Notification on Market Risk Control during the National Day 2014

Updated on Sep 23,2014

Notification on Market Risk Control during the National Day 2014

FROM: The Shanghai Futures Exchange

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

SUBJECT: Notification on Market Risk Control during the National Day 2014

FILING SERIAL: SQF [2014] No. 131

September 23, 2014

The National Day 2014 is approaching. According to the notice on holiday schedule and market close, , the Exchange futures markets will be closed from October 1 through October 8. 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 National Day.

I. In the absence of a limit-locked market since September 29, 2014, 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, zinc, lead, steel rebar, hot-rolled coil and bitumen, their trading margin requirements rise from 5% to 9%, and their price limits from 4% to 6%;

For wire rod contracts, their trading margin requirements rise from 7% to 9%, and their price limits from 5% to 6%;

For fuel oil contracts, their trading margin requirements rise from 8% to 9%, and their price limits from 5% to 6%;

For futures contracts on copper, gold and natural rubber, their trading margin requirements rise from 7% to 10%, and their price limits from 5% to 7%;

For silver contracts, 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.

II. When the trading resumes on October 8, 2014, 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 their price limits as for the following trading day:

For zince contracts, their trading margin requirements will be adjusted as 6%, and their price limit as 5%;

For gold contracts, their trading margin requirements will be adjusted as 6%, and their price limit as 5%;

For silver contracts, their trading margin requirements will be adjusted as 7%, and their price limit as 5%;

For futures contracts on copper, aluminum, lead, steel rebar, wire rod, hot-rolled coil, natural rubber and bitumen, their trading margin requirements and price limits will return to their original level.

Please refer to the Risk Management Rules of the Shanghai Futures Exchange for implementation of other provisions concerning trade margins and price limits.

III. All members are required to timely exercise the position limits for related contracts, natural person’s position and integral multiple adjustment.

Ⅳ. All certifed 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 hazadous incidents, but to proper;y 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.

Given the longer time span of the National Holiday and the complicated economic and financial situations both at home and abroad, all members are required to 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 settlementbanks and certified delivery warehouses are required to ensure smooth market operation.