) Balance of settlement account opened with RMB Clearing Bank (referring to item 5.1a in Part B) 3(c) Balance of settlement accounts opened with Mainland Correspondent Banks (referring to item 5.3a in Part B) 3(d) RMB deposits (taken from all customers, including personal customers, Designated Business Merchants and TSE where applicable) 3(e) Total interbank funding in RMB (referring to the total of items 2.1, 2.2 and 2.3 in Part B) and 3(f) Trade finance liabilities in RMB (referring to item 3.1 in Part B) 24. Report in item 3(g) the daily average ratio as indicated, and report in item 3(g)(1) the lowest day-end ratio during the reporting month. Indicate under item 3(g)(2) the number of calendar days during the reporting month on which the day-end ratio is below 25%. 25. Also report in item 3(h) the daily average ratio as indicated, and report in item 3(h)(1) the lowest day-end ratio during the reporting month. Indicate under item 3(h)(2) the number of calendar days during the reporting month on which the day-end ratio is below 25%. 26. In item 3(i), report the number of calendar days during the reporting month on which the day-end aggregate balance of interbank funding in RMB obtained from RMB Clearing Bank, Participating AIs in Hong Kong and Mainland Correspondent Banks exceeded the balance of total RMB deposits taken from all customers. 27. For the purpose of reporting of items 3(a) to 3(i), the relevant data should be reported on a gross basis. For example, the day-end balances of “due to” and “due from” in respect of the same counterparty should not be netted off unless otherwise agreed by the HKMA. Hong Kong Monetary Authority July 2009 Page 4 of 6 Annex: Reconciliation of data to be reported in the current version of return MA(BS)16 and this template Items to be reported in this template Corresponding items in the current version of Return MA(BS)16 Part B Part A 1. Deposits from TSE (No need to report) 2. Due to banks 4 Due to banks 2.1 RMB Clearing Bank o/w RMB Clearing Bank (note) Other categories are revised as below: Other categories include: - Participating AIs in Hong Kong - Other AIs in HK - Mainland Correspondent Banks - Own branches or subsidiary banks in Mainland - Other banks China - Other banks in Mainland China 3 Other liabilities 5 Other liabilities 3.1 Trade finance liabilities (No need to report) 3.2 Others Actual amount 3.3 Balancing figures Balancing figures 4 RMB cash 8 RMB Cash 5 Due from banks 10 Due from banks 5.1 RMB Clearing Bank RMB Clearing Bank (note) Other categories are revised as below: Other categories are as below: - Participating AIs in Hong Kong - Other AIs in HK - Mainland Correspondent Banks - Own branches or subsidiary banks in Mainland - Other banks China - Other banks in Mainland China 6 Loans and advances to TSE for RMB (No need to report) trade settlement 7 Other assets 14 Other assets 7.1 Trade finance assets other than loans and (No need to report) advances to TSE 7.2 Others Actual Amount 7.3 Balancing figure Balancing figure 8 Contingent liabilities related to RMB (No need to report) trade finance 9 Contingent assets related to RMB trade (No need to report) finance Part C to Part F (No need to report) Part G Part G 1 (a) RMB open position limit 1(a) (No need to report RMB open position limit obtained - RMB Clearing Bank from Mainland Correspondent Banks) - Mainland Correspondent Banks (b) Largest day-end RMB open position 1(b) during the reporting month Page 5 of 6 Items to be reported in this template Corresponding items in the current version of Return MA(BS)16 (c) Date of the largest day-end RMB open 1(b) position 2 Foreign exchange transactions during the reporting month (a) Gross amount of RMB bought from 1(c) (No need to report the amount of RMB bought from - RMB Clearing Bank Mainland Correspondent Banks) - Mainland Correspondent Bank (b) Gross amount of RMB sold to 1(c) (No need to report the amount of RMB sold to - RMB Clearing Bank Mainland Correspondent Banks) - Mainland Correspondent Bank 3 (a) Average day-end balance of RMB cash during the reporting month 6(a) (Separated into item 3(a) and 3(b) in the Template) (b) Average day-end balance of settlement account opened with Clearing Bank during the reporting month (c) Average day-end balance of settlement (No need to report) account opened with Mainland Correspondent Banks during the reporting month (d) Average day-end balance of RMB 6(b) deposits during the reporting month (e) Average day-end balance of total (No need to report) interbank funding in RMB during the reporting month (f) Average day-end balance of trade (No need to report) finance liabilities in RMB during the reporting month (g) Daily average ratio ---- (a+b)/d 6(c) (g)(1) Lowest day-end ratio during the 6(d) reporting month (g)(2) Number of calendar days during the 6(e) reporting month on which the day-end ratio was below 25% (h) Daily average ratio ---- (a+b+c)/(d+e+f) (No need to report) (h)(1) Lowest day-end ratio during the (No need to report) reporting month (h)(2) Number of calendar days during the (No need to report) reporting month on which the day-end ratio was below 25% (i) Number of calendar days during the (No need to report) reporting month on which total interbank funding in RMB exceeded total RMB deposits Page 6 of 6