Citic Securities, Huatai Securities and China Merchants Securities are allowed to conduct interbank forex business both on a proprietary basis and on behalf of clients.

SAFE (the State Administration of Foreign Exchange) has granted approval to three additional brokerage firms to trade foreign exchange on the interbank market, the first time in over four years such approvals have been granted.

The three firms to receive the approvals were Citic Securities, Huatai Securities and China Merchants Securities. They are allowed on a pilot basis to conduct interbank forex business both on a proprietary basis and on behalf of clients - on the premise of "controllable risks".

The main players are commercial banks and companies that require foreign currency for their import or export businesses. Previously, the only non-banks that could trade forex in the interbank market were Guotai Hunan Securities and Harvest Fund Management.

The move to grant new approvals will help to boost the development of local currency and foreign currency business at domestic securities companies, and promote quality growth of the financial sector, SAFE said. It is also aimed at expanding forex market participants and improve the market-based exchange rate formation mechanism for the renminbi.

The move is part of a broader effort to deepen financial reforms, open up the foreign exchange market and improve market liquidity.

Recently, China launched new FX options trading pairs in the interbank market. Previously, all interbank FX options contracts had the Chinese renminbi as one side of the pair.

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