The Central Bank Introduces New CIPS Regulations to Strengthen Account Security and Reinforce Risk Control Foundations

On December 26, the People's Bank of China officially issued the new version of the "Cross-Border Renminbi Payment System Business Rules," aiming to provide a more solid institutional guarantee for the safe and efficient operation of the Cross-Border Renminbi Payment System (CIPS) by strengthening account management, optimizing fund flows, and clarifying business boundaries.

The new rules enhance the central bank's unified and centralized management of operational institutions' fund accounts. The regulations require that, based on CIPS business needs, operational institutions can open dedicated clearing accounts at the People's Bank of China for the centralized deposit of all participants' settlement funds.

Meanwhile, CIPS accounts must be separately accounted for with the operational institutions' own funds, and it is strictly prohibited to open accounts at commercial banks to hold these settlement funds, aiming to prevent risks of fund sedimentation and commingling, and to ensure fund security.

This adjustment will directly impact the liquidity management models of CIPS participants. Participants who open accounts in CIPS can independently or designate custodial institutions to open clearing accounts at the People's Bank of China, enabling flexible liquidity management and improving fund utilization efficiency. All accounts must comply with the rule of "no overdrafts, zero balance at the end of each day," ensuring overall system risk remains controllable.

Additionally, the new rules clearly define and restrict the scope of business for direct participants in financial market infrastructure (such as exchanges, central counterparties, etc.).

Such participants are required to conduct fund settlements through CIPS accounts according to their transaction systems, securities settlement systems, or central counterparty functions.

Participants are not permitted to unilaterally expand service scope, increase service targets, or change business scenarios without authorization, ensuring that CIPS remains focused on cross-border payment clearing, maintaining system stability and professionalism.

In summary, the new regulations by the central bank build a clearer and safer fund circulation loop, meticulously regulate participants' rights and responsibilities, promote the normalization and professionalization of CIPS operation management to a higher level, and lay a solid foundation for further expansion of the cross-border use of the Renminbi.

#中国人民银行 #CIPS