FROM: The Shanghai Futures Exchange

TO: All Members, Ceritifed Futures Margin Settlement Banks and Certified Delivery Warehouses

CC: General Office and Futures Supervision Department of  China Securities Regulatory Commission

SUBJECT: Notice on Market Risk Control during the National Day 2015

FILING SERIAL: SQF [2015] No. 135

September 21, 2015

The National Day 2015 is approaching. According to the notice on holiday schedule and market close,  the Exchange’s futures markets will be closed from October 1 through October 7. According to Article 4 and 9 as prscribed in the Risk Management Rules of the Shanghai Futures Exchange, we decide to adjust the trading margin requirements, price limits, transaction fees for each product around the National Day.

I. In the absence of a one-side market on Sep. 29, 2015, the trading margin requirements as from the closing and settlement on that day and the price limits as for the following trading day will be adjusted as follows:

For futures contracts on aluminum, lead and tin, their trading margin requirements rise from 5% to 8%, and their price limits from 4% to 6%;

For futures contracts on zinc, steel rebar, hot-rolled coil and gold, their trading margin requirements rise from 6% to 9%, and their price limits from 5% to 7%;

For futures contracts on nickel, wire rod and bitumen, their trading margin requirements rise from 7% to 10%, and their price limits from 5% to 7%;

For fuel oil contracts, their trading margin requirements rise from 8% to 11%, and their price limits from 5% to 7%;

For futures contracts on copper, silver and natural rubber, their trading margin requirements rise from 8% to 11%, and their price limits from 6% to 8%;

In the event of any discrepancy between the above-mentioned margin requirements and price limits and the ones prescribed in existing rules, the higher one shall prevail.

For 1601 contract on wire rod and fuel oil as well as for newly listed contract, their trading margin requirments still remain as 20%.

II. When the trading resumes on October 8, 2015, the following adjustments will be made to margin requirements for the above-mentioned futures contracts as from the closing and settlement on the first trading day when no price limit occurs, and to their price limits as for the following trading day:

For futures contracts on nickel and bitumen, their trading margin requirements will be adjusted as 8%, and their price limits as 6%;

For futures contracts on copper, aluminum, zinc, lead, tin, steel rebar, wire rod, hot-rolled coil, gold, silver, natural rubber and fuel oil, their trading margin requirements and price limits will return to their original levels.

For other provisions concerning trade margins and price limits, please refer to the Risk Management Rules of the Shanghai Futures Exchange. 

III. All members are required to timely exercise the position limits for related contracts, natural person’s position and integral multiple adjustment, and to preapare for delivery. The last trading day for FU1510 contract is Sep.30, and the delivery date is Otc. 8, 9, 12, 13 and 14. All members shall be fully aware of investor’s intention of delivery, check on the number and valid period of warrants for contract delivery in advnce and do well in issuing and declaration of special VAT invoices, so as to effectively prevent the risks arising from delivery.  

Ⅳ. The transaction fee for intraday close-out of nickel, silver and bitumen futures will resume as from the closing and settlemt on Sep. 22, 2015 

Ⅴ. All certifed futures margin settlement banks are advised to well prepare themselves to ensure normal business operations. All certified delivery warehouses are required to do well in emergency plan and security work, so as not only to prevent the occurrence of safety incidents, but to properly manage the load-in product’s ownership verification and storage. Furthermore, efforts shall also be made to enhance internal management and risk control to ensure the safe and smooth operation of delivery business. In the event of any emergencies, one shall timely contact the Exchange according to relevant regulations. 

Given the long time span of the National Day Holiday, all members shall do well in risk prevention, duly increase margin requirement based on investors’ position and risk level, strengthen the management over withdrawal and deposit of investor’s funds, remind investors of the importance of prudent trading and rational investment, and attach importance to technical system maintenance and IT network safety during the holiday. Certifed futures margin settlement banks and certified delivery warehouses are required to ensure smooth market operation.