I. Description
The agency interest rate trading and settlement business refers to the product where ICBC trades bonds and derivative products and conducts bond settlement and fund clearing business on behalf of customers in Chinese interbank bond market.
The agency interest rate trading and settlement business provided by ICBC mainly include:
1. Handle registration formalities for customers in the institutions designated by the People’s Bank of China; open and cancel bond accounts in the name of customers China Central Depository & Clearing Co., Ltd. (“CCDC”) and Interbank Market Clearing House Co., Ltd. (“Shanghai Clearing House”) and other interbank market bond registration, custody and settlement institutions; open home currency transaction system accounts in China Foreign Exchange Trading System & National Interbank Funding Center (“CFETS”); open special foreign exchange accounts for customers and complete registrations
2. Accept the customer’s inquiry, and enter into bond transactions and derivative product transactions in the local currency trading system with the counterparties on behalf of customers based on the customer’s authorization.
3. Handle the procedures for bond book transfer or fund clearing on behalf of customers according to the customer’s authorization.
4. Provide customers with reconciliation and inquiry services related to bonds and derivative products.
5. Provide market information to customers in an objective and timely manner.

II. Target Customers
Overseas institutions with the need for bond investment in Chinese interbank market and the willingness to handle interest rate trading and settlement through ICBC, which meet the requirements for entering Chinese interbank bond market to conduct bond transactions laid down by regulators. Overseas institutions include overseas central bank institutions and overseas commercial institutions. Overseas customers applying for the agency interest rate trading and settlement business shall meet the following conditions: overseas central bank institutions refer to overseas central banks or monetary authorities, international financial organization and sovereign wealth funds; overseas commercial institutions refer to commercial banks, insurance companies, securities companies, fund management companies, and other assets management agencies that are legally incorporated outside the People’s Republic of China, as well as other medium-to-long-term investors that are recognized by the People’s Bank of China (“PBOC”), such as investment portfolios released by the abovementioned financial institutions in a lawful, compliant manner, pension funds, charity funds, and donation funds, etc.

III. Business Advantages
1. Rich market experience
Since the establishment of the interbank market in June 1997, ICBC has started its interbank market business as one of the first batch of participating institutions. After more than two decades of market development, ICBC has accumulated a wealth of market experience.
2. Complete business qualifications
ICBC was one of the first market members having obtained the qualifications interbank bond market maker, grade 1 dealer of open market operations, class A member of treasury bond underwriting syndicate, class A member of the policy financial bond underwriting syndicate, and bond settlement agent. It is also one of the commercial banks with the most complete qualifications for RMB business in Chinese interbank market.
3. Outstanding market position
ICBC is the largest investor and market maker in the interbank bond market and the largest underwriter bank. It has ranked the first in terms of the market share of bond underwriting business for many years. The rich trading resources and investment experience provide customers with competitive market quotations.
4. Strong market influence
ICBC has been the winner of many awards for many consecutive years, including Best Agent of Foreign Institutions (CFETS), Most Influential Institution (CFETS), Most Active Bond Dealer in the Interbank Bond Market (CFETS), Best Derivative Products Trading Award (CFETS), Award for Outstanding Contribution in Opening-up (CFETS), Outstanding Settlement Member of the Year in Self-operated Bond Business (CCDC), Outstanding Settlement Member of the Year in Bond Settlement Agency Business (CCDC), Outstanding Settlement Agency Institution (CCDC) and Best Maker in the Interbank Bond Market (NAFMII).
5. Excellent agency trading and settlement achievements
ICBC is one of the first commercial banks conducting agency interest rate trading and settlement business and has been the winner of Outstanding Settlement Member of the Year in Bond Settlement Agency Business and Outstanding Settlement Agency Institution granted by CCDC, as well as the Best Agent of Foreign Institutions and Award for Outstanding Contribution in Opening-up granted by CFETS. With huge RMB capital strength, intensive capital operating system, extensive counterparties, and experienced investment and trading teams, ICBC can provide customers with competitive bond quotes and trading services, and perform settlement agency services for overseas central bank and commercial financial institutional customers from 36 countries and regions. .
6. Outstanding value-added services
The excellent research teams of ICBC will provide customers with comprehensive market information, differentiated investment advices and dynamic portfolio management strategies in a timely manner.

