NOTIFICATION ON MARKET RISK CONTROL DURING THE LABOR DAY 2014

Updated on Apr 22,2014

NOTIFICATION ON MARKET RISK CONTROL DURING THE LABOR 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 Labor Day 2014

FILING SERIAL: SQF [2014] NO. 62

April 22, 2014

The Labor Day 2014 is approaching. According to the market closing announcement issued by the Exchange, the futures market will be closed from May 1 through May 3. According to the Risk Management Rules of the Shanghai Futures Exchange, we decide to make adjustments to the trading margin requirements and price limits for some products around the Labor Day.

I. If there has been no limit-locked market since April 29, 2014, the trading margin requirements as from the closing and settlement on that day and the price limits as from the following trading day are adjusted as follows:

For aluminum contracts, the trading margin requirement rises from 5% to 6%, and the price limit from 4% to 5%;

For zinc and lead contracts, the margin requirement rises from 6% to 7%, and the price limit from 4% to 5%;

For copper, gold and natural rubber contracts, the margin requirement rises from 7% to 8%, and the price limit from 5% to 6%;

For silver contracts, the margin requirement rises from 8% to 9%, and the price limit from 6% to 7%.

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.

Refer to the existing rules for the margin requirements and price limits for steel rebar, hot-rolled coil, bitumen, wire rod and fuel oil contracts.

II. When the trading resumes on May 5, 2014, the margin requirements for the above-mentioned futures contracts as from the closing and settlement on the first trading day when no price limit is reached and their price limits as from the following trading day will return to their original level. Refer to the Risk Management Rules of the Shanghai Futures Exchange for other rules on margin requirement and price limit.

III. All members are required to do well in implementing position limits for the related contracts, natural person’s position and integral multiple adjustment and preparation for delivery on a timely basis. For the FU1405 contract, the last trading day is April 30 and the delivery day from May 5 through May 9. Please fully understand customers’ delivery intent, check the expiry date for the contract delivery warrants in advance and do well in the declaration and issuance of VAT invoice to prevent delivery risk.

All members are required to 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 network safety during the Labor day. Certified settlement banks and certified delivery warehouses are required to focus on safety to ensure smooth market operation.