CFETS Today Launches New Foreign Exchange Trading System to Trade RMB Using Reuters Technology.

SHANGHAI, China -- China Foreign Exchange Trade System (CFETS) and Reuters (NASDAQ: RTRSY)(LSE: RTR) today announced the launch of CFETS' new foreign exchange trading system. With the use of Reuters Electronic Trading technology, CFETS offers a wide range of instruments, including spot rates, outright forwards, swaps and currency pairs.

To support the evolution of the Chinese foreign exchange market, CFETS chose Reuters to develop its new foreign exchange trading system, following an international tender. Today marks the first day of trading for RMB against foreign currencies over the new system, which went live on 12 March for trading other foreign currency pairs.

CFETS member banks will now be able to access and trade in real-time the Yuan and five global currency pair prices. Banks will have a choice of mechanisms to bid or access prices- one click trading, request for quote or limit orders. Initially there are five currency pairs being offered, the Chinese Yuan against the US Dollar, Japanese Yen, Hong Kong Dollar, Euro, and Sterling.

The CFETS portal is based on a version of Reuters Electronic Trading (RET) platform customised for RMB trading. At present, 21 market-makers have completed the development of the API interface and today they started automated and programmed quotation and trading of the RMB on the new system.

Alex Hungate, Managing Director of Reuters Asia, said: "The new CFETS system paves the way for the RMB and foreign currency pair trading and is an important milestone for the development of the inter-bank FX market. Reuters is honoured to have been able to contribute to the growth of China's financial markets in what will be a significant evolution for the trading of the Yuan. This successful partnership with CFETS combines their central role in China's inter-bank market and the global leadership of Reuters in foreign exchange transaction systems."

Xie Duo, President of CFETS, said: "The new foreign exchange trading system combines CFETS's deep understanding of the business processes, management and market of the industry and advanced international system development methods and technology. The new system answers the needs of the development of the Chinese market. CFETS will continue to make significant efforts to build market infrastructure including the trading system, enhance service quality and provide the impetus for the sustainable development of China's inter-bank market."

Founded in 1994 as an intermediary in the inter-bank foreign exchange market in China, CFETS has built infrastructure for China's inter-bank market. Since July 2005, when China started to reform its RMB exchange rate mechanism, new inter-bank foreign exchange instruments and trading patterns have been gradually introduced, along with the market-making system.

Customer comments:

Sun Xiaofan, Global Head of FX, Bank of China, said: "The launch of new foreign exchange trading system is a milestone in the integration of China's foreign exchange market with the global market. The new system provides a sound and highly-efficient platform for the fast and healthy development of the market for RMB and G7 currencies. With the powerful new trading platform, Bank of China will be able to leverage its strengths in foreign exchange trading and grow with the country's foreign exchange market."

Paulus Mok, Managing Director, Citibank China, head of fixed income, currencies and commodities and country treasurer said: "The newly launched CFETS portal, which combines G7 currencies and the Chinese Yuan in one centralized system, will generate significant benefits to all market players in China and have a profound impact on the future development of China's foreign exchange market. Citi is privileged to be a market-maker for both G7 and Yuan currency trading. With our strong global trading capacity and deep commitment to the Chinese market, we are confident that our partnership with CFETS will substantially increase the breadth and depth of the currency market in China."

Wang Wenhua, Deputy General Manger of Treasury and Capital Markets, CITIC Bank, said: "Since China carried out exchange rate reform on July 21, 2005, the foreign exchange market- an important part of China's financial reform- has seen steady development and the exchange rate formation mechanism is being perfected. CFETS has made important contributions to the construction of China's foreign exchange market. The newly-launched electronic trading portal is in line with the international development trends in electronic foreign exchange trading, while reflecting the actual situation of China's foreign exchange market. It represents a brand new phase in the development of China's foreign exchange market. We believe that the move will promote the healthy development of China's foreign exchange market and play a positive role in perfecting the RMB exchange rate formation mechanism. CITIC Bank is greatly honoured to be one of first market-makers for the trading of RMB against G7 currencies. We will continue to support CFETS and contribute our share in the development of China's foreign exchange market."

Tom Roche, Global Head of E-Commerce Rates & FX, Standard Chartered Bank said: "We are delighted to be one of the pioneering partner banks in this initiative. The enhanced functionally of the CFETS FX trading platform will provide greater transparency and more competitive pricing for FX liquidity in China - a core market for Standard Chartered Bank."

Chen Shi Yong, General Manager of Financial Markets Department of Industrial Bank (IB), China said: "We are very pleased to be a market maker of CFETS and to be able to support member banks' ability to trade the Chinese Yuan electronically against major world currency pairs and foreign exchange derivatives. It is a great privilege to help establish the Chinese currency in the global foreign exchange market, on an electronic trading system built by the world's largest information provider, Reuters. The launch of the RMB spot and foreign exchange derivatives market will help provide more transparency and efficiency to the foreign exchange market in China and help build an exchange rate mechanism for the Chinese currency."

Note to Editors:

China Foreign Exchange Trade System (CFETS) is the only organisation licensed to trade foreign exchange in China. Member banks will benefit from a real-time, internet based foreign exchange multi-bank portal with the aim of facilitating the growth of foreign exchange trading in China.

In May 2005, Reuters helped CFETS launch its first multi-bank portal to allow the spot trading of eight foreign currency pairs- the U.S. dollar against the euro, yen, Hong Kong dollar, British pound, Swiss franc, Australian dollar and Canadian dollar, plus the Euro versus the yen.

Reuters has also worked with market makers as part of the launch which supports one of the company's key Core Plus initiatives to build its presence and investment in China.

Today, the financial institutions which have the permission to trade RMB against five major foreign currencies will be able to trade streaming executable FX prices contributed by market-makers on a 'best bid' and 'best offer' basis.

CFETS now has the capability to operate on two trading modules called the anonymous trading model and the bi-lateral trading model. In the first anonymous trading model, CFETS acts as central clearing settlement counterparty for trades. The name of member banks and market-makers remains anonymous to trading counterparties. In the second member banks need to establish credit relationships with each other.

About CFETS:

China Foreign Exchange Trade System (CFETS) officially set up and started operation on April 4, 1994. From then, China's interbank market has grown from small to large and has expanded its business from the mainland to Hong Kong and Macau. Its financial infrastructure improves constantly, and market operational efficiency rises with each passing day. All these historic evolutions and advances have laid a solid foundation for a national unified interbank market.

Over the past ten years, under the direct leadership of the PBOC and the SAFE, with great support from the central and local Chinese governments, and also with the joint efforts of all the market participants, the CFETS has fulfilled the obligations prescribed by the PBOC, under the guideline of using "multiple technological means and trading patterns to meet market demands of various levels" and with respect to market principles, CFETS carries out constant innovations of service content, service means, and market mechanisms, working hard to provide market members with qualified services. By using advanced electronic information technology, the Internet and leased line, CFETS has set up the three service platforms of trading, information and supervision.

About Reuters:

Reuters (www.reuters.com), the global information company, provides indispensable information tailored for professionals in the financial services, media and corporate markets. Through reuters.com and other digital properties, Reuters now also supplies its trusted content direct to individuals. Reuters drives decision making across the globe based on a reputation for speed, accuracy and independence. Reuters has 16,900 staff in 94 countries, including 2,400 editorial staff in 196 bureaux serving 131 countries. In 2006, Reuters revenues were [pounds sterling]2.6 billion.