China solicits public opinions on draft regulation for interbank foreign exchange market

BEIJING -- China's central bank and foreign exchange regulator began soliciting public opinions on Friday regarding a draft regulation designed to strengthen supervision of the interbank foreign exchange market and enhance its role in serving the real economy.

The draft regulation, jointly issued by the People's Bank of China and the State Administration of Foreign Exchange, marks a revision of the interim provisions on the administration of the interbank foreign exchange market that was first introduced in 1996.

The interim provisions have long served as an important regulation in China's interbank foreign exchange market. They played a vital role in improving market rules, maintaining fair market order, safeguarding the legitimate rights and interests of institutions, and promoting the rule of law, according to the two government authorities.

With China's economic and financial reforms and opening-up advancing steadily, the internal and external environment of the foreign exchange market has changed considerably. The existing provisions can no longer fully meet practical needs and thus require revision and improvement.

Comprising four chapters and 35 articles, the draft regulation focuses on strengthening comprehensive supervision over participants of the interbank foreign exchange market and establishing a full-chain regulatory framework, covering aspects such as institutional governance, trader management, market maker management, information sharing and disclosure, data distribution, fee management and industry self-discipline.

The draft highlights measures to enhance the management and service capacity of market infrastructure, including clear responsibilities for trading and clearing institutions. It also clarifies the scope of market access for financial institutions, stipulating entry conditions and business principles.

The draft also proposes measures to strengthen the forward-looking capacity of foreign exchange market management, such as enriching trading products and currency types in line with market demand, providing data services based on market-oriented principles and regulating the data distribution practices of financial information providers.

The draft is open to public feedback until Sep 21, 2025.