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

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.