Economic Daily: Shanghai Futures Exchange Revised and Perfected the Risk Control Settlement Rules

_____________________________________________________________________

Updated on: June 2, 2016 

Reported by He Chuan, Journalist from Economic Daily

Shanghai Futures Exchange(SHFE) released the revised Shanghai Futures Exchange Risk Control Management Method, Shanghai Futures Exchange Settlement Rules, Shanghai Futures Exchange Arbitrage Management Method today and built trading limit system, perfected the service fee system, warehouse limit management system and big customer report system, etc. The revised enforcement regulation started to implement since the day of release. It is reported that, the revised risk management method has introduced trading limit system and the Exchange, after comprehensively judging the trading situation of market, can implement trading limit system on various types, market contracts, partial or all members, specific clients, the specific standard and execute solution will be published separately by the Exchange. The hedging trade is not applicable to trading limit system. Meanwhile, this method also adjusted the warehouse limit method of futures company members for the futures contract of copper, aluminum, zinc, rebar and wire rod at and before the delivery month, and the current amount warehouse limit is changed to proportion warehouse limit, while the scale value is set as 25%. The revised content is applicable to 1608 contract and the follow-up contract of copper, aluminum, zinc, rebar and wire rode, but the contract 1606 and 1607 are of copper, aluminum, zinc, rebar and wire rode are still carried out according to the original warehouse limit. Besides, this method change the handling way of the five futures types of copper, aluminum, zinc, rebar and wire rode from mandatory liquidation to opening transaction of multiple directions when the members of futures companies reach or exceed the warehouse limit. The adjustment mentioned above is consistent with the other nine varieties. Besides, the settlement rules of this revision perfected the service fee system. The relevant principal of the prior issue showed that, in recent years the Exchange would adopt the adjustment measures of limit up or down and trading margin and will also duly apply service fee adjustment system to deal with the risk of futures market. The practice has proved that the adjustment system of service fee plays active role in aspects of restraining short swing trading and regulating the overheating of market. It is known that the settlement rules after revision is firstly the adjustment system of further confirming the service fee and is secondly the calculation and collection measures of increasing declaration and withdrawal fee, and the Exchange would decide whether to charge the declaration and withdrawal fee according to the market situation.