China’s ICBC to restrict some forex and commodities trading

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SHANGHAI (Businesshala) – The Industrial and Commercial Bank of China (ICBC) said on Friday it would restrict certain types of retail businesses involving foreign exchange and commodity trading.

FILE PHOTO: The Industrial and Commercial Bank of China (ICBC) logo is pictured at the entrance of its branch in Beijing, China April 1, 2019. Businesshala / Florence Low / File photo

The move by China’s largest bank comes alongside a series of actions by regulators to reduce financial risks, including slashing commodity prices, banning cryptocurrency transactions and restricting asset speculation.

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The bank’s sanctions also come as global energy prices have risen in response to power shortages in China and some other parts of the world.

ICBC said in a statement that from October 17 it would suspend new account openings for so-called “account forex trading”. Under this business, individuals may trade forex against the yuan for speculative or hedging purposes, and may not withdraw or transfer foreign currencies from trading accounts.

Existing clients will be barred from opening new trading positions from 14 November.

The ICBC statement said that ICBC will stop accepting new clients from October 17 in similar trading business involving energy, base metals, agricultural products and precious metal indices.

“The risk is high these days in the global forex and commodity markets, so please focus on controlling the risks,” the bank said.

In recent months, ICBC and other banks, including Bank of China and China Merchants Bank, have shut down forex trading businesses that let individual clients bet on non-yuan currency pairs.

Chinese regulators have tightened controls on the country’s currency market, Businesshala reported last month.

Chinese banks have been burned by risky investment products in the past. Last year, Bank of China customers suffered losses in a crude product after falling oil prices.

Reporting by Shanghai Newsroom; Editing by David Goodman and Jane Merriman

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