The Working Group on U.S. RMB Trading and Clearing Applauds S&ED Action, Publicly Releases Roadmap for Action

Recommendations of Working Group and S&ED Actions Include the Establishment of Clearing Banks or Clearinghouses in the United States, RQFII Allocation, and Improved Access to China’s Bond Market

New York, NY – June 7, 2016 – Following today’s issuance of the Strategic & Economic Dialogue communique between the United States and China, the leaders of The Working Group on U.S. RMB Trading and Clearing publicly expressed their strong support for the RMB related initiatives reflected in the communique and released a set of Working Group recommendations that had been distributed to U.S. and Chinese authorities on June 2nd.

The Working Group, a collection of senior leaders in finance and U.S. industry, has been meeting since January 2016 to identify, evaluate, and recommend opportunities to develop and expand the trading, clearing, and settlement of RMB in the United States. The group was formed to carry out the bilateral mandate to explore new ways to facilitate RMB trading agreed to by President Obama and President Xi during the U.S.-China summit in September 2015.

“I want to congratulate U.S. and Chinese leaders on a productive Strategic & Economic Dialogue, and it’s very encouraging that both sides have endorsed a framework for facilitating RMB trading and clearing in the U.S. for the first time,” said Michael R. Bloomberg, Chair of the Working Group and founder of Bloomberg L.P. “This will help bring new momentum to the Working Group’s efforts to expand trade between the U.S. and Chinese by allowing the RMB to be cleared in the U.S.”

Under the leadership of Mr. Bloomberg, Vice-Chair Mary Schapiro and Co-Chairs Thomas J. Donohue, Timothy F. Geithner and Henry M. Paulson, Jr., the Working Group surveyed corporates and others to assess the demand for RMB-denominated products and services in the United States. The group found demand is growing, and could be fueled by the occurrence of certain events, such as the potential inclusion of Chinese debt and equity securities in major securities indices.

The findings also suggest that U.S.-based customers, especially small and middle-market businesses, would like more options to use RMB in the United States to reduce the complexity, costs and inefficiencies currently associated with accessing overseas accounts and making and receiving RMB payments.  “The recommendations of the Working Group and the S&ED actions are a win for the American, Chinese and global economies. American Main Street businesses will gain the access and tools to be competitive, as the Yuan continues to evolve gradually as an international currency,” said Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. “This is critical for a growing domestic and global economy.”

Based on these findings, the Working Group’s Roadmap for Action includes commitments by various group members to explore targeted investments designed to meet future growth in RMB payments, products, and services quickly and cost effectively. These actions include:

  • Improvements in domestic banking services, including streamlining correspondent banking services and developing expanded multicurrency account capabilities;
  • Enhancements to existing financial market infrastructures to allow the clearing and settlement of RMB payments and RMB-denominated financial instruments; and
  • Development of new markets, including RMB-denominated cash management and fixed-income products issued in the United States.

The Working Group also proposed that U.S. and Chinese authorities consider several policy actions designed to provide increased incentives to transact and invest in RMB, including:

  • Improved access to Chinese capital markets for U.S.-based participants, including a significant RQFII allocation of, at minimum, USD 30 billion. In view of the size and depth of the U.S. financial markets, the allocation should grow quickly to meet the market needs;
  • An agreed-upon framework to establish one or more clearing banks or clearinghouses in the United States; and
  • Steps to institutionalize an ongoing dialogue regarding RMB internationalization between the U.S. and China.

Mr. Bloomberg welcomed China’s announcement of a $38 billion RQFII quota to the U.S.: “We are pleased to see that the S&ED has wisely agreed upon a significantly higher RQFII allocation that better reflects the size of the US asset management industry, currently the world’s largest. This is a highly encouraging development that will benefit businesses in both nations.”

The full Roadmap for Action can be found at: