Royal Bank of Canada have completed the first cross-border Renminbi (RMB) payment on Canada’s new RMB Trading Hub, see, through the hub’s designated clearing bank, Industrial & Commercial Bank of China (Canada).

RBC was the first North American bank to have a presence in China, having entered into a correspondent banking relationship with the People’s Bank of China in 1954. RBC also has experience with Chinese financial markets in advising clients on direct investment in Chinese mainland securities.

First RMB-denominated money market ETF 

Euroclear Bank, the Brussels-based international central securities depository, and CCB International Asset Management, the asset management arm of CCB International (Holdings) (CCB International), and Commerzbank AG have teamed-up to issue the first ever renminbi-denominated money market ETF in international form: Commerzbank CCBI Investment Funds ICVC - Commerzbank CCBI RQFII Money Market UCITS ETF.

In this industry first, the ETF will be listed and traded in renminbi, pound and euro on the London Stock Exchange, and settle directly in the ICSD - Euroclear Bank. CCBIAM and Euroclear Bank have combined their efforts to launch renminbi settlement and laid the foundations for future renminbi-denominated ETFs to develop in European markets.

Hu Zhang Hong, chief executive officer of CCB International stated: "Our partnership with Euroclear is the result of months of co-operative discussion about how we can best tap into London-based investors, and in future, other pools of wealth. London has long been a champion in promoting initiatives and enhancing infrastructure, and has become a vibrant renminbi centre. I would like to pay tribute to the key infrastructure provider - Euroclear - in making today's launch a reality. But this is just the beginning; we will continue the fruitful dialogue on the international renminbi market with our Hong Kong and mainland regulators and our partners in Europe."

China’s International Payment System will launch in September

China’s new international payment system CIPS is expected to be ready by September. It is hoped that the system will reduce cost of payments in China and cut down on the abnormally high rate of bank message rejections in RMB denominated transactions, e.g. SWIFT estimates that there is a 15% rejection rate in RMB-denominated payments, where the average rate of rejection for all other currencies is about 5%. 

There have been multiple versions of characters, and confusions between simplified Chinese character bank instructions, traditional character uses, and even Taiwan has a slightly different format. Mis-matches in character meanings in different Chinese usage systems can often cause an entity within the payments chain to reject instructions. 

For CIPS the challenge will be to adopt a single standard and ensure that that is widely adopted for China payments, language in banking, and information field requirements. (This could take a while.)

Freescale netting and automated USD sweeps from Tianjin, China to Hong Kong 

In January 2015, Freescale set up a US dollar collect-and-sweep solution with JP Morgan, connecting Tianjin and its HK regional treasury. J.P. Morgan believe the new structure to be the first US dollar-denominated cross-border sweeping and centralised payment and collection solution from an account based in Tianjin, a major national centre for manufacturers in China.

Local netting is used to minimise the funds that are swept from US dollar settlement accounts with local banks in China, to the domestic header account for Freescale Semiconductor (China) with JP Morgan in Tianjin.

JP Morgan also centralises all payments and collections for Freescale, while providing cross-border netting.