Financial Services Catering to Crude Oil Futures
at Commercial Banks
Bank of Communications
A Brief on the Course of RMB Internationalization
Contents
Financial Services Catering to Crude Oil Futures
Strengths of Bank of Communications
in providing Supporting Financial Services
1
Seeking Progress while Maintaining Stability in the process of
RMB Internationalization
MR. YI Gang, Deputy Governor of PBC
“It’s a mid- to long-term strategy for us to realize RMB internationalization,
so that we need to maintain the stability and achieve the goal steadily.
The market drivers of RMB Internationalization remain the same, which serve as the
most important foundation for this strategy.
We should perfect the top-level design, facilitate trade, investment and payment, and
provide convenience for RMB being taken as a reserve currency.
We should promote the cross-border usage of RMB and also, put emphasis on
improving RMB full convertibility under capital account in a prudent manner.
We should improve the construction of related infrastructures in promoting RMB
internationalization.
We should provide guidance in the sound development of an offshore RMB market
Progress made in the course of RMB Internationalization
RMB officially included in SDR, with international influence continuously increased. In August 2016, World
Bank issued the first bond settled in RMB, aka Mulan Bond, in the Chinese inter-bank market.
Transparency greatly improved in the formulation of RMB exchange rate. After the Chinese New Year in 2016,
the formation mechanism of middle rate between RMB against USD became more perceivable with its features of
“closing price+ exchange rate change currency basket”, as a result of policy effects.
The opening-up of Chinese interbank bond market is furthered.
In Feb 2016, the interbank bond market was opened to a larger extent to foreign investors, with limits on investment
amount removed, and an increased number of global investors (407 of them by 2016). Meanwhile, in 2016, there was
26 foreign issuers issued 92.8 billion yuan panda debts in Chinese bond market, and the issuers include international
developers, overseas financial and non financial institutions, international commercial banks and foreign governments
etc.
Macro and prudent administration on cross-border capital flow, with consideration given to financing
convenience and risk preventions. In May 2016, financial institutions and enterprises are allowed to raise foreign
debt without approvals in advance, as long as the cross border financing amount is within their asset or equity linked
amount, they will have full autonomy to raise debts in both home and foreign currencies.
Offshore RMB markets are making progress at various locations, with UK and US market growing despite of
setbacks. New products and services relating offshore RMB were launched one after another in Hong Kong and
Taiwai, the direct investment channel between mainland China and Hong Kong was fully established with the
SHENZHEN-SHANGHAI connect put into operation, and also , US gained its RQFII quota.
Interbank FX market was opened, with infrastructure further improved . In Jan of 2016, qualified participating
banks conducting RMB sale and purchase businesses were allowed to enter the interbank FX market, tapping on spot,
forward, swaps and option trading. Trading hours were extended to 23:30 to cover the European trading time, with all
products traded in the night trading session.
Progress made in the course of RMB Internationalization
 Percentage of RMB in global payment and settlement *
By March 2017, RMB stably maintained at the 6th place in global payment currency, accounting for a share of
1.78% of the global payment
In 2016, China has a relation with 192 countries or regions in cross-border RMB receipt and payment, same as the
last year, with almost all major trading partners covered
In Feb 2017, the percentage of RMB usage in TOP 3 offshore RMB centers: HK 75.9%（71.6% in 2016），
London 5.88%（5.2% in 2016）,Singapore 4.08%（5.2%, 2016）
Hong Kong
UK
Singapore
US
Taiwan
Korea
France
Australia
Germany
Belgium
Luxembourg
Holland
Canada
Percentage of RMB usage in international payment
currency（March 2017）
* 本页数据及图表来源于环球银行金融电信协会（SWIFT)报告
Global Share of RMB usage at each offshore RMB
Center（Feb 2017）
Progress made in the course of RMB Internationalization
 Construction of RMB Clearing banks
 PBOC has successively signed and established currency clearing mechanisms with financial authorities in 23
countries and regions, , including HK, Macau, Taipei, Seoul, Singapore, UK, Germany, France, Luxembourg,
Qatar, Canada, Australia, Malaysia, Thailand, Chile, Hungary, South Africa, Argentina, Zambia,
Switzerland, Russia, United States and UAE, and has designated one Chinese bank as clearing bank in each of
the country or region.
