21 Oct 2010 | Recommendations in light of the amend in Chinese Renminbi US Dollar fixing (CNY SAEC)

The Singapore Foreign Exchange Market Committee (SFEMC) seeks to clarify the application of the ‘CNY SAEC’ rate fixing on the Chinese Renminbi (CNY) currency for 21 October 2010. The CNY SAEC fixing rate was initially published as 6.6495 on the Reuters Screen “SAEC” page at about 9.16am, 21st Oct 10. The rate was subsequently amended to 6.6695 at about 9.36 am on 21 October 2010.

Pursuant to Section 4.7 of Annex A to the 1998 FX and Currency Options Definitions as published by ISDA, EMTA and the Foreign Exchange Committee, SFEMC recommends market participants to treat the amendment of the rate on Reuters Screen “SAEC” Page as a correction. The committee encourages market participants to make reference to the amended fixing rate of 6.6695 for transactions which involve the 21st Oct CNY SAEC rate fixings.

Section 4.7 is extracted below for ease of reference.

“Section 4.7. Corrections to Published and Displayed Rates. For purposes of determining the Spot Rate for any Rate Calculation Date:

(a) In any case where the Spot Rate for a Rate Calculation Date is based on information obtained from the Reuters Monitor Money Rates Service or the Dow Jones Telerate Service, the Spot Rate will be subject to the corrections, if any, to that information subsequently displayed by that source within one hour of the time when such rate is first displayed by such source.

(b) Notwithstanding subsection (a) above, in any case where the Spot Rate for a Rate Calculation Date is based on information published or announced by any Governmental Authority in the relevant country, the Spot Rate will be subject to the corrections, if any, to that information subsequently published or announced by that source within 5 days of the Rate Calculation Date.

(c) In the event that a party to a Transaction notifies the other party to the Transaction of any correction referred to in subsections (a) or (b) above no later than 5 days after the expiration of the period referred to in such subsection, an appropriate amount will be payable as a result of such correction (whether such correction is made or such notice is given before or after the Settlement Date of the Transaction), together with interest on that amount at a rate per annum equal to the cost (without proof or evidence of such cost) to the relevant party (certified by it) of funding that amount for the period from, and including, the day on which, based on such correction, a payment in the incorrect amount was first made to, but excluding, the day of payment of the refund or payment resulting from such correction.”