The First Batch of Financial Institutions in Shanghai Launches the Free Trade Account Service

The Shanghai Headquarters of the People’s Bank of China  18 June, 2014

The Shanghai Headquarters of the People’s Bank of China officially launched the free trade account business on June 18, 2014.

The seven banks that have passed prudent assessment of risk including the Shanghai branches of the Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Shanghai Pudong Development Bank, Bank of Communications and China Merchants Bank, and the Bank of Shanghai have signed agreements with enterprises to provide the FTA service. Five banks including the Shanghai branches of the BOC, ICBC, CCB, SPDB and the Bank of Shanghai connected their systems to the Shanghai Headquarters of the PBOC’s system, and started the FTZ services. The BOC was the first to open a FTA, which market the official start of the FTA service.

Since then, the qualified FTZ-based and offshore entities can open an FTA and use the service via the financial entities that have passed system inspection. The different types of FTAs include FTE for FTZ-based institutions and FTZ-registered individuals, FTN for offshore institutions, FTU for financial institutions, FTI for Chinese individuals and FTF for foreign individuals. FTZ-based entities and offshore institutions can make cross-border capital settlement under current account and direct investment via the FTA. The applications of FTA will further expand to support free trading, investment and financing activities as relevant policies being introduced in a continuous manner.