Administrative Regulations on Futures Trading (Revised in 2016)
Administrative Regulations on Futures Trading (Revised in 2016)
Administrative Regulations on Futures Trading (Revised in 2016)
Order of the State Council of the People's Republic of China No.666
February 6, 2016
(Adopted at the executive meeting of the State Council on February 7, 2007; promulgated by the Order of the State Council No.489 on March 6, 2007; revised for the first time in accordance with the Decision of the State Council on Revising the Administrative Regulations on Futures Trading by the Order of the State Council No.627 on October 24, 2012; revised for the second time according to the Decision of the State Council on Abolishing and Revising Some Administrative Laws and Regulations on July 18, 2013 by the Order of the State Council No.638; and revised for the third time in accordance with the Decision of the State Council on Revising Certain Administrative Regulations by the Order of the State Council No.666 on February 6, 2016)
Chapter I General Provisions
Article 1 These Regulations are formulated for the purposes of regulating futures trading, strengthening the supervision over and administration of futures trading, maintaining the order of futures market, preventing risks, protecting the lawful rights and interests of all futures trading parties involved and public interests and promoting positive and steady development of the futures market.
Article 2 Any entity or individual that engages in futures trading or related activities shall abide by these Regulations.
For the purposes of the Regulations, the term of futures trading shall refer to the trading that is conducted by means of public centralized trading or in any other manner as may be approved by the futures regulatory authority under the State Council, and takes futures contract or option contract as the subject matter of trading.
For the purposes of the Regulations, the term of futures contract shall refer to a standardized contract that is formulated in a uniform manner by the futures exchange for delivering a specific amount of subject matter on a stipulated future date at a specified location. A futures contract includes commodity futures contract, financial futures contract and other futures contracts.
For the purposes of the Regulations, the term of option contract shall refer to a standardized contract that is formulated in a uniform manner by the futures exchange and specifies that the buyer is entitled to buy or sell the specified subject matter (including the futures contract) at a specific price on a stipulated future date.
Article 3 To conduct futures trading, one shall follow the principles of openness, fairness, justice, and good faith. Illegalities, such as fraud, insider trading, and manipulation of futures trading prices, shall be forbidden.
Article 4 The futures trading shall be conducted in the futures exchange specified by Paragraph 1 of Article 6 hereof or any other futures exchange as may be approved by the State Council or the futures regulatory authority under the State Council.
No futures trading may be conducted at any location outside the futures exchange specified in the preceding paragraph.
Article 5 The futures regulatory authority under the State Council shall carry out centralized and unified supervision over and administration of the futures market.
The dispatched offices of the futures regulatory authority under the State Council shall perform their duties of supervision and administration according to relevant provisions hereof and the authorization of the futures regulatory authority under the State Council.
Chapter II Futures Exchanges
Article 6 The establishment of a futures exchange shall be subject to the examination and approval of the futures regulatory authority under the State Council.
Without the approval of the State Council or the futures regulatory authority under the State Council, no entity or individual may establish any futures exchange or conduct any futures trading or any other related activities.
Article 7 A futures exchange shall not run for profit-making purposes and shall carry out self-discipline administration according to its own bylaws. A futures exchange shall assume civil liabilities with all its property. The person in charge of a futures exchange shall be appointed and removed by the futures regulatory authority under the State Council.
The administrative measures for a futures exchange shall be formulated by the futures regulatory authority under the State Council.
Article 8 A member of a futures exchange shall be the enterprise legal person or any other economic organization registered in the territory of the People's Republic of China.
A futures exchange may implement the member grading clearing system. The members of the futures exchange that implements the member grading clearing system are composed of clearing members and non-clearing members.
Article 9 A person who is any one specified by Article 147 of the Company Law of the People's Republic of China or any one stated below shall not hold the post of the person in charge of or an accountant of any futures exchange:
1. The person who was in charge of a futures exchange, securities exchange, or securities registration and clearing institution, was a director, supervisor, or senior executive of a futures company or securities company, or was any other person specified by the futures regulatory authority under the State Council, having been removed from that office for less than five years for unlawful act or disciplinary offence; or
2. A lawyer, certified public accountant, or professional of an(a) investment consulting organization, financial consultant organization, assets evaluation organization, or verification organization, whose qualifications for lawyer, certified public accountant, or professional have been suspended for less than five years for unlawful act or disciplinary offence.
