Notice on Market Risk Control during the Spring Festival 2015

Updated on Feb 09,2015

Notice on Market Risk Control during the Spring Festival 2015

FROM: Shanghai Futures Exchange

TO: All Members, Certified Settlement Banks and Certified Delivery Warehouses

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

SUBJECT: Notice on Market Risk Control during the Spring Festival 2015

FILING SERIAL: SQF [2015] No. 30

February 9, 2015

According to the Announcement by the Exchange on Trading Schedule during Spring Festival for Year 2015, the Exchange’s futures markets will be closed from February 18 through February 24. According to the Risk Management Rules of the Shanghai Futures Exchange, we decide to adjust the trading margin requirements and price limits for each product around the Spring Festival.

I. In the absence of a limit-locked market on February 16, 2015, the trading margin requirements as from the market close 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 and lead, their trading margin requirements rise from 5% to 8%, and their price limits from 4% to 6%;

For futures contracts on steel rebar and hot-rolled coil, their trading margin requirements rise from 6% to 9%, and their price limits from 4% to 6%;

For futures contracts on zinc and gold, their trading margin requirements rise from 6% to 9%, and their price limits from 5% to 7%;

For futures contracts on 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 10%, and their price limits from 5% to 7%;

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

For futures contracts on 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 of the Exchange, the higher standard shall prevail.

For the 1601 futures contracts on wire rod and fuel oil and their subsequent new contracts for trading, their trading margin requirements remain as 20%.

II. When the trading resumes on February 25, 2015, the following adjustments will be made to margin requirements for the above-mentioned futures contracts as from the market close and settlement on the first trading day when no price limit occurs, and to their price limits as from the following trading day:

For futures contracts on steel rebar and hot-rolled coil, their trading margin requirements are restored to 6%, and their price limits are adjusted as 5%;

For copper contracts, their trading margin requirements are adjusted as 8% and their price limits as 6%;

For futures contracts on aluminum, zinc, lead, gold, silver, wire rod, bitumen, fuel oil and natural rubber, their trading margin requirements and price limits as from the following trading day are restored to their original level. Please refer to the Risk Management Rules of the Shanghai Futures Exchange for implementation of other provisions concerning trading margins and price limits.

III. All members shall, on a timely basis, carry out the requirements for position limits and adjustment in multiple integrals in regard to the contracts they have open interest in, and be prepared for delivery. All members shall fully understand investors’ intention of delivery, inspect the number and validity period of the warrants for contract delivery in advance and do well in the declaration and issuance of designated VAT invoices to avoid delivery risks.

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. Certified settlement banks and certified delivery warehouses are required to ensure smooth market operation.