China toughens forex trading rules, targets malpractice

An advertising poster promoting Chinese renminbi (RMB) or yuan, US dollar and euro exchange services is seen outside a foreign exchange store in Hong Kong, China on August 13, 2015. REUTERS / Tyrone Siu / File Photo

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BEIJING, Dec. 3 (Reuters) – China’s foreign exchange regulator on Friday issued guidelines on foreign exchange trading, targeting market manipulation, fraud and abuse.

The guidelines would help regulate trade in the foreign exchange market and promote “honest, fair, orderly and efficient market operations,” the State Exchange Administration said.

Market participants would be prohibited from manipulating the prices of closing currencies or other benchmarks and abusing dominant market positions to influence prices, according to the guidelines.

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Market participants would not have the right to use non-public and market-changing information to transact in currencies, or to use such information to advise others to trade, as directed. .

Market participants should properly conduct own-account currency transactions, actively provide liquidity to the market and adjust supply and demand in the market, and help keep the yuan essentially stable at a reasonable and balanced level.

Sources told Reuters that a central bank-led self-regulatory group that helps oversee China’s foreign exchange sector has asked commercial banks to cap the size of their own-account trading accounts, which many players have said. market have interpreted it as a measure to limit speculation by financial institutions on the yuan. Read more

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Reporting by Kevin Yao and the Beijing Newsroom; Editing by Toby Chopra and Edmund Blair

Our Standards: Thomson Reuters Trust Principles.

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