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  Home Page > Corporate Banking >Financial market >Products & Services >Investment products >Spot Exchange Settlement and Sale
Spot Exchange Settlement and Sale
 
I. Description
Spot exchange settlement and sale business refers to the foreign exchange and RMB exchange business conducted between the customers and the Bank based on the Bank’s real-time spot quotations in line with the national foreign exchange policy.

II. Target Customers
It is applicable for personal customers and corporate customers established in the territory of the People’s Republic of China (excluding Hong Kong, Macao and Taiwan) such as state organs, enterprises and institutions, social groups, troops and foreign-invested enterprises, with the needs for foreign exchange settlement and sale.

III. Features and Advantages
i. Main features of spot exchange settlement and sale business
1. Spot exchange settlement and sale business is the most fundamental exchange tool between foreign currencies and RMB, and the trading structure is simple and clear, and easily understandable.
2. Spot exchange settlement and sale business is simple and fast, and the funds can be available immediately after the transaction is completed.
ii. ICBC’s strength in spot exchange settlement and sale business
1. ICBC is one of the most influential market makers in the inter-bank RMB exchange market, and it can complete the hedging of transaction risks at a lower cost, and thus provide competitive prices to the customers.
2. ICBC’s channels for handling foreign exchange settlement and sale business include business outlets, self-service terminals, Internet banking and mobile banking. {0><}0{>Corporate customers can handle spot exchange settlement and sale business at business outlets or the corporate online banking; and personal customers can handle spot exchange settlement and sale business at business outlets, self-service terminals or via personal Online Banking or mobile banking.
3. ICBC can handle foreign exchange settlement and sale business of 26 currencies, and it is the commercial bank covering with the most diverse varieties of currencies in the foreign exchange settlement and sale business, where, personal online banking and mobile banking have covered the foreign exchange settlement and sale business of 18 currencies, i.e., U.S. dollar, Euro, British pound, Swiss franc, Hong Kong dollar, Japanese yen, Canadian dollar, Australian dollar, Singapore dollar, Russian ruble, New Zealand dollar, Norwegian krona, Danish krone, Swedish krona, Macao currency, Thai baht, South Korean won and South African rand.

IV. Case Study
In October 2015, a customer needed a large sum of USD to pay for goods, and it consulted with ICBC about the spot exchange settlement and sale business. At that time the spot exchange rate of USD to RMB was 6.3513. {0><}0{>Considering the trend of foreign exchange market and the domestic economic situation, ICBC believed that the exchange rate of USD to RMB would maintain a moderate depreciation trend, and suggested the customer to immediately purchase foreign currency so as to lock the cost. {0><}0{>After the customer has purchased the foreign currency, as predicted by ICBC, the spot price of USD to RMB continuously fell.

V. Qualification
1. Personal customers’ spot exchange settlement and sale business
In accordance with the state foreign exchange policies, an annual limit is set on the amount of domestic personal customers’ foreign exchange settlement and sale business.At present, the limit for both settlement and sale businesses of foreign exchange is equivalent to USD50,000 (inclusive). {0><}0{>For personal customers with the needs for a total amount exceeding the annual limit, the effective evident for the real needs shall be provided. {0><}0{>For foreign personal customers, in accordance with the Measures for the Administration of Individual Foreign Exchange (PBOC Order [2006] No. 3) and the Detailed Rules for Administering Individual Foreign Exchange Transactions (H.F. [2007] No. 1), the foreign exchange settlement and sale business shall be handled on the basis of the principal’s valid identity documents and related supporting materials.
2. Corporate customers’ spot exchange settlement and sale business
For a corporate customer to handle spot exchange settlement and sale business at a business outlet, it shall open an RMB settlement account and a foreign exchange account at ICBC, and present relevant approval documents, valid vouchers, commercial documents and other data required by the State Administration of Foreign Exchange (SAFE).
For a class-A corporate customer that has opened a current foreign exchange settlement account (1000-current foreign exchange settlement account) at a domestic ICBC outlet, it can handle the spot exchange settlement and sale business under the current account via the corporate Internet banking. {0><}0{>Before a customer is allowed to handle foreign exchange settlement and sale business via the corporate Internet banking, it shall register the certificate version of corporate Internet banking, open a current foreign exchange settlement account and RMB settlement account, and submit true supporting materials such as trade contract, invoice and customs declaration; after the materials have been verified by ICBC, the Bank will designate a foreign exchange settlement account, transaction limit and delivery term for the customer (for a transaction application beyond the scope of business via e-banking channels as specified by the regulatory agencies and ICBC, the transaction shall be handled at a business outlet of ICBC).

VI. Service Channels and Hours
i. Counters
The customers in compliance with the national foreign exchange policy can handle the spot exchange settlement and sale business directly at a designated ICBC outlet during the business hours by presenting related materials.
ii. Internet banking services
Personal customers can handle spot exchange settlement and sale business via Internet banking and mobile banking during the period from 7:00 to 23:00 from Monday to Sunday (Beijing time); and corporate customers can handle spot exchange settlement and sale business via Internet banking from 9:30 to 23:30 from Monday to Friday (Beijing time).

VII. Application Process
i. Counter-based
1. Flow chart for personal customers’ spot exchange settlement and sale business

2. Flow chart for corporate customers’ spot exchange settlement and sale business.

ii. E-banking channels such as Internet banking and mobile banking.
1. Flow chart for personal customers’ spot exchange settlement and sale business.

2. Flow chart for corporate customers’ spot exchange settlement business.

3. Flow chart for corporate customers’ spot exchange surrendering business.

VIII. Risk Prompt
Due to the uncertainty in the changes of exchange rate in future, in the case that the exchange rate in future is superior to the exchange rate in the spot business after the customer has handled the spot exchange settlement and sale business, since the customer has locked the cost or income of exchange rate, he cannot enjoy the extra income brought by the changes of exchange rate in future.

IX. Notes
1. The customers shall present relevant qualification certificates and compliant and valid documentary evidence as required by SAFE, and coordinate with the Bank to complete due diligence.
2. After the related materials of customers have been verified by the Bank’s tellers, the customers shall submit an official application for foreign exchange settlement and sale business. After the transaction has been confirmed, the Bank will issue a business transaction voucher to the customer.
3. The Bank will provide quotations to the customers according to the price trend of RMB exchange market, and make real-time updates based on market changes.

X. Definitions
In accordance with the related stipulations in the Measures for the Administration of Individual Foreign Exchange (PBOC Order [2006] No. 3), domestic individual refers to Chinese citizens holding the resident identity cards of the People’s Republic of China (including interim identity cards), military ID cards or armed police identity documents; overseas individual refers to foreign citizens holding passports, Home Return Permit or Mainland travel permit for Taiwan residents (including stateless people), and compatriots in Hong Kong, Macao and Taiwan.
Spot exchange settlement: refers to the customer selling foreign exchange to the Bank and the Bank paying RMB at equal value to the customer according to the real-time exchange rate of the trading day.
Spot exchange surrendering: refers to the customer buying foreign exchange from the Bank and the Bank collecting RMB at equal value from the customer according to the real-time exchange rate of the trading day.

Note: The information provided on this page is for reference only. Concrete business shall be subject to the announcement and provisions of the local outlet.


(2016-05-05)
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