Article 10 A futures exchange shall formulate and perfect all rules according to these Regulations and the provisions of the futures regulatory authority under the State Council, and intensify the control of trading risks and the supervision over and administration of members and its staffs. A futures exchange shall perform the following duties:
1. Providing futures trading floor, facilities and services;
2. Designing futures contracts and arranging the listing of such contracts;
3. Organizing and supervising futures trading, clearing and delivery;
4. Providing centralized performance guarantee for the futures trading;
5. Supervising and managing the members according to the bylaws and trading rules; and
6. Other duties stipulated by the futures regulatory authority under the State Council.
A futures exchange shall not participate in any futures trading directly or indirectly. Without the verification of the futures regulatory authority under the State Council and approval of State Council, a futures exchange shall not conduct any businesses, such as trust investment, stock investment, and investment in real property that is not for self use, which are unrelated to its duties.
Article 11 A futures exchange shall establish and improve the following risk management systems according to relevant provisions of the state:
1. A security deposit system;
2. A daily debt-free clearing system;
3. A limit up and down system;
4. A position limits and large position reporting system;
5. A risk reserve system; and
6. Other risk management systems stipulated by the futures regulatory authority under the State Council.
A futures exchange that implements the member grading clearing system shall formulate and perfect the system of clearing guaranty money.
Article 12 When there are any abnormal conditions on the futures market, a futures exchange may adopt the following emergency measures in accordance with the authority and procedures stipulated in its bylaws, and it shall promptly make a report to the futures regulatory authority under the State Council:
1. To increase the security deposit;
2. To adjust the range of limit up and down system;
3. To limit the maximum positions of members or customers;
4. To temporarily suspend trading; or
5. To adopt other emergency measures.
The abnormal conditions mentioned in the preceding paragraph refer to manipulation of futures trading prices in the course of trading, force majeure, or other circumstances stipulated by the futures regulatory authority under the State Council.
After the abnormal conditions disappear, the futures exchange shall promptly cancel the emergency measures.
Article 13 A futures exchange shall obtain the approval of the futures regulatory authority under the State Council:
1. If it formulates or amends its bylaws or trading rules;
2. If it lists, suspends, cancels or revives a futures trading product;
3. If it handles other matters specified by the futures regulatory authority under the State Council.
To approve the listing of any new futures trading product by a futures exchange, the futures regulatory authority under the State Council shall seek opinions from relevant departments of the State Council.
Chapter IV Basic Rules of Futures Trading
Article 23 Only the members of a futures exchange may conduct futures trading in the futures exchange.
An overseas organization that meets the required conditions may conduct trading of specific futures products and specific measures for managing such trading shall be formulated by the futures regulatory authority under the State Council.
Article 24 To conduct futures trading for a customer, a futures company shall issue a risk statement in advance to the customer and sign a written contract with the customer after the customer confirms the trading. A futures company shall not conduct futures trading without customer entrustment or conduct trading of any product not entrusted by the customer.
A futures company shall not guarantee profitability for a customer or agree with the customer on sharing the profits or the risks.
Article 25 The following entities or individuals shall not engage in futures trading and no futures company may accept their entrustment to conduct futures trading:
1. State organs or public institutions;
2. Staffs of the futures regulatory authority under the State Council, a futures exchange, a depository of futures security deposit, or a futures industry association;
3. Persons prohibited from accessing to the securities or futures market;
4. Entities or individuals that are unable to produce account opening documentation; and
5. Other entities or individuals that are prohibited by the futures regulatory authority under the State Council from conducting futures trading.
Article 26 A customer may give trading instructions in writing, by telephone, via the internet, or in any other manner as may be specified by the futures regulatory authority under the State Council to the futures company. A customer's trading instructions shall be clear and complete.
A futures company shall not deceive a customer into giving trading instructions by concealing major matters or any other improper means.
Article 27 A futures exchange shall publish in time the trading volume, trading price, position, ceiling price, floor price, opening price, and closing price of listed commodities futures contracts and other information on real-time quotations that shall be published, and it shall ensure that such information is true and accurate.
