Page:Circular of the People's Bank of China and the State Administration of Foreign Exchange on the Management of Domestic Securities Investment by RMB Qualified Foreign Institutional Investors.pdf/6

 #Photocopy of the CSRC's qualification certificate for RMB qualified investors.
 * 1) Filing information or reply from the SAFE on quota.
 * 2) Written custody qualification documents from its custodian.
 * 3) Custody agreement between the RMB qualified investor and custodian.
 * 4) Other documents required by the PBOC.

RMB qualified investors shall refer to the provisions in the Announcement No. 3 [2016] of the People's Bank of China in investing in the interbank bonds markets. To open a special deposit account for investment in the interbank bonds markets, an RMB qualified investor shall also present the filing notice for entry into the interbank bonds markets, and the written document on the custodian's qualification for commissioned settlement in the interbank bonds markets.

XII. An RMB qualified investor shall handle foreign exchange derivatives business through a foreign exchange derivatives business agency. Any foreign exchange derivatives business agency shall handle foreign exchange derivatives business for RMB qualified investors in compliance with the principle of real demand transactions.

XIII. RMB qualified investors shall comply with the principle of real demand transactions in foreign exchange derivatives business.

The foreign exchange derivatives business conducted by an RMB qualified investor is designed only to hedge against the foreign exchange risk exposure arising from domestic securities investments. The foreign exchange derivative exposure shall be properly relevant to the foreign exchange risk exposure that serves as the transaction basis under domestic securities investment. The foreign exchange derivatives position held by an RMB qualified investor shall be no more than the RMB asset size corresponding to the domestic securities investment under the custody of the custodian at the end of the previous month (excluding RMB deposit assets in special deposit accounts, the same below). The size of the RMB assets of the RMB qualified investor shall be verified and monitored by the custodian to ensure the authentication and accuracy.

The foreign exchange derivatives positions held by the RMB qualified investor may