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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II ESTABLISHMENT, ALTERATION AND TERMINATION CHAPTER III ORGANIZATIONAL STRUCTURES CHAPTER IV MANAGEMENT OF THE MEMBERS CHAPTER V BASIC BUSINESS RULES CHAPTER VI SUPERVISION AND ADMINISTRATION CHAPTER VII SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. In order to strengthen the administration of futures exchanges, define the powers and responsibilities of futures exchanges and maintain the normal order of the futures market, these Measures are formulated in accordance with the Interim Regulations for the Administration of Futures Trading. Article 2. The futures exchanges established within the People's Republic of China shall be governed by these Measures. Article 3. A futures exchange shall refer to the legal person which is established in accordance with the conditions provided in the Interim Regulations for the Administration of Futures Trading and the present Measures, performs its functions provided in the Interim Regulations for the Administration of Futures Trading and the present Measures, and exercises self-regulation according to its articles of association. Registered capital of a futures exchange shall be divided into equal share, which shall be subscribed and paid by its members. Article 4. China Securities Regulatory Commission (hereinafter referred to the CSRC) shall supervise and administer the futures exchanges in a concentrated and unified way. CHAPTER II ESTABLISHMENT, ALTERATION AND TERMINATION Article 5. The establishment of a futures exchange shall be subject to the examination and approval of the CSRC. No entity or individual may, without approval, establish any futures exchange or do so in a disguised form. Article 6. To apply for establishing a futures exchange, one shall submit the following documents and materials to the CSRC: (1) Application Form; (2) Drafts of the articles of association and the trading rules; (3) Business plan of the futures exchange; (4) Name of the members to join in this futures exchange; (5) Name and resume of the candidates for member directors; (6) Name and resume of the senior managerial personnel to be employed; (7) Certifications of and explanations on the place, equipment and fund; and (8) Other documents and materials required by the CSRC. Article 7. A futures exchange established upon the approval of the CSRC shall indicate the words of "commodity exchange" or "futures exchange". No other entity or individual may use the "commodity exchange", "futures exchange" or other similar names. Article 8. Apart from the functions provided for in the Interim Regulations on the Administration of Futures Trading, a futures exchange shall perform the following functions: (1) Formulating and implementing the business rules of the futures exchange; (2) Promulgating market information; (3) Regulating the futures business of the members, and investigating and punishing the rule-breaking acts of the members; (4) Regulating the futures business of the designated delivery warehouses; and (5) Supervising the futures settlement related to this futures exchange conducted by the settlement bank. Article 9. The articles of association of a futures exchange shall indicate the following matters: (1) Purpose of establishment and the functions; (2) Name, domicile and business place; (3) Registered capital and the composition thereof; (4) Business duration; (5) Membership and the management measures thereof; (6) Rights and obligations of the members; (7) Disciplinary sanctions against the members; (8) Composition, powers, office term and rules of procedure of the members' congress, the council and other organizational structures; (9) Producing, appointing and removing of the managerial personnel and the duties of them; (10) Basic business rules; (11) Management system for the risk reserve funds; (12) Accounting and internal auditing system; (13) Conditions and procedures for alteration and termination, and the measures for liquidation; (14) Procedures for modification of the articles of association; and (15) Other matters that need to be provided for in the articles of association. Article 10. The trading rules of a futures exchange shall indicate the following matters: (1) Futures trading, delivery and settlement system; (2) Rules for brokering and proprietary trading; (3) Risk control system and the procedures for treatment of abnormal situations in trading; (4) System of management and use of security deposit; (5) Rules for the making, circulation, management and written-off, of standard warehouse receipts; (6) Measures for the promulgation of futures trading information; (7) Violations of the rules or contracts and the treatment measures thereof; (8) Ways of settlement of trading disputes; and (9) Other matters that need to be indicated in the trading rules. Article 11. The merging, splitting or network trading of futures exchanges shall be subject to the examination and approval by the CSRC. A futures exchange may be established through either consolidation or splitting, and the creditor's rights and debts of the parties before the merging shall be carried forward by the futures exchange that remains or newly established after the merging. Where a futures exchange is split, its creditor's rights and debts shall be carried forward by the futures exchanges after splitting. Article 12. Where a futures exchange is in the situation provided for in Article 17 of the Interim Regulations on the Administration of Futures Trading or has any of the following alterations, it shall report to the CSRC for approval: (1) Alteration of the name; (2) Alteration of the domicile or business place. Article 13. A futures exchange may not establish any branch or any other futures exchange place without the approval by the CSRC. Article 14. Where a futures exchange is terminated because of the situation provided for in Article 20 of the Interim Regulations on the Administration of Futures Trading or because of merging or splitting, the CSRC shall make a public announcement about the termination. Where a futures exchange is terminated, a liquidation group shall be formed to carry out the liquidation. The liquidation scheme formulated by the group shall be submitted to the CSRC for approval. CHAPTER III ORGANIZATIONAL STRUCTURES Article 15. A futures exchange shall set up a members' congress and a council. Article 16. The members' congress is the body of power of the futures exchange, and shall be composed of all the members. The members' congress exercises the following powers: (1) Reviewing and adopting the articles of association and the trading rules of the futures exchange as well as the drafts of modification thereof; (2) Electing and replacing member directors; (3) Reviewing and approving the work reports of the council and the general manger; (4) Reviewing and approving the financial budget plan and the final accounts report of the futures exchange; (5) Reviewing the use of risk reserve funds of the futures exchange; (6) Deciding on the increase or reduction of registered capital of the futures exchange; (7) Deciding on the merging, splitting, dissolving and liquidation of the futures exchange; (8) Deciding on other major matters presented by the council of the futures exchange; and (9) Other powers provided for in the articles of association of the futures exchange. Article 17. The members' congress shall, as a general rule, be convened by the council once a year. A temporary members' congress shall be convened under any of the following circumstances: (1) The number of the member directors is less than two thirds of the number provided for in the articles of association of the futures exchange; (2) More than one third of the members jointly propose a temporary meeting; or (3) If the council deems necessary. Article 18. The members' congress shall be presided over by the president of the council. If the president can't perform his duties under special circumstances, the vice president or other directors designated by the president shall preside over the meeting. For a members' congress, the matters to be reviewed in the meeting shall be notified to the members 10 days before the meeting is convened. A temporary members' congress may not make any resolution on the matters not listed in the notification. Article 19. A members' congress is effective only if more than two thirds of the members are present. The members' congress shall make the minutes of meeting on the voted matters, and the directors present at the meeting shall sign the minutes. Within 10 days after the end of a members' congress, futures exchange shall report all files relevant to the members' congress to the China Securities Regulatory Commission for record. Article 20. The council is a permanent body of the members' congress, and is responsible to the members' congress. The council shall exercise the following powers: (1) Convening the members' congress and reporting its work to the members' congress; (2) Electing the president and vice president of the council; (3) Adopting the no-confidence motion against the council members, and submitting the motion to the relevant body for review and approval; (4) Working out the articles of association and the trading rules of the futures exchange and the drafts of modification thereof, and submit such documents to the members' congress for approval; (5) Reviewing the financial budget plan and the final accounts report presented by the general manager, and submit such documents to the members' congress for approval; (6) Reviewing the plans on the merging, splitting, dissolving and liquidation of the futures exchange, and submit such plans to the members' congress for approval; (7) Deciding on the establishment of special committees; (8) Deciding on the admission of members; (9) Deciding on the punishment against the rule-violating members; (10) Deciding on the alterations of the futures exchange; (11) Reviewing and approving the detailed rules and measures formulated in accordance with the trading rules; (12) Reviewing and approving the measures for the use and management of the risk reserve; (13) Reviewing and approving the development program and annual work plan of the futures exchange presented by the general manager; (14) Supervising the general manger who takes charge of the implementation of the resolutions of the members' congress and the council; (15) Supervising the senior managerial personnel and other staff members of the futures exchange in complying with the relevant laws, regulations, rules, policies of the state and the articles of association and business rules of the futures exchange; (16) Organizing the auditing of the annual financial statements of the futures exchange and deciding on the retaining and changing of the accounting firms; and (17) Other powers provided for by the articles of association and endowed by the members' congress. The council may endow the relevant powers provided for in the preceding paragraph to the special committees or the general manager. Article 21. The council shall be composed of member directors and non-member directors; among whom, the member directors shall be elected by the members' congress, and the non-member