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     -  Business Profile
     -  FX Interest Rate Swap
     -  Forward FX Interest Rate Swap
     -  Progressive FX Interest Rate Swap
     -  FX Interest Rate Swap under Remittance Payment Link
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  Home Page > Corporate Banking >Financial market >Corporate Risk Management >FX Swap
FX Swap
 

I. Introduction
A contract between customer and ICBC to exchange a certain amount in currency A for the same in currency B at a specified rate (market rate), and use currency B to exchange back the same amount in currency A on a specified date at a specified rate. FX swap is simple. FX swap is a combination of one spot transaction and one forward transaction, very flexible. Currencies, tenor can be set accordingly to meet the client business need.

II. Target Clients
Domestic corporate clients (enterprises/public institutions, government departments, and social organizations), foreign corporate entities in China and their branches, who wish to swap foreign currencies, adjust FX shortfall over mid-to-long term, or reduce running cost.

III. Application Condition
Customers should meet the following basic conditions:
(I) Credit rating of grade A (inclusive) or above;
(II) A true background on the need;
(III) Qualified and authorized to engage in derivative trading;
(IV) Understand the risks involved in derivative trading and willing to bear the potential loss;
(V) No bad credibility record in the bank, no serious bad record;
(VI) Line of credit granted by ICBC for derivative trading;
(VII) Primary deposit A/C or general deposit A/C opened in ICBC;
Relaxed rules on the credit rating and line of credit are applied to customers who can produce full margin amount or low-risk guarantee.

IV. Sign up
Apply at the ICBC branches licensed to trade derivatives, complete ICBC risk tolerance test, and sign master agreement. Before entering contract with ICBC, submit Letter of Authorization, read the risk disclosure statement and other details and confirm in signing. Provide necessary guarantee as required by ICBC. During the period of the swap contract, ICBC and customer settle and pay according to the terms stated in the contract.

V. Service Channel and Hours
Eligible customers are welcomed to apply during banking hours at the tier-1 branches or tier-2 branches which are licensed to offer forward FX trading services.

VI. Risk Warning
(I) In a FX swap contact, floating gain/loss is determined by the exchange rate fluctuations. Stop the contract may suffer loss if it appears to lose.

(II) Customer has to pay additional margin or provide other guarantees when the swap pricing is affected by the market rate.

Note: Information herein is for reference only. Refer to the announcements and regulations of local outlets for further details. Industrial and Commercial Bank of China Limited reserves the final right of interpretation.


(2012-08-30)
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