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Bank of America Merrill Lynch Launches U.S. Dollar Cross-border Cash Pooling in China

7 January 2015

Bank of America Merrill Lynch Launches U.S. Dollar Cross-border Cash Pooling in China
ZF TRW Automotive Serves as Pilot Client for New Solution

3SHANGHAI – Bank of America Merrill Lynch Global Transaction Services (GTS) has today announced the launch of automated U.S. dollar cross-border cash pooling services for corporations operating in the Shanghai Free Trade Zone. ZF TRW, a division of ZF Friedrichshafen, manufacturers of automobile safety systems, has implemented the working capital solution and is serving as the pilot client for this innovative service.

The BofA Merrill solution allows companies to take advantage of the cross-border pooling scheme policy liberalization announced by The State Administration of Foreign Exchange, which allows for the wider cross-border utilization of funds sourced both on and offshore, and an increased quota for net inflows.

U.S. dollar cross-border cash pooling can assist companies operating in China by better addressing working capital requirements with on and offshore surplus funds. Specifically, the solution allows for U.S. dollar payments and collections centralization, and netting arrangements. It also allows corporate entities in China to operate more in line with their global enterprise cash management practices by reducing cross-border payment fees, building efficiencies in cross-border settlement, and standardizing processing flows.

“China continues to deregulate its treasury management framework,” said Ivo Distelbrink, head of GTS, Asia Pacific at BofA Merrill. “This solution provides opportunities for those operating there to adopt more efficient and effective treasury management practices.”

The U.S. dollar cross-border cash pooling solution is supported by BofA Merrill’s Global Liquidity Platform, which allows corporates in China to leverage automated balance-sweeping capabilities, supports lending and borrowing quotas, and enables regulatory reporting across multiple jurisdictions.

“The launch of U.S. dollar cross-border cash pooling is a key milestone for ZF TRW in integrating our China cash management function into our global structure, greatly helping us optimize working capital management, control FX exposures and improve funding efficiency,” said Jane Hua, Asia Pacific treasurer for ZF TRW. “Bank of America Merrill Lynch provided the advice, the solutions and the expertise to give us the confidence to take advantage of an evolving treasury management market in China.”

Over recent years, BofA Merrill has further enhanced its GTS technology and product capabilities to serve China-based multinational companies. In 2014, the company launched U.S. dollar and RMB cross-border cash pooling facilities to help companies integrate the cash generated onshore into their global liquidity structures. The paperless cross-border payment solution helps clients improve payment efficiency and helps to centralize payments.

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