Announcement on Distribution of the Amendements to the Gold Contract Specifications of the Shanghai Futures Exchange and Risk Management Rules of the Shanghai Futures Exchange

Updated on Apr 02,2015

Announcement on Distribution of the Amendements to the Gold Contract Specifications of the Shanghai Futures Exchange and Risk Management Rules of the Shanghai Futures Exchange

SUBJECT: Announcement on Distribution of the Amendements to the Gold Contract Specifications of the Shanghai Futures Exchange and Risk Management Rules of the Shanghai Futures Exchange

FILING SERIAL: SQGG [2015] No. 6

April 2, 2015

In oder to carry out relevant requirements for developing commodity futures market as raised in the Opinions of the State Council on Further Promoting the Healthy Development of Capital Market and the spirits rasied from national securities and futures regulatory meeting, better meet the market demands, satisfy the actual needs of physical ecomony and investors, and promote futures market’s function, the Exchange hereby makes amendments to the Gold Contract Specifications of the Shanghai Futures Exchange and the Risk Management Rules of the Shanghai Futures Exchange. The amended Gold Contract Specifications of the Shanghai Futures Exchange is approved by the China Securities Regulatory Committee. The amended Risk Management Rules of the Shanghai Futures Exchange is reviewed and adopted at the interim meeting of the 2^nd Board of Directors of the Exchange and reported to the China Securities Regulatory Commission.

In order for the amended contract and existing contract, as well as the corresponding enforcement rules to achieve a smooth transition, the decisions below are made upon our consideration:

1. The amended Gold Contract Specifications of the Shanghai Futures Exchange comes into force as from the listing date of the AU1604 contract.

2. The amended Risk Management Rules of the Shanghai Futures Exchange comes into force as from the market close and settlement on April 7, 2015.

Appendix:

1. The Gold Contract Specifications of the Shanghai Futures Exchange (Amendment)

2. The Risk Management Rules of the Shanghai Futures Exchange (Amendment)

Appendix 1

Gold Contract Specifications

(Amendment)

Product	Gold
Contract Size	1 kilogram/lot
Price Quotation	(RMB) Yuan /gram
Minimum Price Fluctuation	0.05 Yuan/gram
Daily Price Limit	Within 3% up or down of the settlement price of the previous trading day
Contract Series	Monthly contract of the recent 3 consecutive months and consecutive even months contracts within the recent 1113 months
Trading Hours	9:00 am to 11:30 am, 1:30 pm to 3:00 pm (the Beijing Time) and other trading hours as prescribed by the SHFE
Last Trading Day	The 15th day of the spot month (If it is a public holiday, the Last Trading Day shall be the 1st business day after the holiday)
Delivery Period	The 5 consecutive business days after the last trading day
Grade and Quality Specifications	Domestic product: gold bullion with a fineness no lower than 99.95% Foreign product: Standard bullions of the suppliers and refiners of the gold list of LBMA good delivery that are certified by the SHFE for physical delivery. (More details on quality specifications to be found in the Appendix)
Delivery Venue	Certified Delivery Warehouse of the SHFE
Minimum Trade Margin	4% of contract value
Settlement Type	Physical Delivery
Contract Symbol	AU
Exchange	SHFE

Appendix to Gold Futures Contract of Shanghai Futures Exchange

I. Delivery Unit

The trading unit of Gold standard contract is 1 kilogram/lot, delivery unit is standard weight (net weight) 3 kilogram/warrant, and the delivery shall be made in an integral multiple of each warrant.

II. Quality Standards

(1) The gold content of the gold bullions for the physical delivery of this contract shall not be lower than 99.95%.

(2) The chemical composition of domestic gold bullions shall also meet the specifications in the following table:

Other specifications shall comply with the requirements of the GB/T4134-2003 standard.

(3) The delivery gold bullions are 1 kilogram standard gold bullions (with gold content of not less than 99.99%) or 3 kilogram standard gold bullions (with gold content of not less than 99.95%).

(4) For 3 kilogram gold bullions, the allowed weight (net weight) shortage or surplus for each gold bullion shall not exceed ±50 grams; while for 1 kilogram gold bullions, the weight of each gold bullion shall not be less than 1000 grams, counted as 1000 grams for those over 1000 grams.

The scale difference of each gold bullion shall not exceed ±0.1 gram

(5) The gold for each warrant must consist of gold bullions produced by the same producer, of the same grade, with the same trademark, quality grade and block shape.