 From Asia-pacific to Europe, from Middle East to the America, a seamless network of global RMB clearing is
largely in place, providing strong support for the global development of cross-border RMB Business
RMB Clearing Banks in all the major oil production or trading countries such as UAE, Russia, Singapore
Paris
Frankfurt
Russia
Toronto
UK
Luxemburg
Zurich
Zambia
New York
Seoul
Doha
Dubai Bangkok
HK
Macau
Kuala Lumpur
Johannesburg
Taipei
Singapore
Sydney
5
Chile
Argentina
Progress made in the course of RMB Internationalization
 Belt and Road Initiatives provide new opportunities for RMB internationalization
 ZHOU, XIAOCHUAN, the Governor of PBC, said at the Belt and Road Summit, that, we need to give the full
play to local currency in implementing the Initiatives
”BRI will bring about tremendous infrastructure constructions along the routes, and new opportunities will arise
along with the inflow of huge amount of investment.
There are already some experience, in using local currency to promote Belt &Road Initiatives: meaningful trials
have been carried out in signing home currency swap agreement, direct currency trade, RMB clearing bank and
cross-border RMB payment system
Road map of One Belt One Road
21st century maritime silk road
Progress made in the course of RMB Internationalization
 The use of RMB in major oil producing countries*
UAE, a major oil producer in the Arabian world, uses significantly more RMB in its cash receipt and payment as of
August 2016, up by 44.6% and 210.8% compared to 2015 and 2014 respectively
In August 2016, among all the cross-border settlement between UAE and China (HK included) , RMB accounted
for 81.4% of the total.
 As the largest oil exporting countries to China, Russia has been using RMB as its settlement currency.
 INE Crude oil futures denominated in RMB
RMB used as a settlement currency in UAE
(Jan 2014- August 2016)
* According to the SWIFT report
Currencies used in payment and
settlement between UAE and China
（August 2016）
A Brief on the Course of RMB Internationalization
Contents
Financial Services Catering to Crude Oil Futures
Strengths of Bank of Communications
in providing Supporting Financial Services
8
Financial Services Catering to Crude Oil Futures
 Participants of Crude Oil Futures
Domestic
Clients
Same as the existing business procedures,
Old clients don’t need to resign the bankfutures money transfer agreement.
Overseas
Clients
Open specialized futures settlement
accounts for local currency and FX based on
relevant rules and regulations, sign bankfutures transfer agreements respectively.
Commercial Banks need to submit applications for
becoming a depositary bank to INE
Financial Services Catering to Crude Oil Futures
 Special Account Services for participating parties
Participating parties
Accounts at depository banks
INE
Dedicated settlement accounts in various currencies
Domestic Members
Dedicated margin accounts in various currencies
(Dedicated margin accounts opened with designated
branches of a Designated Depository Banks shall be used
as Member’s Dedicated Fund Accounts)
Foreign Brokerage Firms
Foreign Traders
Futures settlement accounts in various currencies
(NRA Accounts)
Domestic Clients
RMB Futures settlement accounts
Financial Services Catering to Crude Oil Futures
 Cross-border flow and usage of fund relating to crude oil futures
When FX is remitted from the
broad, the purpose and natures of
the fund should be explained.
Also it shall be filed with the bank
in advance and relevant parties
should cooperate with banks in
authentication and compliance
check.
Fund deposited in dedicated
futures settlement accounts in the
name of foreign investors and
brokerage firms shall be kept in
segregated accounts, and not
allowed to trade ay other contract
but the specific futures contract
as approved.
Cross-border fund
collection
Cross-border
payment
Futures Settlement Accounts
in FX, opened by foreign
traders and foreign brokerage
firms can used to receive
funds coming from the abroad
Foreign traders and brokerage
firms can apply thru online
banking, and the application will
be
processed
after
the
authentication verification and
compliance check
Only the net of profit and loss of
futures trade, fees and
commissions, delivery funds ,
margin calls and any other funds
relating to the futures trading
shall be subject to FX sale and
purchase.
FX Sale and
purchase
Members, based on the results
of futures trading and the
selection of currency for
cashing-out profits, submit
applications
to
depository
banks through the Electric FX
conversion module in the bankfutures system
No limits will be set on the
total amount, or percentage or
tranches when foreign traders
and brokerage firms transfer
funds from the aboard for
crude oil futures trading.
Quota
Depositary Banks process
FX conversion according to
the results of futures trading
for
overseas
investors,
overseas brokerage firms
and local members.