......
Order of the State Council of the People's Republic of China No.666
February 6, 2016
(Adopted at the executive meeting of the State Council on February 7, 2007; promulgated by the Order of the State Council No.489 on March 6, 2007; revised for the first time in accordance with the Decision of the State Council on Revising the Administrative Regulations on Futures Trading by the Order of the State Council No.627 on October 24, 2012; revised for the second time according to the Decision of the State Council on Abolishing and Revising Some Administrative Laws and Regulations on July 18, 2013 by the Order of the State Council No.638; and revised for the third time in accordance with the Decision of the State Council on Revising Certain Administrative Regulations by the Order of the State Council No.666 on February 6, 2016)
Chapter I General Provisions
Article 1 These Regulations are formulated for the purposes of regulating futures trading, strengthening the supervision over and administration of futures trading, maintaining the order of futures market, preventing risks, protecting the lawful rights and interests of all futures trading parties involved and public interests and promoting positive and steady development of the futures market.
Article 2 Any entity or individual that engages in futures trading or related activities shall abide by these Regulations.
For the purposes of the Regulations, the term of futures trading shall refer to the trading that is conducted by means of public centralized trading or in any other manner as may be approved by the futures regulatory authority under the State Council, and takes futures contract or option contract as the subject matter of trading.
For the purposes of the Regulations, the term of futures contract shall refer to a standardized contract that is formulated in a uniform manner by the futures exchange for delivering a specific amount of subject matter on a stipulated future date at a specified location. A futures contract includes commodity futures contract, financial futures contract and other futures contracts.
For the purposes of the Regulations, the term of option contract shall refer to a standardized contract that is formulated in a uniform manner by the futures exchange and specifies that the buyer is entitled to buy or sell the specified subject matter (including the futures contract) at a specific price on a stipulated future date.
Article 3 To conduct futures trading, one shall follow the principles of openness, fairness, justice, and good faith. Illegalities, such as fraud, insider trading, and manipulation of futures trading prices, shall be forbidden.
Article 4 The futures trading shall be conducted in the futures exchange specified by Paragraph 1 of Article 6 hereof or any other futures exchange as may be approved by the State Council or the futures regulatory authority under the State Council.
No futures trading may be conducted at any location outside the futures exchange specified in the preceding paragraph.
Article 5 The futures regulatory authority under the State Council shall carry out centralized and unified supervision over and administration of the futures market.
The dispatched offices of the futures regulatory authority under the State Council shall perform their duties of supervision and administration according to relevant provisions hereof and the authorization of the futures regulatory authority under the State Council.
Chapter II Futures Exchanges
Article 6 The establishment of a futures exchange shall be subject to the examination and approval of the futures regulatory authority under the State Council.
Without the approval of the State Council or the futures regulatory authority under the State Council, no entity or individual may establish any futures exchange or conduct any futures trading or any other related activities.
Article 7 A futures exchange shall not run for profit-making purposes and shall carry out self-discipline administration according to its own bylaws. A futures exchange shall assume civil liabilities with all its property. The person in charge of a futures exchange shall be appointed and removed by the futures regulatory authority under the State Council.
The administrative measures for a futures exchange shall be formulated by the futures regulatory authority under the State Council.
Article 8 A member of a futures exchange shall be the enterprise legal person or any other economic organization registered in the territory of the People's Republic of China.
A futures exchange may implement the member grading clearing system. The members of the futures exchange that implements the member grading clearing system are composed of clearing members and non-clearing members.
Article 9 A person who is any one specified by Article 147 of the Company Law of the People's Republic of China or any one stated below shall not hold the post of the person in charge of or an accountant of any futures exchange:
1. The person who was in charge of a futures exchange, securities exchange, or securities registration and clearing institution, was a director, supervisor, or senior executive of a futures company or securities company, or was any other person specified by the futures regulatory authority under the State Council, having been removed from that office for less than five years for unlawful act or disciplinary offence; or
2. A lawyer, certified public accountant, or professional of an(a) investment consulting organization, financial consultant organization, assets evaluation organization, or verification organization, whose qualifications for lawyer, certified public accountant, or professional have been suspended for less than five years for unlawful act or disciplinary offence.
