Regulatory Alerts2023-04-28
Added · Updated
Currency Conversion Arrangement Involving Onshore RMB (CNY) under Northbound Swap Connect
The Hong Kong Monetary Authority issued this circular to establish regulatory requirements for Hong Kong FX Settlement Banks providing onshore RMB conversion services under Northbound Swap Connect. The document mandates that banks must implement robust internal controls to verify investor eligibility and ensure that currency conversions are strictly ring-fenced for genuine daily settlements arising from interest rate swap contracts. Additionally, banks are required to monitor transaction discrepancies, report net conversion amounts monthly, and notify the regulator if deviations exceed specific thresholds to maintain access to the onshore interbank foreign exchange market.
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