In the past two years, with the increasing uncertainty of the global economic outlook, market volatility has increased significantly. In this context, the banking industry is continuing to tighten the high-risk personal financial derivatives business.
On April 13, Industrial And Commercial Bank Of China Limited(601398) announced that from 0:00 on June 12 this year, the bank would suspend the signing of new customers and the opening of all trading varieties of individual foreign exchange trading business, becoming another bank to suspend individual foreign exchange trading business after China Merchants Bank Co.Ltd(600036) , Hua Xia Bank Co.Limited(600015) last year.
securities times · Chinese reporter of securities firm learned from the International Business Department of a joint-stock bank that the Industrial And Commercial Bank Of China Limited(601398) suspension should be the private foreign exchange trading of individuals with margin leverage trading. The source revealed that his institution also has personal foreign exchange trading, but most of them are solid transactions, which are not affected at present
“This time, only the individual foreign exchange trading business is adjusted, and the individual foreign exchange settlement and sales business is not involved. The individual foreign exchange settlement and sales business can be handled normally.” Industrial And Commercial Bank Of China Limited(601398) said. It is understood that Industrial And Commercial Bank Of China Limited(601398) also suspended another business – account foreign exchange business last year. Earlier, in July and August last year, China Merchants Bank Co.Ltd(600036) , Hua Xia Bank Co.Limited(600015) also successively announced the adjustment of individual foreign exchange business.
“The previous’ crude oil treasure ‘incident was equivalent to a stress test on the risk control ability of financial derivatives trading of traditional commercial banks. At that time, the results were not satisfactory.” An insider told reporters that after that, the banking industry continued to tighten personal financial derivatives business, including under the guidance of supervision, most banks adjusted their account precious metals business.
“cosmic travel” announced the adjustment of relevant businesses
On April 13, Industrial And Commercial Bank Of China Limited(601398) issued an announcement on its official website, announcing that it would adjust its personal foreign exchange trading business. It mainly includes:
From 0:00 on April 17, 2022, the bank will close the telephone bank of personal foreign exchange trading business and ICBC e investment channel. Customers can continue to handle business through online banking and mobile banking channels;
From 0:00 on June 12, 2022, the bank will suspend the signing of new customers of personal foreign exchange trading business and the opening trading of all trading varieties, and the closing trading of customers with positions will not be affected.
Industrial And Commercial Bank Of China Limited(601398) explained that the bank only adjusted the individual foreign exchange trading business this time, not involving the individual foreign exchange settlement and sales business, and the individual foreign exchange settlement and sales business can be handled normally.
It is understood that the individual foreign exchange trading business is an investment business in which individual customers conduct different freely convertible foreign exchange transactions in banks to obtain higher interest income, exchange rate appreciation income or avoid exchange rate risk through foreign exchange trading; Personal foreign exchange settlement and sales business refers to the exchange transaction between RMB and other convertible currencies within the limit specified in the policy.
China Everbright Bank Company Limited Co.Ltd(601818) financial market analyst Zhou Maohua said that from the previous tightening of personal precious metal business by some banks and the current complex environment faced by the foreign exchange market, the recent tightening of personal foreign exchange trading business by some banks is mainly to prevent potential risks:
First, guard against market risks. At present, the global epidemic is not under control, international geopolitical conflicts are rising, sharp turns are made in economic policies, the economies and policies of various countries are divided, and the uncertainty of the global economic outlook continues to haunt the market with violent fluctuations;
Second, implement the investor suitability management obligations. To a certain extent, it is helpful for the bank to adjust the trading obligations of the potential foreign exchange market and prompt the potential investors to a certain extent. The regulatory authorities’ requirements for financial institutions to strengthen the appropriateness management of investors have been significantly improved;
Third, prevent institutional market reputation risk. Some banks adjust relevant businesses according to changes in the market environment, which also helps to reduce potential investment business disputes and market reputation risks.
In addition, a person from the International Business Department of a joint-stock bank told the Chinese reporter of Securities Times securities firm that the personal foreign exchange trading adjusted by ICBC this time should be the business of margin leveraged trading. “After the ‘crude oil treasure’ incident of the Bank of China, most banks are shrinking their personal derivatives business.” The source revealed that his institution also has personal foreign exchange trading, “but most of them are solid trading, not margin trading, which is not affected”.
bank’s personal derivatives business continues to tighten
Industrial And Commercial Bank Of China Limited(601398) is not the first commercial bank to announce the suspension of individual foreign exchange trading business
In August last year, Hua Xia Bank Co.Limited(600015) once announced that in order to comply with the changes of the market situation, the individual foreign exchange trading business will be suspended from 0:00 on December 1, 2021, and the resumption time of the business will be notified separately. Although the bank subsequently deleted the announcement, it also confirmed to the media that the business would be suspended as scheduled.
Earlier last July, China Merchants Bank Co.Ltd(600036) issued five announcements in one breath, announcing the adjustment of a number of personal precious metal business and personal foreign exchange business. The new version of the agreement officially came into force on August 11 of that year.
