RMB, foreign exchange funds (USD), standard depot receipts and national bonds can be accessible as cash deposibleformaking daily debt-free settlement. It is required to convert USD to RMB for trade and settlement. Currently, statements of settlement show fund equity in RMB and USD is not taken into consideration. Overseas intermediaries and brokers are required to entrust domestic futures companies for settlemen
Architecture of settlement
Energy Exchange→domestic futures companies→ domestic investors
Energy Exchange→domestic futures companies→ overseas intermediaries, overseas brokers and overseas investors
Risk control in settlement and real-time settlement guarantee that the Exchange will inform the member of adding cash deposit in case funds of the member are insufficient. Additional cash deposit in RMB is preferred. In case of additional cash deposit in foreign currency, the Exchange will make forcible purchase and sale of foreign exchange, i.e., it will forcibly deduct the required funds from foreign exchange account of the member.
Converting USD to RMB: amount of cash deposit = middle rate in USD/RMB disclosed by the Administration of Foreign Exchange on the day * quantity * 0.96
Settlement of futures companies
Accept data→ determine amount of purchase and sale of foreign exchange based on customer’s profit and loss→ send data of customer’s purchase and sale of foreign exchange to the depository bank through foreign exchange purchase and sale system and adjust fund accounts of member and customer in bank→ make advance settlement→ make purchase and sale of foreign exchange→ make re-settlement
Delivery and settlement Price of delivery and settlement refers to the arithmetic average of price of settlement for the final 5 trading dates.