Shanghai International Energy Exchange has released its Circular on the Optimization of the Foreign Exchange Settlement and Purchase Operation Model Concerning the Trading of Specified Domestic Futures Products as follows: 

To all members,

To facilitate overseas traders’ and overseas brokers' engagement in the trading of specified domestic futures products, Shanghai International Energy Exchange (“INE”) has optimized the operation model of foreign exchange (“FX”) settlement and purchase for daily clearing as follows:

I. Summary of optimization

The fourth Monday of each month (postponed to the next trading day if it falls on a public holiday) is the cut-off date for conversion. Before the cut-off date, the net profit and loss of an overseas trader or overseas broker will be calculated on an accumulative basis to determine the eligible amount for conversion. If the eligible amount for conversion is above zero, such overseas trader or overseas broker may, at its own discretion, apply to its carrying Member for purchase of FX within the limit of the eligible amount. Upon the cut-off date for conversion, the Member shall complete the FX settlement and purchase according to the eligible amount for conversion as of the current day for all the overseas traders and overseas brokers as applicable.

II. Scope of optimization

The optimization only applies to FX purchase for daily clearing. The operations of FX settlement due to shortfall in RMB balance, the conversion for delivery payments, as well as forced FX settlement by INE remain unchanged.

III. Implementation Schedule

From January 1, 2021 to February 28, 2021, Members may either maintain the existing operations or upgrade the system to apply the optimized model. Starting from March 1, 2021, all members shall have completed the system upgrade and shall apply the optimized operation model. Members shall make preparations to ensure smooth migration to the new operation model.

Appendix: Guideline for the Settlement and Purchase of Foreign Exchange for Members (December 2020)

Shanghai International Energy Exchange
December 21, 2020