Introduction to Position Accounting

In China as part of the regulatory reporting, in foreign exchange market, PBOC (People’s Republic of China), designated banks should establish separate accounts for purchase and sale of foreign exchange for customers and for their own accounts, and shall establish transactions for working position limits through the market versus those among the different arms of the same institution. Hence, the position accounts are moved to the headquarters.

The designated banks shall convert the balance of allowable foreign exchange working position of each business day into the US dollar. Any losses or profits resulted from such a conversion shall be dealt with under other foreign currency transaction accounts and shall not be calculated into the allowable foreign exchange working position.