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Foreign Exchange

Bank of China - New York actively participates in the U.S. foreign exchange market, money market and capital market. We enjoy superior business relationships with many major U.S. and international financial institutions to provide you with sound business and consulting services in the fields of foreign exchange and funds management.

Foreign Exchange and Funds Department business includes FX Spot, Forward and Swap transaction service, local and foreign currency fund management.

The following is some details about our most popular customer-based products:

I.      Customer-based foreign exchange transaction:

This is a foreign exchange transaction that the customer and the bank will settle on the maturity date and by the exchange rate which are specified in the contract formed on the trading day.

1.   Target Customer

It will benefit companies with needs of foreign currency, such as import/export settlements or margin deposits for L/C. The customers must have an account at the bank.

2.   Product Advantage

Customers can ensure the currency exchange rate for a future delivery date at the current trading date to hedge its currency risk exposure so that they can concentrate on their core business operations.

3.   Product Function

Customers can buy one currency and sell the other currency by the contracted foreign exchange rate at a specific future maturity date to realize currency conversion.

4.   Currencies Available

US dollar(USD), HK dollar(HKD), Euro(EUR), Japanese Yen(JPY), Pound Sterling(GBP), Swiss franc(CHF), Australia Dollar(AUD), Canadian Dollar(CAD) and New Zealand Dollar(NZD).

5.   Term

Up to one year, terms can be tailored to match customer needs.

6.   Trading Procedure

The customer will submit an order in written form to specify the transaction details. The bank will send a trade confirmation to the customer upon completion of the trade. On the maturity date specified, the bank will make the currency exchange for the customer according to the contract rate. The customer can also request the bank to square the position or extend the term before maturity date.

7.   Risk Disclosure

Due to foreign exchange market fluctuations, customer might achieve gain or suffer loss resulted from the difference between the contract rate and the market prevailing exchange rate on the maturity date.

8.   Special Notes

Since 2010, the USD/CNY foreign exchange product has been available to customers.

II.     NDF (Non-Deliverable Forwards):

The NDF transaction here refers to the transaction that the customer and the bank specify the future maturity date, USD/CNY conversion rate and nominal amount on the trading date, and then, on the maturity date, the netting difference calculated according to the nominal amount and the difference between specified rate and market prevailing spot rate will be settled.

1.   Target Customer

It will benefit companies with future needs of USD/CNY conversion, such as import/export settlements or margin deposits for L/C. The customers must have USD accounts at the bank.

2.   Product Advantage

Customers can ensure the currency exchange rate for a future delivery date at the current trading date to hedge its currency risk exposure. Unlike a traditional forward foreign exchange transaction, which will have real exchange of two currencies, an NDF transaction will only involve paying or receiving the netting difference on the maturity date.

3.   Currencies

US Dollar (USD) and Chinese Yuan (CNY)

4.   Term

Up to one year, terms can be tailored to match customer needs.

5.   Trading Procedure

The customer will submit an order in written form to specify the transaction details. The bank will send a trade confirmation to the customer upon completion of the trade. On the maturity date specified, the bank will net off the difference and conduct the distribution or collection. The customer can request the bank to square the position or extend the term before maturity date.

6.   Risk Disclosure

Due to market fluctuations, customer might have a net gain or loss resulted from the difference between the NDF contract rate and the exchange rate prevailing on the maturity date.

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