Financial Services Catering to Crude Oil Futures
 Fund transfer procedures for an overseas clients
A
Open Futures
Settlement
Accounts in
various
currencies with
depository
banks
B
Open futures
trading
accounts with
local futures
firms
C
Sign
agreements on
fund transfer
between bank
and futures
accounts
D
Fund transfer
realized thru inand outflow of
FX and money
transfer
between bank
and futures
accounts
Financial Services Catering to Crude Oil Futures
 Fund transfer procedures for an overseas clients—（1）Bank Account
opening
A
B
C
D
Open Dedicated Futures Settlement Accounts with depositary banks- A/C
opening for legal person clients
Foreign investors and brokerage firms need to go to the counter, when applying for
open, change or closure of the dedicated futures settlement accounts.
Documents required：Application for Settlement Account for institutional clients,
Certificate of Corporation, Approvals of business operation in China issued by
authorities or relevant laws and regulations
Fund deposited in dedicated futures settlement accounts shall be kept in segregated
accounts, and not allowed to trade any other contract but the specific futures contract
as approved.
Financial Services Catering to Crude Oil Futures
 Fund transfer procedures for an overseas clients—（2）Get fund code
for futures trading
A
B
C
D
Open futures trading accounts with local futures firms
 Overseas clients can directly open dedicated futures settlement accounts in China,
apply for futures fund account NO., sign brokerage agreements, as instructed by
local futures firms.
For OSPs, they have to apply the qualification of OSP with INE, before they can
have futures fund account number and sign authorization agreement of clearing with
local futures firms.
In the futures, if local banks are granted qualifications for authorized settlement,
OSPs can authorize local banks to trade and clear on behalf of them.
Financial Services Catering to Crude Oil Futures
 Fund transfer procedures for an overseas clients —（3）Contract signing
for fund transfer between bank and futures market
A
B
C
D
Agreement Signing Procedures for Overseas Clients on Fund Transfer between Bank
and Futures accounts
For foreign clients, they need come the counter with their agreements signed with domestic
futures firms. For OSPs, they also need to come the counter, take their authorization clearing
agreements signed with local futures firms and other related documents as well.
Based on the documents provided by clients, banks will make special marks on their
dedicated futures settlement accounts and arrange agreement signing for bank and futures
account transfer.
Clients submit applications for and fund transfer between bank and futures accounts as
well as its on-line access. Then, clients will be able to make money transfer and balance
check via online banking.
Financial Services Catering to Crude Oil Futures
 Fund transfer procedures for an overseas clients —（4）Fund Transfer
A
B
Submit application
at the counter of an
offshore branch or
via online bank for
fund remittance
Cash
In
Foreign
Bank
Accounts
Cash
out
C
Transfer from
bank account to
futures market
Domestic
Bank
Accounts
Submit application
at the counter of a
domestic branch or
via online bank for
fund remittance
D
Futures
Fund Code
Transfer from
futures market to
bank
Crude
Oil
Futures
A Brief on the Course of RMB Internationalization
Contents
Financial Services Catering to Crude Oil Futures
Strengths of Bank of Communications
in providing Supporting Financial Services
17
Strengths of Bank of Communications
in providing Financial Services
The International, Comprehensive and Fully Licensed Bank of Communication Financial Group
Bank of Communications boasts of a network across the country. As one of the large-scale bank with full licenses of
financial services, it has established a comprehensive system that focuses on banking and includes trust, fund,
financial lease, insurance and investment banking. It has been serving the real economy in multiple channels and
regions, by continuously strengthening its comprehensive service mix.
Bank of Communication has been dedicated to become a first-class international bank that stands out in its
international businesses and the strengths in providing global financial services. By the end of 2016, it has established
20 branches or sub-branches in 16 countries and regions, with an overseas network roughly in place, which is
described as“Asia as the body, Europe and US as the wings, and eyeing the world ”.BOCM is one of the Chinese
banks that has longest history of setting up overseas branches and boasts the highest level of internationalization.
232 companies in mainland China
London Branch/
（37 Directly controlled Provincial Banks and 195 banks
under provincial banks; )3285 branches across China
UK Subsidiary
Frankfurt
Branch
Luxemburg
Subsidiary
Offshore Center
(shanghai)
Ho Chi Minh
Branch
Singapore
Branch
* 本页数据来源于交通银行2016年年报
New York
Branch
Seoul Branch
Tokyo Branch
Taipei Branch
Hong Kong
Branch
Macau
Branch
Toronto Rep
Office
Brisbane
Branch
Acquired
BBM Bank in Brazil
SAN
Francisco
Branch
Sydney
Branch
Strengths of Bank of Communications
in providing Financial Services
 A pilot and an explorer as a financial institution providing services for
futures industry
Bank of Communications obtained the qualification of futures
settlement banks in the 1992 when the domestic futures market first
came into being, conducting settlement services for several
exchanges such as Shanghai Metal Exchange.
