On October 31, the Shanghai Futures Exchange (SHFE) held a video training conference for its members on the “Single-side Larger-amount Margin System” and the “Arbitrage Regulation”. Liu Nengyuan, President and CEO of SHFE, attended and delivered a speech.

In his speech, Liu Nengyuan reviewed the key work of the SHFE and the operation features of the market in this year. First, the SHFE has successfully launched the continuous trading of gold and silver futures. Judging from the operation, the market liquidity of relevant products has been increased, the price continuity has been improved, the enthusiasm of industry customers for hedging has been obviously enhanced, and the market settling efficiency has been further increased. Second, in order to optimize and improve the trading mechanism, the SHFE has, in accordance with the market operation situation, adopted a series of measures, such as the time-optimizing gradient margin system and the launching of new trading orders. It has also accelerated the pace of product innovation and listed the bitumen futures product for trading. With the steady and orderly launching of the above-mentioned work, positive changes have occurred in the market, the trading scale has obviously increased, and the investor structure has been continuously optimized. From January to September of this year, the total turnover of the SHFE is 490 million contracts (single side), up by 93.57% on a year-on-year basis; and its total trading volume is RMB46.29 trillion (single side), up by 37.75% year-on-year. With regard to the participation structure of investors, special units have been active in entering the market, with 368 special units newly entering the market. Besides, nine commercial banks, including the Industrial and Commercial Bank of China and the Agricultural Bank of China, have been approved to participate in silver futures trading.

Liu Nengyuan pointed out that the “Single-side Larger-amount Margin System” and the “Arbitrage Regulation ”, as two major tasks of the SHFE in this year, have been fully prepared and already been released to the public. They will be implemented before the end of this year. The launching of the “Single-side Larger-amount Margin System” was an important innovative measure for the requirement of “Basing on serving the real economy and continuing to expand the market functions” formulated by the SHFE at the beginning of this year, and it aimed at liquidizing remnant capital, better using the incremental capital, increasing the efficiency of capital use, enhancing the quality of market operation, and promoting the display of the futures market’s functions. The launching of the “Arbitrage Regulation” was an important aspect of the requirement of “Propelling innovation-driven development and speeding up transformation of products and services” set up by the SHFE earlier this year, and it aimed at better cultivating and expanding the team of institutional investors and serving the development of the real economy through improving the fundamental institutional construction of the market.

At the conference, relevant departments of the SHFE have introduced “Single-side Larger-amount Margin System”, “Arbitrage Regulation”, and the exemption of abnormal transactions caused by arbitrage. The SHFE particularly reminded all member units to pay close attention to the preparations for technology systems and relevant operational maintenance and to actively participate in the test for their technology systems. If member units encounter any problem during the test, they could submit it to the Technical Department of the SHFE in time.

It is introduced that this video training has opened the curtain of a series of trainings on the “Single-side Larger-amount Margin System” and the “Arbitrage Regulation”. Next, the SHFE will hold several on-site trainings for the above-mentioned business rules.