Futures Daily: The SHFE Holds 2nd Int’l Settlement Seminar

Updated on Nov 17,2014

By Zhang Fan

Improving and innovating settlement system and technology is the eternal theme of the futures market.

Liu Nengyuan, President and CEO of the SHFE, made the above statement at the 2nd International Settlement Seminar held by the Shanghai Futures Exchange (SHFE).

Liu Nengyuan said that the futures market cannot develop without reform and innovation. Under the ever-changing market reform, how to improve and innovate the settlement system and technology, which aims at enhancing the futures market’s efficiency, ensuring the risks’ controllability and measurability, and fully displaying the price-finding and risk-managing functions to better serve the real economy, is always the eternal theme of the futures market. At present, the CCP (Central Counter Party) Settlement System has already surpassed the level of reducing cost and enhancing efficiency, and a successful settlement system should and is capable of being the final “Iron Rod” that safeguards the security of the financial system.

Liu Nengyuan said that in recent years, the SHFE has kept strengthening the efforts on system innovation and product innovation. In particular, the listing of the Continuous Trading Program, or the Night Trading Session of precious metals and nonferrous metals products, and the successful launching of the Single-way Larger-side Trade Margin Charging System have promoted the further enhancement of the SHFE’s market operation efficiency and strengthened its capacity of serving the real economy. He hoped that all representatives can speak out freely, listen to all opinions in the seminar, and share their own market settlement strategy and management experience. The SHFE will, on the basis of carefully evaluating and summarizing the results of the seminar and in light of the characteristics of China’s futures market, continue to pay attention to and absorb the advanced experience of international market settlement business.

The seminar was themed with CCP settlement and collateral management. During the 2-day seminar, both domestic and overseas experts have conducted in-depth discussions on such topics as the historical evolution and status quo of the central clearing system, the core competitiveness and function display of settlement institutions, the margin management and collateral system of the futures market, and the future settlement mode of China’s futures market.

Huo Ruirong, Executive Vice President of the SHFE, made a keynote speech at the Seminar, which introduced the development situation of the settlement business of China’s futures market in terms of the settlement system and structure, the current settlement business’s characteristics, and the next innovation focus and direction of China’s futures market. Besides, Huo Ruirong said that the future development of China’s futures market must well balance the security, efficiency, and innovation.

In the current futures and derivatives market, the importance of settlement, which is the core mechanism of the market system to control systematic risks, has received increasing attention from the market. Participants generally believed that the current seminar has high professional background and abundant information, which is of great referential value for the future settlement mode of China’s futures market.

Representatives from domestic institutions such as the China Securities Regulatory Commission, China Futures Margin Monitoring Center, futures exchanges, futures companies, and margin deposit banks, and from overseas exchanges and financial institutions, including CME, Taiwan Futures Exchange, Hong Kong Exchanges and Clearing Limited, Nasdaq OMX, LME Clear, Clearstream Bank, TOCOM, ICE, BM&F BOVESPA, and Moscow Exchange, participated in the seminar.