People's Bank of China, Provisions for the Administration of the Forward Rate Agreement Business

中国人民银行远期利率协议业务管理规定

November 02, 2007 | BY

clpstaff &clp articles

PBOC launches forward rate agreements.

Promulgated: September 29 2007
Effective: November 1 2007

Interpreting Authority: People's Bank of China (PBOC)

Applicability: The term "forward rate agreement" (FRA) refers to a financial contract whereby both parties to the transaction agree to exchange at a certain date in the future and within the term of the agreement the interest payments on a certain principal calculated according to the interest rate stipulated in the contract and the reference rate respectively. The interest paid by the buyer is calculated according to the interest rate stipulated in the contract while the interest paid by the seller is calculated according to the reference rate (Article 2).

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