SAFE Deputy Administrator and Press Spokesperson Wang Chunying Answers…

Title: SAFE Deputy Administrator and Press Spokesperson Wang Chunying Answers Media Questions on the Guidelines for Interbank Foreign Exchange Market Makers

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). The SAFE deputy administrator and press spokesperson Wang Chunying answered media questions on the Guidelines.

01

Q: In what context is the Guidelines amended?

A: As an important supporting measure of the reform of the renminbi exchange rate regime in 2005,the market maker system was established by the SAFE for the interbank foreign exchange market. To adapt to market developments,the system was amended in 2010 and 2013 respectively.

At present,market makers have become important participants in China’s foreign exchange market,making positive contributions to the stability of market. As the two-way opening-up of the financial market is advanced,it is pressing to further improve the market maker system. Therefore,on the basis of adequate surveys and opinions extensively solicited,the SAFE has amended the Guidelines again,with a view to improving the quality of market-based quotations and regulating trading behaviors to further boost the orderly development of the foreign exchange market.

02

Q: What are the highlights of this amendment?

A: The highlights of the amendment are as follows: encouraging dynamic competition,building a sound system of rewards and penalties,maintaining stability of scale,formulating transparent standards,and creating an open and fair environment.

First,optimizing the structure of market makers. To give full play to the advantages of integrated market makers,market makers will no longer be divided by products and will be encouraged to strengthen their capabilities of comprehensive product trading and market making.

Second,streamlining administrative approvals and delegating powers. The access and exist administration of trial market makers will be delegated to the China Foreign Excha