Product Overview

Forward foreign exchange settlement and sale refer to a contract between a client and a bank to exchange foreign currency at a future date, specifying currency, amount, term, and exchange rate. Upon maturity, the currency exchange is made according to these terms. In a forward foreign exchange settlement, the client sells foreign currency to the bank, while in a forward foreign exchange sale, the client buys foreign currency from the bank.

Contracts can be categorized by settlement method at maturity into full delivery and non-deliverable forward (NDF) contracts. Based on the choice of settlement date, they are classified into regular forwards and optional delivery forwards. Regular forwards require settlement on a fixed date, while optional delivery forwards allow settlement within a specified future timeframe.

Product Features

Forward foreign exchange settlement and sale is a fundamental renminbi foreign exchange derivative product with a straightforward structure. It helps clients lock in future exchange rates, aiding in hedging and risk mitigation.

Target Clients

This product is ideal for clients with exchange rate risk management needs.

Application Procedures

Risk Tolerance Assessment: Clients must complete a risk tolerance assessment before trading. Bank of China can only offer products with a risk rating equal to or lower than the client's assessed risk tolerance.

Account Opening and Agreement Signing: Before conducting any transactions, clients must open relevant accounts with BOC and sign derivative trading agreements.

Credit Facility or Margin Settlement: A sufficient credit line or corresponding margin is required.  

Transaction Application and Background Review: Clients must submit a transaction application specifying all trade details. BOC will review the transaction's purpose and the client's actual demand to ensure the risk characteristics of the client's underlying assets or liabilities align with the derivative transaction.

Execution: Upon transaction completion, BOC provides the client with relevant trade confirmation documents.

Settlement: Both parties settle the RMB and foreign currency funds on the value date according to the agreed transaction terms.

BOC Advantages

BOC is a market maker for all currency pairs in the interbank RMB foreign exchange market and has been honored as the Best Renminbi-Foreign Exchange Market Maker by the China Foreign Exchange Trade System for multiple years consecutively.

BOC provides forward foreign exchange settlement and sale quotes for a wide range of currencies with tenors extending up to 10 years, meeting clients' diverse and long-term hedging needs.

BOC offers multiple transaction channels, including branch counters, online banking, mobile banking, and corporate electronic trading platforms, delivering clients efficient and convenient quoting and trading services.

Risk Disclosure

Before proceeding with the transaction, please read the risk disclosure statement to fully understand the terms and associated risks of the transaction. Potential risks may include, but are not limited to, policy, market, and liquidity risks.

The above content is for reference only. Specific product information is subject to BOC's official product documents.