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NDF Foreign Exchange

I. Description
NDF foreign exchange means a forward foreign exchange product offered by ICBC for customers in which profits/losses are calculated as per forward and fixing exchange rate netting and delivery is conducted in USD.

II. Target Customers
The product is applicable to legal person customers of companies, enterprises, public institutions and social groups that are incorporated under the law in China and have passed financial derivative business assessment of legal person customers by ICBC, except for financial institutions.

III. Functional Features
1. NDF foreign exchange can help customers determine foreign exchange trading rate on some future date, and lock exchange rate risk, thereby preventing potential loss resulting from exchange rate fluctuations.
2. NDF foreign exchange targets non-freely convertible currencies in the foreign exchange market. The delivery mode upon maturity is difference delivery. Reference settlement exchange rate is fixed exchange rate of trading currency. Settlement is conducted in USD.

IV. ICBC Advantages
1. Outstanding pricing capacity. ICBC has multiple trading systems (such as Dealing3000 and FXALL) universal in the international market, and can conduct transaction through the international inter-bank foreign exchange market and the world-class foreign exchange market maker to obtain the best prices for customers. Meanwhile, ICBC has professional foreign exchange traders and can calculate forward prices for customers through models.
2. Customized product design. NDF foreign exchange supports over 60 emerging market currencies (such as IDR, BRL, ARS and EGP) and one-month, three-month and six-month NDF with standard/non-standard terms. The product could be customized.

V. Price
ICBC will provide quotation to customers after consideration of market factors, and make real-time updates based on market changes.

VI. Service Channels and Hours
Corporate customers meeting access conditions may inquire ICBC outlets operating derivative transaction business or apply for NDF foreign exchange during hours for corporate business.
In case of any holidays in major international markets, national statutory holidays, and actual rest days after adjustment according to national regulations, or unforeseeable, unavoidable and insurmountable force majeure events such as natural disasters and war, impacts of factors such as international political, economic events and emergencies, or emergencies such as communication breakdown, system failure, power blackout, market trading suspension, or impacts of factors such as financial crisis and changes to national policies, ICBC can temporarily suspend all or some NDF foreign exchange transactions and inform customers in advance as soon as possible or timely through its official website (http://www.icbc.com.cn) or in any other forms that are feasible. During suspension, real-time trading and pending orders cannot be processed, pending orders that have become effective cannot be executed but the validity period of pending orders is not affected.

VII. Operation Guide
The customer may submit NDF foreign exchange instructions to ICBC via outlets.
i. Transaction application and entry
Customers can file with ICBC outlets their trading instructions on trading days. ICBC will review them. Where they need to pay security deposits or take other guarantee measures recognized by ICBC, ICBC shall transfer corresponding amount from their fund accounts to security deposit accounts for freezing or go through mortgage/pledge formalities of performance guarantee. After completing the formalities, ICBC will conclude a transaction with the customer based on elements listed in the customer’s instruction, and issue the conclusion notice to it. Where the customer fails to receive the conclusion notice from ICBC within three working days upon the entry of the transaction, it shall make enquiry with ICBC. If no enquiry is made within ten working days upon the entry of a transaction, affairs concerning such transaction shall be subject to the records of ICBC.
ii. Transaction cancellation
Where the customer needs to modify some factors contained in the instruction for transaction it has filed, it may apply for canceling such instruction to ICBC. The customer may submit a transaction cancellation instruction before ICBC issues the conclusion notice to cancel former transaction instruction. If the notice has been issued, then the former transaction application cannot be cancelled. Upon the receipt of a cancellation instruction from the customer, ICBC may decide whether to accept it on a case-by-case basis. If the related transaction has been concluded, it cannot be cancelled. If not, the instruction can be accepted.

VIII. Risk Prompt
The customer faces market risk resulting from floating profits/losses due to uncertainties in exchange rate fluctuations. Moreover, it also faces another market risk: fixing exchange rate is different from the spot exchange rate on the delivery day.

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

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