In accordance with the Circular of the SAFE on Improvingthe Management of Foreign Exchange Risk for Foreign Institutional Investors in the Interbank Bond Market (Huifa No. 2 [2020])[1], China Foreign Exchange Trade System (“CFETS”) has improved the arrangements for foreign institutional investors (“foreign investors”)who participate in foreign exchange markets through the China Interbank Bond Market (CIBM Direct). The details areas follows:

I.           Entryinto Interbank FX Market

1.         Qualification Requirements

The foreign investors specified by the Public Notice No. 3 [2016][2]of the People’s Bank of China (PBC), including commercial banks, insurance companies, securities companies, fund management companies, and other asset management or financial institutions duly registered or incorporated outside the Chinese mainland;investment products lawfully issued by the aforementioned institutions to clients; and other medium and longterm institutional investors approved by the PBC, such as pension funds, charity funds and endowment funds, may apply to CFETS for China Interbank FX Market (CIFXM) membership and engage in transactions that help them manage foreign exchange risk.

Foreign banking investors may choose to enter the CIFXM directly and/or through Prime Brokerage (PB). Non-bank foreign investors may participate in the CIFXM throughPB.

2.         Application Procedures

(1) Foreign investors who intend to enter the CIFXM directly and/or through PB, may submit the application materials to CFETS for obtaining CIFXM membership;

(2) CFETS sends the Member Agreement to applicants that have submitted complete application materials and met the prescribed requirements;

(3) Each applicant completesthe pre-entry preparations, including signing Member Agreement, establishing network connections, and arranging at least two tradersto complete the training program;

(4) Non-bank foreign investors and those foreign banking investors who choose to enter the CIFXM through PB, should submit the PB serviceapplication to CFETS and register their prime broker selection;

(5) CFETS sends an official approval notice to qualified applicants to recognize their CIFXM membership and publishes their names at www.chinamoney.com.cn and other releasing channels.

3.         Application Materials

(1) Photocopyof the applicant’s registration or incorporation certificate and the corresponding Chinese translation;

(2) CFETS RMB/FX Membership Application Form, CFETS Network Connection Application Form, and CFETS FX Trading System Digital Certificate Application Form;

(3) Letter of Commitment, in which the applicantshall undertake to engage in foreign exchange transactionsstrictly for hedging purposes[Ubica1] based on its risk exposure arising from investment in the interbank bond market, and to fulfill its reporting obligationsby submitting relevant information as required by CFETS, among other commitments;

(4) Internal operating procedures and risk management rules for trading in the CIFXM;

(5) CFETS Prime Brokerage Service Application From (if PB mode is chosen); and

(6) Other documents required by CFETS.

All aforementioned applicationmaterials and forms should be stamped with the applicant’s official seal or signed by its authorized signatory (attach the signature authorization). Foreign investors who are already members of the interbank RMB/FX market do not need to re-apply for membership, and only need to submit application material (3).

II.          Filing Requirements for Bank-to-Customer Market

The foreign investors specified by the Public Notice No. 3 [2016] of the PBC, may directly trade with domestic financial institutions as customers after filing with CFETS by themselves or through settlement agents. Each foreign investor may trade with at mostTHREE domestic financial institutions.[Ubica2] 

1.         Filing Procedures

(1) Foreign investors who choose to directly trade with domestic financial institutions as customers should file their selection ofsuch institutions with the CFETS either by themselves or through settlement agents after signing derivatives agreements but before trading;

(2) After receiving the filing form, CFETS notifies the selected domestic financial institution(s) and activate their information reportingfunction in the CFETS system;

(3) Any foreign investor who has changed their selectionmustnotify CFETS for a filing update within three business days after the derivatives agreement is signed. CFETS will notify the newly selected domestic financial institution(s) within three business days and update their information reporting function accordingly.

2.         Materials to be Filed

(1) The Filing Form

a. The name and contact information of the selected domestic financial institution(s);

b. Confirmation of the signing of derivatives agreement(s) with the domestic financial institution(s).

(2) Other documents required by CFETS.

All aforementioned materialsand completed forms should be stamped with the official seal or signed by an authorized signatory (attach the signature authorization).

III.         Information Reporting

1.         Reporting Entity

Foreign investors who participate in the CIFXM must fulfill their reporting obligations themselves. For the bank-to-customer market, the selected domestic financial institutions who are simultaneously trading counterparties with their foreign investor customers shall fulfill the reporting obligations.

2.         Contents of Reporting

(1) Foreign investors who participate in the CIFXM shall report the trade date, country/region, purpose/source, origin of trade[Ubica3] , among other information.

(2) In bank-to-customer market, the selected domestic financial institutions shall report the trade date, the name of foreign investor, country/region of foreign investor, trading product, trading direction, amount, exchange rate, purpose/source, origin of trade,among other information.

“Purpose/source” indicates whether or not the FX trade is conducted through CIBM Direct; “transaction type” indicates whether the FX trade is an “initial transaction” or to “reversely closing position” or an “extension.”

3.         Rules for Reporting

Reporting entities shall report the required information through the information reporting page on the CFETS Post-trade Processing Platform each trading day. The reporting cut-off time is 8:00AM of the next trading day for foreign investors who participate in the CIFXM, and 12:00PM of the next trading day for domestic financial institutions in the bank-to-customer market. All times refer to Beijing time (GMT+8).

IV.        Miscellaneous

1. “Prime Brokerage” as referred to in this Notice means the transaction model whereby a foreign investor (the Prime Brokerage client) enters into a trade using the name and credit limit of a domestic financial institution (the Prime Broker). Specific guidelines will be provided through a separate notice.

2. This Notice is effectiveas of February 1, 2020. In case of any discrepancy between this Notice and current CFETS rules, this Notice shall prevail.

V.         Contact Information

Tel: 4009787878*1*2*1, 021-20693742; 021-23165027;

Email: fx_mkt@chinamoney.com.cn.

China Foreign Exchange Trade System

January 22, 2020

[Note]: In the event of conflicts, contradictions, imprecision, mistakes or omissions between the Chinese version and the English version, the Chinese version shall prevail as the only version of this Notice.