Article 10 A futures exchange shall formulate and perfect all rules according to these Regulations and the provisions of the futures regulatory authority under the State Council, and intensify the control of trading risks and the supervision over and administration of members and its staffs. A futures exchange shall perform the following duties:
1. Providing futures trading floor, facilities and services;
2. Designing futures contracts and arranging the listing of such contracts;
3. Organizing and supervising futures trading, clearing and delivery;
4. Providing centralized performance guarantee for the futures trading;
5. Supervising and managing the members according to the bylaws and trading rules; and
6. Other duties stipulated by the futures regulatory authority under the State Council.
A futures exchange shall not participate in any futures trading directly or indirectly. Without the verification of the futures regulatory authority under the State Council and approval of State Council, a futures exchange shall not conduct any businesses, such as trust investment, stock investment, and investment in real property that is not for self use, which are unrelated to its duties.
Article 11 A futures exchange shall establish and improve the following risk management systems according to relevant provisions of the state:
1. A security deposit system;
2. A daily debt-free clearing system;
3. A limit up and down system;
4. A position limits and large position reporting system;
5. A risk reserve system; and
6. Other risk management systems stipulated by the futures regulatory authority under the State Council.
A futures exchange that implements the member grading clearing system shall formulate and perfect the system of clearing guaranty money.
Article 12 When there are any abnormal conditions on the futures market, a futures exchange may adopt the following emergency measures in accordance with the authority and procedures stipulated in its bylaws, and it shall promptly make a report to the futures regulatory authority under the State Council:
1. To increase the security deposit;
2. To adjust the range of limit up and down system;
3. To limit the maximum positions of members or customers;
4. To temporarily suspend trading; or
5. To adopt other emergency measures.
The abnormal conditions mentioned in the preceding paragraph refer to manipulation of futures trading prices in the course of trading, force majeure, or other circumstances stipulated by the futures regulatory authority under the State Council.
After the abnormal conditions disappear, the futures exchange shall promptly cancel the emergency measures.
Article 13 A futures exchange shall obtain the approval of the futures regulatory authority under the State Council:
1. If it formulates or amends its bylaws or trading rules;
2. If it lists, suspends, cancels or revives a futures trading product;
3. If it handles other matters specified by the futures regulatory authority under the State Council.
To approve the listing of any new futures trading product by a futures exchange, the futures regulatory authority under the State Council shall seek opinions from relevant departments of the State Council.
Chapter IV Basic Rules of Futures Trading
Article 23 Only the members of a futures exchange may conduct futures trading in the futures exchange.
An overseas organization that meets the required conditions may conduct trading of specific futures products and specific measures for managing such trading shall be formulated by the futures regulatory authority under the State Council.
Article 24 To conduct futures trading for a customer, a futures company shall issue a risk statement in advance to the customer and sign a written contract with the customer after the customer confirms the trading. A futures company shall not conduct futures trading without customer entrustment or conduct trading of any product not entrusted by the customer.
A futures company shall not guarantee profitability for a customer or agree with the customer on sharing the profits or the risks.
Article 25 The following entities or individuals shall not engage in futures trading and no futures company may accept their entrustment to conduct futures trading:
1. State organs or public institutions;
2. Staffs of the futures regulatory authority under the State Council, a futures exchange, a depository of futures security deposit, or a futures industry association;
3. Persons prohibited from accessing to the securities or futures market;
4. Entities or individuals that are unable to produce account opening documentation; and
5. Other entities or individuals that are prohibited by the futures regulatory authority under the State Council from conducting futures trading.
Article 26 A customer may give trading instructions in writing, by telephone, via the internet, or in any other manner as may be specified by the futures regulatory authority under the State Council to the futures company. A customer's trading instructions shall be clear and complete.
A futures company shall not deceive a customer into giving trading instructions by concealing major matters or any other improper means.
Article 27 A futures exchange shall publish in time the trading volume, trading price, position, ceiling price, floor price, opening price, and closing price of listed commodities futures contracts and other information on real-time quotations that shall be published, and it shall ensure that such information is true and accurate.
......