China's ICBC to restrict some forex and commodities trading

SHANGHAI (Reuters) - Industrial and Commercial Bank of China (ICBC) said on Friday it will restrict certain types of retail businesses involving foreign-exchange and commodities trading.

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

The move by China’s biggest bank comes alongside a range of actions by regulators to curtail financial risks that include dampening commodity price rises, banning cryptocurrency transactions and restricting property speculation.

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

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

Starting from Nov 14, existing clients will be barred from opening new trading positions.

ICBC will also stop taking in new clients from Oct 17 in a similar trading business involving energy, base metal, agricultural products and precious metal indexes, ICBC’s statement said.

“Risk is high these days in global forex and commodities markets, so please pay attention to controlling risks,” the bank said.

In recent months, ICBC and other banks, including Bank of China and China Merchants Bank closed foreign exchange trading businesses that had let individual clients bet on non-yuan currency pairs.

Chinese regulators have been tightening control over the country’s currency market, Reuters reported last month.

Chinese banks have been burnt by risky investment products in the past. Last year, Bank of China’s clients suffered losses in a crude oil-linked product after a slide in oil prices.

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