FAQ for CIPS Participants Application

1.What is the general idea of CIPS participants administration?

 

In November 2023, under the guidance of the People's Bank of China (PBOC), CIPS Co., Ltd. (referred to as “the Company”) formulated the Interim Measures for Administration of CIPS Participants (hereinafter referred to as the “the Measures”), to clarify the main responsibilities of the participants administration, and to establish mechanism for managing CIPS participants regarding access, change, withdrawal and business activities, so as to guarantee safe and stable operation of CIPS.

 

The Company is responsible for managing CIPS participants regarding access, change, withdrawal, business activities, and etc., providing direct management and service to direct participants, and guiding them to manage and serve indirect participants. Direct participants should provide direct management and service to indirect participants and other customers.

 

2.How to apply to become CIPS direct participants?

 

Pursuant to the Article 5 of the Measures, those applying to become direct participants should meet the following conditions:

 

1.Banking financial institutions, financial market infrastructure operators and other institutions established in accordance with the law and having the status of a legal person or being a branch of this legal person designated by a legal person.

 

2.Applicants should have sound RMB settlement capability. When a banking financial institution submits an application, it should fulfil one of the following conditions:

 

(i) Business volume processed through CIPS in the previous year is ranked in the top 10% among the legal institutions in the world or in the country or region where it is located.

 

(ii) Business volume processed through CIPS in the previous year ranked among the top 15% of the legal institutions in the world or in the country or region where it is located, and the average annual business growth rate in the past two years exceeds 20%.

 

(iii) Volume of international settlement business in the previous year ranked among the top in the country or region where it is located or has the characteristics of international settlement business.

 

(iv) It would contribute to facilitating the global use of RMB and cross-border settlement.

 

(3) Applicants have in place necessary infrastructure and technical capabilities to meet the technical and security requirements for business and connection with CIPS.

 

(4) Applicants have in place practicable programme to prevent and address liquidity risks.

 

(5) Applicants have in place sound business, compliance, risk and system management systems.

 

(6) Applicants have good financial, credit and reputation, and there are no circumstances under which significant risks would be posed to CIPS or other participants.

 

Pursuant to the Article 6 of the Measures, those applying to become direct participants should submit following application materials to the Company.

 

(1) An application form that includes basic information of the organization, business start-up situation and development plan, system construction plan, risk and compliance situation, and so on.

 

(2) Proof of business qualification, including business licence, financial licence or a copy of the local registration document issued by the local regulatory authority and its Chinese translation. Overseas applicant institutions with commercial presence in the People's Republic of China are required to provide relevant certificates.

 

(3) Financial and credit information supporting documents. Including: financial reports audited by accounting firms in the last three years, credit ratings issued by the local regulatory bodies or rating agencies in the last year.

 

(4) Business management system related to CIPS business. Including but not limited to business management, compliance management, risk management, internal control, information security, business continuity management.

 

(5) Contingency plans related to the conduct of CIPS business. Including but not limited to liquidity risk management, compliance, risk management contingency plan, and etc.

 

Applicants belonging to the same financial group as the existing direct participant are exempted from submitting the materials stipulated in items (2) and (3) of this Article.

 

3.How does the Company assess direct participants application?

 

Upon receipt of complete application materials, the Company, following the principle of facilitating healthy development of the RMB cross-border payment business, should assess the completeness of the application materials, as well as the applicant's business capability, technical capability, risk and compliance management, etc. If the assessment is passed, the applicant would be admitted and the applicant should be notified; if the assessment is not passed, the applicant should be informed of the reasons for not being admitted.

 

4.How to apply to become CIPS indirect participants?

 

Pursuant to the Article 15 of the Measures, an applicant for an indirect participant should meet the following requirements:

 

(1) Established in accordance with the law, possessing qualification of a legal person or being a banking financial institution designated by a legal person.

 

(2) Possessing good RMB settlement business capability.

 

(3) Having sound business, compliance, risk and system management systems.

 

(4) Having a good reputation.

 

Those that meet above requirements should entrust direct participants to submit the registration. After direct participants complete the review of the applicant, they submit Registry Form for CIPS Indirect Participant to the Company.

 

For those other than banking financial institutions applying to become indirect participants, they should contact the Company in advance through the direct participants to obtain additional material requirements.

 

5.How does the Company process indirect participants registration?

 

Upon receipt of complete registration materials, the Company shall decide whether it should be registered, should not be registered or should be requested for supplementary materials.

 

If it is to be registered, the Company shall complete the system setup, including creating CIPS Code, setting the effective dates, etc. CIPS will broadcast the announcement to all direct participants before the effective dates.

 

If it is requested for supplementary materials or returned to the direct participant for further review, the Company should notify the direct participant.

 

If it is not to be registered, the Company should inform the direct participant to notify the applicant of the reasons.

 

6.How to obtain the Interim Measures for Administration of CIPS Participants?

 

Please Login in to “Community” of the Company’s official website () and download it from “Rules and Standards-Business Rules”.