Dec. 7 (Bloomberg) -- The Shanghai Futures Exchange will widen trading bands and link margin requirements with daily price-movement limits as the European debt crisis and weak global growth causes increased volatility.

The daily trading limits for all contracts will be increased 3 percentage points for the day following a limit move, the bourse said in an e-mailed statement today. That will increase by 5 percentage points from the original level on the third day if the price again moves by the daily limit, it said.

Volatility of the most-active copper contract on the exchange is near the highest level since June 2009, as investors weigh the impact of the deepening European debt crisis and slowing ecomomic growth on raw material demand. Volume for all contracts on the exchange has tumbled 52 percent in the first eleven months, according to the China Futures Association, as regulators tightened limits on speculation.

“The contagion of the European debt crisis and sluggish global economic growth have led to higher volatility and risks in global financial markets,” the exchange said. The new rules will help mitigate those risks, it said.

Margin requirements will be increased by 2 percentage points more than the trading band of the following day, according to the regulations, which become effective Dec. 19.

The exchange used the copper contract as an example, saying if the price moved by the current 6 percent limit, the following day the trading band will increase to 9 percent. A limit move the next day would mean the band rises to 11 percent, it said.

The margin would be increased to 13 percent for both days, it said.

“The new rules will help to control market risks when overseas markets witness extreme volatility,” said Lin Hui, head of research department at Orient Futures Co. In extreme cases, such as the days after the week-long National Day holidays in 2008, a larger trading band would help to avoid forced liquidation, she said.

The Shanghai bourse also trades aluminum, zinc, lead, gold, fuel oil and steel futures.