IV. Qualifications
Overseas institutions with the need for bond investment in Chinese interbank market and the willingness to handle interest rate trading and settlement through ICBC, which meet the requirements for entering Chinese interbank bond market to conduct bond transactions laid down by regulators. Overseas institutions include overseas central bank institutions and overseas commercial institutions. Institutions that meet the above requirements have to submit the registration form for investment in Chinese inter-bank market to the Shanghai Head Office of the People’s Bank of China to complete registration before entering the inter-bank bond market.

V. Service Channels and Time
The customers may apply to the ICBC branches running the business or the Head Office for the agency interest rate trading and settlement business during the business hours.

VI. Operation Guide
i. Business initiation
1. Overseas applying for the agency interest rate trading and settlement services must meet the regulations issued by the People’s Bank of China on types of investors for overseas institutions entering the interbank bond market, provide ICBC with registration materials as required by the People’s Bank of China and sign the Agency Bonds Trading and Settlement Agreement with ICBC, after which ICBC will assist customers in submitting registration materials to the People’s Bank of China Shanghai Head Office.
2. Customer applying for agency interest rate trading and settlement business should designate capital accounts for bond trading and settlement. Overseas commercial institutional customers should open special RMB accounts in branches of ICBC as relevant capital accounts for bond trading and settlement.
3. The customer shall provide ICBC with application documents for the opening of the bond account and local currency trading system account according to the requirements of the intermediary institutions and ICBC. ICBC will act as the agent to complete the account opening procedures for the bond account and the local currency trading system account at the CCDC, the Shanghai Clearing House and CFETS.
ii. Agency interest rate trading
1. The customer having the demand for bond transactions may present the inquiry to ICBC by fax, e-mail, ICBC internet banking, or with other methods agreed upon by both parties. ICBC will make an inquiry in the interbank market and provide the result to customer according to customer requirements.
2. After confirming the trading intention, the customer may send a bond trading authorization form to ICBC via fax, e-mail, or ICBC corporate internet banking or with other methods as agreed by both parties. ICBC will accept the authorization and reach bond trading in CFETS’s local currency trading system on behalf of customer.
3. After the bond trading is completed, ICBC will, as requested by customers, provide them with closing vouchers generated by the local currency trading system through the ICBC corporate internet banking, e-mail or other ways agreed upon by both parties.
iii. Agency interest rate settlement
1. According to the agreement with the customer, ICBC may handle bond settlement for customers directly after reaching a bond transaction, or handle bond settlement according to the agency interest settlement instructions sent by customers.
2. After the bond settlement is completed, ICBC will, as requested by customers, provide them with bond delivery vouchers generated by CCDC comprehensive business platform or the terminal of Shanghai Clearing House through the ICBC corporate internet banking, e-mail or other ways agreed upon by both parties.

VII. Business Case
In March 2016, a Hong Kong branch of an overseas commercial bank chose ICBC as its settlement agent and hoped that ICBC would assist it in completing registration in the People’s Bank of China for entry into Chinese inter-bank bond market and increasing the operating income of funds through investment in bonds. In May 2016, the customer presented the demand of buying a three-year medium-term bond with a denomination of RMB60 million to ICBC. Based on its demand, ICBC provided it with a competitive market quotation, conduct the interbank market trading for the customer and assisted him in completing the RMB configuration for the investment portfolio.

VIII. Risk Prompt
The bond price may have unfavorable fluctuation due to domestic and overseas political and economic factors and other emergencies. The customer may suffer possible losses in bond trading and thus should pay attention to the price changes in market and conduct trading prudently.
Apart from market risks, customers should also pay attention to possible policy risks, liquidity risks, operational risks, force majeure, emergencies risks, and other contingent risks in bond trading. Please read carefully relevant notices in the product introduction and business agreement.

Note: The information provided on this page is for reference only. Concrete business shall be subject to the announcement and provisions of the local outlet.