One of the earliest
settlement banks
for futures trading
One of the first
batch of
CFFEX’s margin
custodian bank
In 1995-1996，we became the first depositary bank for ZCE,
DCE and one the first batch for SHFE after the market overhual,
providing professional futures settlement services.
One of the first
batch of SHFE’s
custodian banks
Fully involved in
the research and
development of
crude oil futures
When CFFEX established in 2006, we managed to be certified
as one of its first batch of depositary banks
The first bank that provided wealth management services incl.
settlement and financial planning for investors, and provided
settlement, financing and other innovative supporting services to
futures firms
Having been involved in the Research Group of Crude oil
futures of SHFE since 2007. Starting from 2012, cooperate with
SHFE to research into “Hedging tools for RMB-denominated crude
oil futures”
Strengths of Bank of Communications
in providing Financial Services
 Comprehensive, Efficient and Secured Financial Services for Crude Oil Futures
Comprehensive and efficient financial services for futures trading
Services of account management, fund transfer, information management and risk management services,
provided for 4 major participating entities, i.e. futures change, exchange members, investors and margin monitoring
center
 7 × 24 online banking and telephone banking, real-time money transfer without any physical presence required
Easy fund transfer services between banking, securities and futures markets
Stable and Secured supporting system for futures trading
A stable and secured futures margin depositary system, with the practice of segregated accounts which ensure the
segregation between margin deposit and bank’s own fund
Cooperation with INE started in 2012, equipped with optimized banking-futures fund transfer system, providing
NRA account contract signing and multi currency transfer, purchase and sales services to foreign investors
The earliest bank that realizes system connection to online cloud platform, providing investors with one-stop
account opening and contract signing experience.
Comprehensive wealth management services as a support
Wealth Management services incl. settlement and financial planning provided for futures investors
Settlement, financing and other innovation complementary services provided for futures firms, also
credit facilities provides to risk management vehicles of futures firms.
Tracking on business backgrounds of crude oil futures investors from home and abroad in all
dimension, and providing tailor-made financial service package for their business needs.
Strengths of Bank of Communications
in providing Financial Services
 By delivering comprehensive International Services, we help our clients
achieve higher return and realize value preservation and increment.
Cross-Border Settlement
Cash Support
FX Services
Financing Services
FX sale and purchase applications sent from
correspondent banks of domestic futures firms
Funds for settling profits and losses of the futures
trade, fees and commissions, delivery funds , margin
calls and any other funds relating to the futures trading.
Foreign clients can convert their currencies into
RMB with our offshore branches, before remitting the
fund into china to trade crude oil futures
FX Risk Hedging Services
 FX Forwards
 FX Swaps
 USD/CNY Options
 Cross Currency swaps
Risk Hedging
Traditional facilities for commodity financing
Multi-channel financing solutions at group level
Actively engaged in research into national bond and
securities served as trade margin
Overseas branches can provide overseas clients with offshore loan against domestic cash or stocks pledge
Bank of
Communic
ations
Trading access to global
derivatives markets
Clients can carry out cross-market and crossproduct asset allocation on just one platform
Clients can use both interest rate contracts
and FX contract at the same time to hedge their
exposures.
Asset Allocation
Strengths of Bank of Communications
in providing Financial Services
 Outstanding financial services provided to large oil companies
Based on its strength in internationalization and comprehensive services mix, Bank of Communications
has been providing services like cross-border trade, financing and investment to many large-scale oil
companies such as Sinopec, CNPC, CNOOC, SINOCHEM, Yanchang Petrolem Companies etc.
Quality service
Construction of Dual
Global Platform
International settlement
Cross-border trade
finance
Cross-border finance
Service for direct
outbound investment
Global financial service
platform
+
Global wealth
management platform
Integrationn of the Bank’s
international resources and strengths
• Synergy of coordinated services at all the onshore and offshore
branches, strengths of the network of correspondent banks
• Offshore resources in size and licenses
• First Mover Advantage in the Shanghai Pilot Free Trade Zone
Strengths of Bank of Communications
in providing Financial Services
Take advantage of our strengths in cross border clearing
channels, to meet the needs for money transfers
Take advantage of our comprehensive international
platform, to meet the needs for crude oil futures
investment
Innovation
Mutual Benefits &
New developments
感谢聆听
THANKS FOR YOUR TIME