General Office of the China Banking Regulatory Commission, Circular on Issues Relevant to the Engagement in Foreign Exchange Margin Trading by Banking Financial Institutions

中国银行业监督管理委员会办公厅关于银行业金融机构开办外汇保证金交易有关问题的通知

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The CBRC puts a halt to banks' forex margin trading.

Issued: June 6 2008

Applicability: For the purposes of this Circular, the term "foreign exchange margin trading " means the leveraged foreign exchange trading service that a banking financial institution provides to an investor. Its main features are as follows: after an investor, with the objective of making a profit on foreign exchange trading, actually invests a certain amount of money as a trading margin, it can amplify the amount thereof by a certain leverage multiple, thereby permitting the actual contract amount of a foreign exchange transaction to exceed the amount of the trading margin actually invested by it.

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