Financial Markets
Foreign Exchange for Customers
Spot Foreign Exchange Transactions
Introduction

A Spot Foreign Exchange Transaction refers to trading where both parties transact at the spot exchange rate on a trading day in the foreign exchange market, and settle the foreign currency on the second business day after the trading date (T +2).

Features

Requested by customers, China Merchants Bank New York Branch buys a currency and sells another currency to achieve the conversion between two different currencies.

Multiple transaction methods: in addition to market orders transactions, the Bank also accepts limit orders from customers.

The Bank offers USD, EUR, HKD and other major currencies to meet different needs of customers.

Target Customers

Customers who have the need to buy or sell foreign currencies for their settlement of import and export trades or for payments of the L/C margin, etc.

Customers need to open a foreign currency account at China Merchants Bank New York Branch, or use the FX4CASH product of China Merchants Bank New York Branch to achieve conversion between different currencies without accounts.

Risk Management for Customers
Forward Foreign Exchange Transactions
Introduction

Foreign exchange forward contracts are transactions in which agree to exchange a specified amount of different currencies at some future date, with the exchange rate being set at the time the contract is entered into.

Features

This product can help customers to fix the foreign exchange trading rate of a particular day in advance, lock in the exchange rate, and avoid potential losses arising from future changes in exchange rates.

Multiple transaction methods: In addition to market order transactions, the Bank also accepts limit orders from customers.

The Bank offers USD, EUR, HKD and other major currencies, as well as CNH, to meet the different needs of customers.

Target Customers

It is applicable to customers who need to buy or sell foreign currencies on a particular day in the future to settle the customer’s import and export trades or payments of L/C margin, etc.

Non Deliverable Forward Foreign Exchange (Onshore RMB)
Introduction

A non-deliverable forward foreign exchange contract (“NDF”) is similar to a regular forward FX contract but does not require physical delivery of the designated currencies at maturity. The profit or loss at the settlement date is calculated by taking the difference between the agreed upon exchange rate and the spot rate at the time of settlement, for an agreed upon notional amount of funds. The gain or loss is then settled in the freely traded currency.

Features

Because the physical delivery of onshore RMB is not available overseas, the New York Branch will buy and sell onshore RMB on behalf of customers according to their actual needs and market price fluctuations. The final delivery is carried out according to the difference between contract price and the actual price on the maturity date. On the settlement date, the settlement amount is the difference between the agreed upon exchange rate and the spot rate, for an agreed upon notional amount of funds and settled in UDS.

Customers can request the bank to buy or sell certain onshore RMB at the agreed price on the delivery date specified in the contract, lock in the future price of the onshore RMB, and reduce the risk from large foreign exchange rate fluctuation.

Target Customers

It is applicable to customers who need to buy and sell foreign currencies or onshore RMB in the future to reduce market risk.

USD Interest Rate Swap
Introduction

An interest rate swap is a contract between two counter parties who agree to exchange the future interest rate payments. Usually, it can be the exchange between fixed interest rate and floating interest rate or between two different floating interest rate.

Features

This product is basic interest rate derivative product, and it has a clear and concise structure and flexible contract elements.

Customers can use this product to match the duration of assets and liabilities, manage the basis risk of fixed and floating interest rates and manage interest rate risks, while reducing corporate financing costs.

Target Customers

Financial institutions with demands for interest rate risk management, and non-financial institutions that aim at hedging and need to avoid the interest rate risk are all customers of the interest rate swap business.

Foreign Currency Swap
Introduction

China Merchants Bank New York Branch and customers determine the amount of foreign currency principal on the trading day according to the agreed exchange rate and the amount of foreign currency, exchange principal according to certain exchange methods, and regularly exchange interest payments according to the scale of foreign currency principal and the contracted interest rate. The transaction structure is flexible on principal exchange method.

Features

Customers can use certain existing debt (or assets) for a currency swap to reduce financing cost (or increase asset returns).

Exchange rates can be fixed or floating interest rates.

It can be used to hedge medium to long-term foreign exchange rate risk.

Target Customers

Financial institutions with demands for interest rate and exchange rate risk management, and non-financial institutions that aim at hedging and want to avoid risks from changes in interest rates and exchange rates are all customers of the foreign currency swap business.

Other Financial Instrument for Hedging Foreign Exchange Risk, Interest Rate Risk or Credit Risk.
Investment Management and Services
Yankee CD
Introduction

The Yankee CD is a foreign certificate of deposit denominated in USD, issued in the U.S. to American investors.

Features

Yankee CDs are negotiable instruments and have high liquidity in secondary markets.

Fixed rate deposits and floating rate deposits can be provided according to customer needs.

Target Customers

American onshore financial institutions, funds, and corporate customers.

Global Certificate of Deposit
Introduction

The Global Certificate of Deposit is a certificate of deposit denominated in USD or other currencies, issued to global investors.

Features

Certificates of deposits are negotiable instruments and have high liquidity in secondary markets.

Fixed rate deposits and floating rate deposits can be provided according to customer needs.

Target Customers

Financial institutions, funds and corporate customers.

Two-in-one Deposit Program
Introduction

The Two-in-one Deposit Program refers to the deposit plan where customers package term and demand deposits into China Merchants Bank New York Branch according to a certain proportions, and can yield higher return than the market rate during the term of the deposit.

Features

It enables customers to enjoy the flexibility of demand deposit and overnight deposit rates that are higher than the current market rate.

Fixed term and demand deposits are set proportionally to avoid interest loss arising from early withdrawals.

Target Customers

Corporate customers who have sufficient fund, but a strong demand for flexible deposit plan.

Market-Linked Deposit
Introduction

Market-Linked Deposit refers to the situation where the product interest rate is linked with the market performance of a predetermined target under the premise of ensuring the safety of principal. The extra yield or guaranteed yield depends on the market situation of linked targets during the term.

Features

Flexible linked targets; interest rate, exchange rate, commodity price, credit and index can be selected.

Gain access to more asset classes, and enables deposit funds to participate in international financial markets by using various financial instruments.

With diverse structures, customers can choose the trigger event of a target, and get high yield (interest) if the trigger event occurs during the term, otherwise they will get lower guaranteed yield (interest).

Target Customers

Applicable to those individual or corporate customers who have abundant fund, want to get a higher return, and have a certain ability to analyze financial markets and have a greater tolerance to the corresponding risk.

Interbank Market Transaction, Investment and Financing Services

Interbank transactions that involve exchange rates, interest rates or credit, including but not limited to interbank lending and bills, foreign exchange transactions, bond investments, repurchase and reverse repurchase, and other business.