directors shall be delegated by the CSRC. Article 22. The council shall have one president, and one or two vice presidents. The president and vice president(s) of the council shall be nominated by the CSRC and be elected by the council. The president may not be the general manager concurrently. Article 23. The president of the council shall exercise the following powers: (1) Presiding over the members' congress, the council meeting, and handles the daily work of the council; (2) Coordinating the work of the special committees; and (3) Inspecting the implementation of the resolutions of the council and reporting to the council. The vice president(s) shall assist the president in work, and if the president can't perform his duties temporarily under special circumstances, the vice president or director designated by the president shall perform the duties for the president. Article 24. The council meeting shall be convened at least once half a year. Each meeting shall be notified to all the directors 10 days before the meeting is convened. A temporary council meeting shall be convened under any of the following circumstances: (1) CSRC proposes to convene the temporary meeting; (2) More than one third of the directors proposes to convene the temporary meeting; or (3) Other circumstances provided for in the articles of association of the futures exchange. When convening a temporary meeting, the council may set forth other form and time limit of the notification. Article 25. A council meeting is effective only if more than two thirds of the directors are present, and the voting of resolutions shall be conducted by more than half of the directors. Within 10 days after a council meeting finishes, the council shall submit the resolutions of the meeting and other meeting documents to the CSRC for record. Article 26. The directors shall attend the council meeting in person. If a director can't attend the meeting under special circumstances, he shall entrust, by written form, other directors to attend the meeting on his behalf. And the scope of authorization shall be indicated in the trust deed. A director may only accept the authorization of one director. The council shall take minutes of the meeting on the voted matters, which shall be signed by the directors present at the meeting and by the recorder. Article 27. The council may, according to the needs, set up special committees of supervision, trading, delivery, examination of membership, mediation, finance, and technology, of which the duties shall be determined by the council and which shall be responsible to the council. Article 28. A futures exchange shall have one general manager and several vice general managers. The general manager and vice general managers shall be appointed and removed by the CSRC. The office term of the general manger is 3 years, and no more than two successive terms shall be allowed. The general manager is the legal representative of the futures exchange, and is an ex officio director. Article 29. The general manager exercises the following powers: (1) Organizing the implementation of the rules and resolutions adopted by the members' congress and the council meeting; (2) Handling the daily work of the futures exchange; (3) Working out the detailed rules and measures according to the articles of association and the trading rules; (4) Working out the development program and annual work plan of the futures exchange and implementing such program and plan that have been approved; (5) Working out the financial budget plan and final accounts report of the futures exchange; (6) Working out the plan on the merging, splitting, dissolving and liquidation of the futures exchange; (7) Working out the plan on the alterations provided for in Article 12 of these Measures; (8) Deciding on the plan of setup of organizational structures of the futures exchange, and on the employing and dismissing of staff members; (9) Deciding on the salary, award and punishment of the employees of the futures exchange; and (10) Other powers provided for by the articles of association of the futures exchange or endowed by the council. If the general manger can't perform his duties temporarily under special circumstances, the vice general manger designated by the general manager shall perform the duties on his behalf. Article 30. The appointment and removal of the middle-level managerial personnel of a futures exchange shall be submitted to the CSRC for record. CHAPTER IV MANAGEMENT OF THE MEMBERS Article 31. The members admitted by a futures exchange shall be the business corporations registered within the People's Republic of China with good credit standing. Article 32. The measures for member management of a futures exchange shall include: (1) Conditions and procedures for the acquirement of membership; (2) Conditions and procedures for the alteration of membership; (3) Supervision and management of the members; (4) Treatments of the violations of rules or contracts by the members; and (5) Other matters that need to be provided for in the measures for member management. Article 33. A member shall enjoy the following rights: (1) Participating in the members' congress, exercising the right to elect, the right to be elected and the right to vote; (2) Conducting futures trading in the futures exchange; (3) Using the trading facilities provided by the futures exchange and obtaining the information and services related to futures trading; (4) Assigning the membership pursuant to the provisions; (5) Proposing, jointly with other members, the convening of temporary members' congress; (6) Exercising the right of appeal