HSBC China and Nanyang Commercial Bank China are the first batch of overseas banks approved to open free trade accounts for clients in the Shanghai free trade zone to handle money transactions more freely, China’s central bank said yesterday。
HSBC China yesterday confirmed it has signed agreements with more than 30 pharmaceutical, energy and automobile companies which intend to use the new FT accounts for more efficient cross-border transactions between the FTZ and overseas markets。
Helen Wong, president of HSBC China, said the FT account allows the bank to offer a wider range of financial solutions to help its clients expand overseas。
“The FT account marks a milestone innovation in the drive for financial reforms in the free trade zone,” Wong said. “By connecting the Shanghai FTZ with offshore markets, the new account allows companies to conduct transactions more easily in meeting their financing needs for cross-border trade and investment to support the real economy。”
The FT account is a special financial institution account introduced by the People’s Bank of China in May to separate cross-border transactions done in the Shanghai FTZ from those onshore。
Banks are required to connect their FT account systems with the PBOC, which can then monitor all transactions as required under risk management rules。
The FT account is an example of financial reforms to ease control on capital flow between the FTZ and offshore markets。
The FT account currently handles yuan-denominated transactions for trade and foreign direct investment. But authorities are looking to include foreign currencies under the FT account。
A total of 13 domestic banks and the Shanghai Gold Exchange have been approved in three batches to conduct FT account services。
Nanyang Commercial Bank is solely owned by the Bank of China (Hong Kong) Ltd and is registered as an overseas bank on the Chinese mainland。