(6) The gold bullions for each warrant must be of a registered brand approved or recognized by SHFE with the corresponding quality certificate.

III. Producers and Registered Brands Recognized by SHFE

The gold bullions for physical delivery must be of a brand registered with SHFE, or Gold bullion with a fineness no lower than 99.95% and the standard bullions that are of the suppliers and refiners of the gold list of LBMA good delivery and accepted by SHFE for physical delivery against the exchange futures contracts. The specific registered brands and levels of premium & discount shall be separately prescribed and announced by SHFE.

IV. Designated Delivery Warehouses

The designated delivery warehouses shall be designated and separately announced by SHFE.

Note: Contents with double delete-line are deleted and replaced with ones in grey shade and bold font.

Appendix 2

Risk Management Rule of the Shanghai Futures Exchange

(Amendment)

Article5 The Exchange applies different rates of trade margin for a futures contract based on its amount of open interest and the different period of trading from its listing to its last trading day, as provided in the following details, except otherwise specified in this Article 5:

Trade margin for the hot-rolled coil futures contract is not based on its amount of open interest.

i) The Exchange shall set rates of the trade margin based on a contract’s amount of open interest, as demonstrated in the following tables:

Table 1.Trade margin for the copper futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤240,000	5%
240,000<X≤280,000	6.5%
280,000<X≤320,000	8%
X>320,000	10%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 2.Trade margin for the aluminum futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤240,000	5%
240,000<X≤280,000	6.5%
280,000<X≤320,000	8%
X>320,000	10%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 3. Trade margin for the zinc futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤240,000	5%
240,000<X≤280,000	6.5%
280,000<X≤320,000	8%
X>320,000	10%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 4.Trade margin for the lead futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤200,000	5%
200,000<X≤300,000	10%
X>300,000	12%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 5. Trade margin for the nickel contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤240,000	5%
240,000<X≤360,000	8%
X>360,000	10%

Note: the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract.

Table 6. Trade margin for the tin contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤60,000	5%
60,000<X≤90,000	8%
X>90,000	10%

Note: the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract.

Table 7.Trade margin for the steel rebar contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤1,200,000	5%
1,200,000<X≤1,350,000	7%
1,350,000<X≤1,500,000	9%
X>1,500,000	11%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 8.Trade margin for the wire rod futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤450,000	7%
450,000<X≤600,000	8%
600,000<X≤750,000	10%
X>750,000	12%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 9.Trade margin for the gold futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤~~16,000~~36,000	4%
~~16,000<X≤20,000~~	6%
~~20,000~~36,000<X~~24,000~~48,000	8%7%
X>~~24,000~~48,000	10%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 10.Trade margin for the silver futures contract based on the amount of open interest

As of the first trading day of the third month prior to the delivery month, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤300,000	4%
300,000<X≤600,000	7%
X>600,000	10%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 11.Trade margin for the natural rubber futures contract based on the amount of open interest

As of the first trading day of the listing, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤80,000	5%
80,000<X≤120,000	8%
120,000<X≤160,000	10%
X>160,000	12%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 12.Trade margin for the fuel oil futures contract based on the amount of open interest

As of the first trading day of the listing, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤100,000	8%
100,000<X≤150,000	10%
150,000<X≤200,000	12%
X>200,000	15%

Note :the open interest (in lots) is denoted as “X” and that X refers to the gross open interest in lots of all the longs and shorts of a futures contract

Table 13. Trade margin for the bitumen futures contract based on the amount of open interest

As of the first trading day of the listing, when the open interest amounts to	Trade margin based on the notional value of the contract as of that date:
X≤300,000	4%
300,000<X≤500,000	6%
X>500,000	8%

In the process of trading in a futures contract, when its open interest reaches the levels as set forth in Tables 1-13, above, no adjustment is to be made to the trade margin. Nonetheless, at the time of daily clearing, when the futures contract’s open interest reaches the levels as set forth in Tables 1-10, above, the Exchange will, accordingly, adjust and access the trade margin for all the long and short positions in that contract pursuant to the rate specified in Tables 1-10. If the holder of a long or short position becomes insufficient with his margins, he shall deposit funds to meet the margin requirements by the opening of the next trading day.

Note:

1. Contents with double delete-line are deleted and replaced with ones in grey shade and bold font.

2. Other provisions not listed above excluding the one related to enforcement date remain unamended.