Members of the Working Group Chaired by Michael R. Bloomberg Lead Effort to Establish Trading and Clearing of RMB in the U.S.
BNY Mellon Corporate Trust to Act as Issuing Agent with DTCC to Settle RMB Transaction
NEW YORK, May 20, 2016 - Industrial and Commercial Bank of China (ICBC) has taken the first steps to enable institutions to issue and clear financial products denominated in Chinese Renminbi (RMB) in the U.S.
ICBC is the largest bank in the world by total assets, tier 1 capital and pre-tax revenue. ICBC's New York Branch issued an RMB-denominated certificate of deposit (CD) today which will be settled in the U.S. Trading and settlement of the RMB-denominated CD opens the door for other borrowers looking to issue RMB-denominated securities in the U.S. This will further strengthen the financial cooperation between the two countries, according to a working group of prominent financial leaders.
The Working Group on U.S. RMB Trading and Clearing aims to evaluate opportunities to develop and expand the trading, clearing and settlement of RMB in the United States. The Group is chaired by Michael R. Bloomberg, with Mary Schapiro serving as Vice-Chair and Thomas J. Donohue, Timothy F. Geithner and Henry M. Paulson, Jr. serving as Co-Chairs. ICBC, DTCC and BNY Mellon are members of the Working Group.
ICBC Chairman Jiang Jianqing will meet today with Bloomberg to discuss the new product. “The launch represents a significant milestone in serving to meet the growing demands among investors in the United States and around the world to have access to the RMB,” said Jiang. “The RMB is an increasingly important part of the global payments system, as payments in this currency are growing faster than overall global payments in all currencies.”
"I'm pleased to see members of the Working Group taking this concrete step to further develop RMB markets in the United States," said Bloomberg. "I'm confident this will be the first of many developments to come."
The value of RMB payments increased 18.46 percent from February 2016 to March 2016, compared with a 10.67 percent increase in all payments currencies during the same period, according to SWIFT. In March, SWIFT reported that the RMB was the fifth most active currency for global payments by value with a share of 1.88 percent, a slight increase from 1.74 percent in February 2016.
The fixed rate CD is valued at 500 million RMB, has a 31-day maturity and is the first RMB-denominated financial product eligible to be settled through The Depository Trust Company, a wholly owned subsidiary of The Depository Trust & Clearing Corp (DTCC). Previous issuances of RMB-denominated CDs by New York branches of Chinese banks were settled through Euroclear in Europe. BNY Mellon Corporate Trust is the issuing and paying agent on the CD.
“Our Corporate Trust team looks forward to its future collaboration with ICBC and DTCC and providing its solutions for trading, clearing and settlement of RMB in the U.S.” said Brian Shea, Chief Executive Officer of Investment Services at BNY Mellon. “This innovation paves the way for us to further develop connections into major RMB trading and clearing centers across the world.”
“DTCC is proud to support the efforts of the RMB industry working group as it looks to increase financial cooperation and activity between the U.S. and China,” said Michael Bodson, Chief Executive Officer of DTCC. “The issuance of the RMB-denominated CD in the U.S. is an important milestone and we are honored to play a critical role in this initiative, in partnership with ICBC and BNY Mellon.”
Notes to editors
Industrial and Commercial Bank of China
Industrial and Commercial Bank of China was established on 1 January 1984. On 28 October 2005, the Bank was wholly restructured to a joint-stock limited company. On 27 October 2006, the Bank was successfully listed on both Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited. Through its continuous endeavor and stable development, the Bank has developed into the top large listed bank in the world, possessing an excellent customer base, a diversified business structure, strong innovation capabilities and market competitiveness and providing comprehensive financial products and services to 5,320 thousand corporate customers and 496 million personal customers. The Bank continued to promote reform, innovation and operation transformation.
The Bank’s assets and liabilities business kept stable profitability during the structural adjustment. Retail banking, asset management and investment banking became important engines driving the profit growth, and the development of internet-based finance with leading edge gave impetus to the fundamental reform on operation and management models and service methods. The pattern of internationalized and diversified operation was further improved, covering 42 countries and regions, and overseas operations and comprehensive subsidiaries of fund, insurance and leasing contributed more to the Bank’s profit-making. In 2015, the Bank was named the “Best Emerging Markets Bank” by Euromoney, and ranked 1st place among the Top 1000 World Banks by the Banker and the Global 2000 listed by the US magazine Forbes for the third consecutive year.
BNY Mellon is a leading provider of corporate trust services to the debt capital markets, offering customized and market-driven solutions to investors, bondholders and lenders. As of March 31, 2016, BNY Mellon Corporate Trust served as trustee and/or paying agent on more than 58,000 debt-related issues globally. The corporate trust business utilizes its global footprint and expertise to deliver a full range of issuer and related investor services including trustee, paying agency, fiduciary, escrow, and other financial services. BNY Mellon acted as trustee for the first Singapore-cleared offshore RMB bonds and has extensive connectivity into major RMB trading and clearing centers in the United States, Singapore, Hong Kong and London.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of March 31, 2016, BNY Mellon had $29.1 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
The Depository Trust and Clearing Corporation
With over 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From operating facilities, data centers and offices in 16 countries, DTCC, through its subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions, mitigating risk, increasing transparency and driving efficiency for thousands of broker/dealers, custodian banks and asset managers worldwide. User owned and industry governed, the firm simplifies the complexities of clearing, settlement, asset servicing, data management and information services across asset classes, bringing increased security and soundness to the financial markets. In 2015, DTCC’s subsidiaries processed securities transactions valued at more than US$1.5 quadrillion. Its depository provides custody and asset servicing for securities issues from over 130 countries and territories valued at US$45.4 trillion. DTCC’s global trade repository maintains approximately 40 million open OTC positions and processes roughly 280 million messages a week. To learn more, visit us at www.dtcc.com or follow us on LinkedIn, Twitter and YouTube.