Shanghai Financial News:Cross-member Use of Hedging Position Approved by SHFE

 Date ：March 3, 2017

Contributed by Li Qian, Journalist from Shanghai Financial News

According to the announcement made on March 1st by the Shanghai Futures Exchange (hereinafter referred as “the Exchange”), the Exchange has adjusted the method by which a industry client applies for and uses the hedging position, and approved the cross-member use of heding positions,effective as from March 20th.   

It is introduced that after such adjustment, the hedging positions that a futures firm’s client applied and got approved at one Futures-Firm Member can be used at any Futures Firm at which such client has established an account. According to relevant personnel from the Exchange, after adjustment, there’s no change to procedure for hedging position application by a client, and the hedging position applied and got approved can be shared among all members at which an account has been established. At the same time, the approved hedging positions of a client can be agregated by members, but excluding the default value of hedging positions approaching delivery month. Therefore, the Exchange advises all members to inform relevant clients in a timely manner and be well prepared for such adjustment, as as to ensure smooth market operation.

Some market participants believe that the approval by the Exchange of cross-member use of client’s hedging positions will lead to the decrease in the number of hedging application by a client, the increase in the efficiency of hedging review, and the convenient use by client of its hedging positions.