According to the announcement of the bank at that time, CMB will gradually close the business functions such as personal paper precious metal two-way trading, solid paper gold paper silver trading, “zhaocaijin” and personal two-way Foreign Exchange Trading (excluding non solid foreign exchange trading) for non position customers who meet certain conditions. The position customers of these businesses will not be able to open new positions after August 23 last year. At the same time, the personal foreign exchange option business of China Merchants Bank will stop selling new products from now on. After the expiration of all existing products, it will no longer be open to individual customers.
CMB also reminded that in view of the high risk in the foreign exchange market, the bank will further strictly restrict the individual two-way foreign exchange trading business in the future. If there is a personal two-way foreign exchange product position balance, it is necessary to keep an eye on it and do a good job in position management to reduce the position balance in a timely manner.
In addition, the Chinese reporter of the securities firm found that Industrial And Commercial Bank Of China Limited(601398) has suspended the opening of trading accounts for new customers of account foreign exchange business since October 17, 2021, and suspended the opening of all trading varieties of account foreign exchange business since November 14, 2021.
some analysts told reporters that the personal foreign exchange business strengthened by the bank has the nature of derivatives, “which is completely different from the exchange of RMB for foreign currency in the bank. The risk is very high and the fluctuation range is large”. The adjustment of relevant businesses by banks is also equivalent to reminding investors of market risks and their rational and cautious operation, which will help to reduce the irrational speculation in the market
After the “crude oil treasure” incident, a number of banks, including large state-owned banks and joint-stock banks, successively issued announcements to adjust relevant account transactions. Since then, the banking industry has continued to tighten personal financial derivatives business, including the suspension of new accounts for personal precious metal investment business under the guidance of supervision at the end of 2020.
Since the first quarter of this year, a number of joint-stock banks such as China Citic Bank Corporation Limited(601998) Shanghai Pudong Development Bank Co.Ltd(600000) are still releasing announcements on customer risk warning of precious metal business, reminding investors: “there are many uncertain factors affecting the market operation in the near future, the international precious metal market fluctuates violently, and the market risk is significantly increased.
Investors should pay attention to their positions in time, reasonably control their positions and invest rationally. “
“The price of financial derivatives fluctuates greatly, which has high requirements for investors’ professional level and risk tolerance. The participation of ordinary individual investors is tantamount to gambling in disguise, and the result of loss has long been doomed.” In the middle of last year, Guo Shuqing, chairman of China Banking and Insurance Regulatory Commission, said at the 13th Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) forum that from the perspective of mature financial markets, institutional investors are mainly involved in financial derivatives investment, which is very unsuitable for personal investment and wealth management.
will business reopen
“Previously, the ‘crude oil treasure’ incident conducted a stress test on the risk control ability of financial derivatives trading of traditional commercial banks, and the results were not satisfactory.” An industry insider believes that the financial derivatives business may be diluted in the banking system, “the trading mode of financial derivatives has the color of ‘gambling’, that is, when customers do more, banks short. Vice versa, this kind of mode does not meet the current policy guidance of commercial banks to return to serving the real economy and enterprise comprehensive financial services, as well as the regulatory requirements of separate operation”.
Zhou Maohua believes that this time some banks tighten the business, but it does not mean closing the business. After all, the business has market demand; As the prospect of the foreign exchange market is still gradually clear, the follow-up related businesses are expected to reopen.
“In addition to the RMB exchange rate, the US dollar, Japanese yen, euro, British pound and some emerging market currencies have fluctuated sharply recently.” “Banks actively adjust their personal foreign exchange trading business to remind the market of potential market risks to a certain extent. It is necessary for investors to pay attention, reassess their risk tolerance, do relevant market research and analysis, and avoid potential market fluctuation losses,” he said
some insiders also pointed out that if relevant businesses are restarted in the future, banks also need to improve their risk control ability, system and mechanism
At present, traditional commercial banks still have some defects in the risk control ability of financial derivatives intermediary business. At the same time, they also lack a reasonable dispute settlement mechanism. In the face of high market volatility, there have been continuous disputes between investors and institutions.
“The reason for this problem also lies in the unclear positioning of banks.” The aforementioned insiders told reporters that if the positioning of the bank is “commercial bank + investment bank”, then the relevant business risks must be included, “but if the positioning of the bank is the last barrier to financial risks, and investors subjectively believe that the bank belongs to low-risk channels, requiring the bank to reveal the bottom in case of losses, it will lead to difficulties in the development of intermediate businesses such as financial derivatives”.
The Chinese reporter of securities times · securities firm learned from the customer service of several banks that since last year, the account foreign exchange business of Industrial And Commercial Bank Of China Limited(601398) and the individual foreign exchange trading business of China Merchants Bank Co.Ltd(600036) , Hua Xia Bank Co.Limited(600015) have been suspended, and the customer service said “there is no notice” about the recovery time.