pursuant to the articles of association and trading rules of the futures exchange; and (7) Other rights provided for in the articles of association of the futures exchange. Article 34. A member shall perform the following obligations: (1) Observing the relevant laws, regulations, rules and policies of the state; (2) Observing the articles of association, business rules and relevant decisions of the futures exchange; (3) Paying various kinds of fees pursuant to the provisions; (4) Executing the resolutions of the members' congress and the council meeting; (5) Being subject to the supervision and management of the futures exchange; and (6) Other obligations provided for by the articles of association of the futures exchange. Article 35. A futures exchange shall formulate the rules of seat management. A member may not give all or part of his seats to any other agency or individual to use through lease or contract. Article 36. A futures exchange shall make selective or overall inspection of the members' compliance with the business rules of the futures exchange, and shall submit the inspection results to the CSRC. When exercising the regulatory powers, a futures exchange may investigate and collect evidences from the members pursuant to the limit of authority and procedures provided for in the articles of association and the trading rules of the futures exchange and in the detailed rules thereof, and the members shall be cooperative. Article 37. A futures exchange may establish special members according to the needs of trading or settlement. The category, qualification, and rights and obligations of the special members shall be provided for in the articles of association of the futures exchange. CHAPTER V BASIC BUSINESS RULES Article 38. A futures exchange shall collect security deposits from the members to guarantee the performance of the contracts. The futures exchange shall open a special settlement account with the designated settlement bank to keep the security deposit, which may not be misappropriated. Article 39. The system of security deposit management of a futures exchange shall include: (1) Proportion of the security deposit collected from the members and the form of collection; (2) Minimum balance of the members' security deposit in the special settlement account; and (3) Measures when the balance of the members' security deposit is less than the minimum balance provided for by the futures exchange. Article 40. A futures exchange shall draw the risk reserve at a rate of 20% of the incoming commissions, and the risk reserve must be accounted for separately and be deposited in a special account. CSRC may decide on the scale of the risk reserve according to the business scale, development plan and potential risks of the futures exchange. Article 41. Futures trading shall apply the system of daily non-debts settlement. Article 42. Futures trading shall apply the system of trading codes of the investors. The futures exchanges and the investors must observe the system of one code for one account, and may not conduct the trading by mixing the codes. Article 43. For futures trading, the system of examination and approval of the hedging position and the system of limited speculative position shall be employed. Where a party which is not the member of a futures exchange or an investor applies for hedging position, he shall submit the business scope, materials of business achievements and contracts of purchase and sale of spot goods, to the futures exchange, which shall examine those materials before determining the hedging position; where an investor applies for hedging position, the members of the futures exchange shall examine the materials submitted by that investor before submitting them to the futures exchange for examination. The futures exchange shall set forth standards of the maximum position limit for the speculative position held by the members and investors in the non-delivery months and that in the delivery months respectively. Article 44. For futures trading the system of major client reporting shall apply. A futures exchange may set forth and adjust the standards of position report according to the market risks. Article 45. If a futures exchange has good reason to believe that a member or investor violates the business rules and the violation is significantly affecting or is going to significantly affect the market, it may take the following measures against that member or investor in order to prevent the consequences of the violation from deteriorating: (1) Restricting the input of security deposit; (2) Restricting the drawing of security deposit; (3) Restricting the opening of a new position; (4) Raising the proportion of security deposit; (5) Closing out the position within specific time limit; (6) Closing out the position forcibly. Where the futures exchange takes the treatment provided for in Item 4), 5), 6) of the preceding paragraph pursuant to the business rules, it shall report to the CSRC in good time. Where the futures exchange takes temporary measures against the member or investor, it shall notify the member or investor in the way provided for in the business rules of the futures exchange, and shall list the grounds for taking such measures. Article 46. Where the futures price has been limited from going up or going down for several successive days, the futures exchange may take the measures, such as adjusting the range of limit up or limit down, raising the proportion of security deposit or reducing the position according to certain principles, to resolve the risks. Article 47. Under any of the following circumstances occurring