Important Measures in January 2005
PRESS RELEASE Release Date: February 16, 2005
Important Measures in January 2005
In line with the policy of promoting the liberalization, internationalization, and development of the foreign exchange market, the Central Bank of China (CBC) announced the following measures in January 2005:
1.Effective Jan. 3, 2005, authorized banks are allowed to conduct foreign exchange derivatives business by notifying the CBC after the commencement of business for reference and filing, except the following foreign exchange derivatives products which require prior approval：
(1) Initiating a new product (including products initiated and run for less than 6 months) and new financial products linked to above-mentioned products.
(2) NTD exchange rate related products.
(3) Domestic risk related products.
2. In order to satisfy the hedging needs of enterprises which are creditors or security holders, and to provide a greater range of financial instruments to investors, on Jan. 28, 2005, the CBC allowed authorized banks to buy/sell foreign exchange Credit Default Swaps and Credit Default Options.
3. Approved Far Eastern International Bank to commence internet banking business involving foreign currencies.
4. Approved the following authorized banks to operate new foreign exchange derivatives business:
(1) Sunny Bank: Foreign Currency Structured Deposits composed of FCY Time Deposits and FCY Options.
(2) UBS AG, Taipei Branch：Structured Products composed of NTD/FCY Cross Currency Swaps linked with FCY Interest Rate Options.
(3) China Development Industrial Bank: NTD/FCY Options and NTD/FCY Cross Currency Swaps
(4) Taiwan Cooperative Bank: FCY Interest Rate Swaps.
(5) Chinatrust Commercial Bank: Structured Products composed of corporate bonds (excluding CB or ECB) issued by domestic enterprises linked with NTD/FCY Cross Currency Swaps, NTD IRS, FCY IRS and FCY IRO
5. Authorized Foreign Department, COTA Commercial Bank to operate the foreign exchange business. In addition, 3 non-authorized foreign exchange banks were approved to sell/buy foreign currency banknotes and traveler’s checks. As of the end of January 2005, there were 1,105 authorized foreign exchange banks, including 1,039 domestic banks and 66 foreign banks.