On 26 Sep 2025, the HKMA introduced the Renminbi Business Facility (RBF) to replace the RMB TFLF, implementing phased enhancements including expanded eligible activities (trade finance, capex, and working capital loans), reduced interest rates, simplified tapping processes, and automated collateral management via CMU Triparty Service. Quota applications for Phases 2 and 3 are due by 31 October 2025, with biweekly retrospective reporting required to ensure funds are used for eligible RMB financing purposes.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Introduction
On 26 Sep 2025, the Hong Kong Monetary Authority (HKMA) announced the introduction of the Renminbi Business Facility (RBF) to replace the existing RMB Trade Financing Liquidity Facility (RMB TFLF), with enhanced terms and expanded scope for authorized institutions (AIs) to further develop RMB business and strengthen Hong Kong's position as the global offshore RMB hub.
Phased Implementation and Key Enhancements
The RBF will be implemented in three phases. Phase 1, effective 9 October 2025, reduces the facility interest rate to the Shanghai Interbank Offered Rate (SIBOR) of the corresponding tenor (removing the existing 25 basis point spread), extends eligibility to intragroup funding activities, streamlines tapping with a minimum RMB10 million per transaction, and introduces a 1-year tenor option. Phase 2, effective 1 December 2025, broadens eligible activities to include RMB capital expenditure (capex) and working capital term loans for corporate customers and overseas intragroup entities, subject to specific reporting and purpose requirements. Phase 3, effective 2 February 2026, migrates collateral management for repo transactions to the CMU Triparty Repo Service, enabling automated collateral substitution, refining haircuts (2% per year of remaining maturity, capped at 20%), and requiring operational readiness by 31 January 2026.
Quota Allocation and Eligibility
A quota will be assigned to AIs participating in Phases 2 and 3, with applications due by 31 October 2025. Quota allocation considers existing RMB business activities, historical usage under the RMB TFLF, projected business pipelines, and governance controls to ensure funds are used for eligible purposes. The assigned quota for the RMB TFLF (Phase 1) will be superseded by the Phase 2/3 quota. AIs must designate two senior executives for oversight and maintain controls to monitor facility usage, with deviations potentially triggering quota reductions or remedial actions.
Operational Requirements and Reporting
Participating AIs may tap the RBF within their assigned quota for eligible RMB financing activities, with reporting requirements including biweekly retrospective submissions (on the 15th and last day of each month) detailing outstanding tapped funds, breakdown of in-scope activities (trade finance, capex, working capital), and intragroup funding details. Phase 3 mandates use of the CMU Triparty Repo Service for repo transactions, with daily mark-to-market margin maintenance between 99.5% and 100.5% of the repurchase price. Cross-currency swap transactions remain manual under Phase 3.
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