during the futures trading, the futures exchange may announce the abnormal situation and take emergent measures to resolve the risk: (1) The trading can't go on normally due to the causes not attributed to the futures exchange, particularly force majeure such as earthquake, flood, fire, etc. or computer system failure; (2) The member encounters settlement or delivery crisis which is significantly affecting or is going to significantly affect the market; (3) The risk hasn't been resolved in case of the situation prescribed in Article 46 of these Measures even the corresponding measures have been taken; or (4) Other circumstances provided for in the business rules of the futures exchange. The futures exchange must report to the CSRC before it announces the abnormal situation and decides to take emergent measures. Article 48. Where a futures exchange announces the abnormal situation and decides to suspend the trading, the suspension may not exceed 3 trading days, except an extension of the suspension has been approved by the CSRC. Article 49. A futures exchange shall promulgate the following information through appropriate ways: (1) Real time market information; (2) Ranking of the futures holding volume and trading volume; (3) Number of the standards warehouse receipts and the available warehouse volume; and (4) Other information provided for in the business rules of the futures exchange. Article 50. A futures exchange shall compile weekly statements, monthly statements and annual statements of the trading in its market, and shall promulgate those statements in good time. Article 51. A futures exchange shall keep the materials of futures trading, settlement and delivery for no less than 20 years. CHAPTER VI SUPERVISION AND ADMINISTRATION Article 52. A futures exchange shall formulate the measures for punishment against the acts violating its business rules, and shall submit those measures to the CSRC for approval. A futures exchange shall, within the scope of powers provided for in the measures referred to in the preceding paragraph, investigate and punish the rule-breaking acts related to futures business committed by its members or investors in good time; where the futures exchange goes beyond the scope of powers provided for in the measures referred to in the preceding paragraph, it shall report to the CSRC. Article 53. Where a futures exchange formulates or modifies the detailed rules for implementation of its trading rules, it shall report to the CSRC for record. Article 54. The president of council, general manager or vice general manager(s) of a futures exchange may not assume any post in any other for-profit organization concurrently without the approval of the CSRC. The non-member directors and staff members of a futures exchange may not assume any post concurrently, by whatever form, in any member entity of the futures exchange or any other for-profit entity related to the futures trading. Article 55. The staff members of a futures exchange shall voluntarily observe the relevant laws, regulations, rules and policies, be devoted to their duties, be diligent and responsible, be honest and trustworthy, and have good professional ethics. The staff members of a futures exchange may not seek any benefit from the members of the futures exchange or from the futures investors, neither may they engage in the futures trading directly or indirectly. Article 56. A futures exchange shall perform the following obligations of reporting to the CSRC: (1) Submitting the financial statements audited by the accounting firms with the qualification for securities or futures within 3 months after each year ends; (2) Submitting the quarterly and annual work reports on the business operation and on the implementation of the laws, regulations, rules and policies respectively within 15 days after each quarter ends or within 30 days after each year ends; and (3) Other matters required by the CSRC. Article 57. In case of major matters, a futures exchange shall report to the CSRC in good time. The major matters referred to in the preceding paragraph shall include: (1) Any staff member of the futures exchange is found to have seriously violated the relevant laws, regulations, rules or policies of the state or may to do so; (2) The futures exchange is involved in a litigation that concerns more than 10% of its net assets or has relatively large impact on its business risks; and (3) Other matters provided for by the CSRC. Article 58. Where the CSRC believes that there is any abnormal situation arising in the futures market, it may take the necessary risk measures such as postponing the open of market or suspending the trading. Article 59. If the CSRC deems necessary, it may make presentment to the senior managerial personnel of the futures exchange. Article 60. The CSRC may dispatch supervisors to the futures exchanges. A supervisor shall perform his duties pursuant to the relevant provisions of the CSRC. The futures exchanges shall assist the supervisors in their performance of his duties. Article 61. A futures exchange shall, pursuant to the relevant provisions of the state, pay the futures market regulatory fee to the CSRC in good time. CHAPTER VII SUPPLEMENTARY PROVISIONS Article 62. The business rules used in these Measures shall refer to the trading rules of a futures exchange and the detailed rules for implementation thereof. Article 63. These Measures shall come into force on July 1, 2002, the Measures for the Administration of Futures Exchange promulgated on August 31, 1999 shall be abolished at the same time. |
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