SILVER FUTURES RULES OF THE SHANGHAI FUTURES EXCHANGE

CHAPTER 1 GENERAL PROVISIONS

Article 1 These Silver Futures Rules are made in accordance with the General Exchange Rules of the Shanghai Futures Exchange, the SHFE Silver Futures Contract Specifications, and the relevant business rules to regulate business related to silver futures at the Shanghai Futures Exchange (the “Exchange”).

Article 2 These Silver Futures Rules shall be observed by the Exchange, Members, Clients, Delivery Storage Facilities, Designated Inspection Agencies, Futures Margin Depository Institutions, and other participants of the futures market.

CHAPTER 2 TRADING

Article 3 Contract size for silver futures is fifteen (15) kilograms per lot.

Article 4 Price quotation of a silver futures contract is Yuan (RMB)/kilogram.

Article 5 Minimum price fluctuation of a silver futures contract is one (1) Yuan/kilogram.

Article 6 Listed contracts of silver futures cover the most recent twelve (12) months.

Article 7 Trading hours of a silver futures contract are 9:00 a.m. to 11:30 a.m., 1:30 p.m. to 3:00 p.m., and other hours specified by the Exchange.

Article 8 The last trading day of a silver futures contract is the 15th day of the contract month. The last trading day will be postponed accordingly if it is a legal holiday in China, and will be subject to separate adjustment and announcement by the Exchange if it falls in the Spring Festival month or any other month specially designated by the Exchange.

Article 9 Contract symbol of silver futures is AG.

Article 10 For the hedging and arbitrage quotas of a silver futures contract, regular months extend from the day of listing to the last trading day of the second month before the delivery month, while nearby delivery months cover the month before the delivery month and the delivery month.

Article 11 An application for a regular month hedging quota of a silver futures contract shall be submitted by the last trading day of the second month before the delivery month of the contract. Late applications will not be accepted by the Exchange.

An application for a nearby delivery month hedging quota of a silver futures contract shall be submitted between the first trading day of the third month before the delivery month of the contract and the last trading day of the month before the delivery month. Late applications will not be accepted by the Exchange. An application for a nearby delivery month arbitrage quota of a silver futures contract shall be submitted between the first trading day of the second month before the delivery month of the contract and the last trading day of the month before the delivery month. Late applications will not be accepted by the Exchange.

Article 12 Hedging quota of a silver futures contract shall no longer be used in a revolving manner starting from the first trading day of the delivery month.

CHAPTER 3 DELIVERY

Article 13 A silver futures contract may be physically delivered through an Exchange of Futures for Physicals (“EFP”) or a delivery warehouse.

Silver futures adopt duty-paid delivery.

Article 14 Grade and quality specifications are provided in the SHFE Silver Futures Contract Specifications.

Article 15 The deliverable commodity shall be of a registered trademark from a manufacturer registered with the Exchange.

Article 16 Specifications for deliverable commodity

Each deliverable silver ingot shall weigh fifteen (15) kilograms plus or minus one (±1) kilogram or thirty (30) kilograms plus or minus two (±2) kilograms.

Silver ingots underlying each standard warrant shall consist of commodity of the same manufacturer, grade (designation), registered trademark, and shape.

Article 17 Packaging for deliverable commodity

There is no specific packaging requirement for load-in or load-out silver ingots.

Article 18 Required documentation for deliverable commodity

(i) Domestic commodity: the certificate of quality issued by the registered manufacturer.

(ii) Imported commodity: to be separately announced by the Exchange.

Article 19 Tolerance and pound difference: Difference between standard warrant weight and actual delivery weight shall not exceed plus or minus two (±2) kilograms. Pound difference shall not exceed plus or minus one (±1) kilogram.

Article 20 Quantity (weight) inspection of load-in silver ingots

The delivery warehouse will count load-in silver ingots and double-check the weight for each ingot. The weight of each ingot shall be that shown on the certificate of quality issued by the manufacturer if the pound difference is within the prescribed range.

Article 21 Delivery unit of a silver futures contract is thirty (30) kilograms.

Article 22 Delivery period of a silver futures contract is the two (2) consecutive business days immediately following the last trading day of the contract.

Article 23 The benchmark price for delivery settlement of a silver futures contract is its settlement price on the last trading day.

Article 24 Delivery venue: the delivery warehouses of the Exchange, to be separately announced by the Exchange.

Article 25 After the physical delivery is completed, if the buyer has any dispute over the quality or quantity of the commodity (any silver in dispute shall remain in the delivery warehouse), the buyer shall submit a written request to the Exchange for dispute resolution before the 15th day (including that day) of the month following the delivery month (in case that day falls on a public holiday, the date shall be extended to the first business day after the holiday), together with the quality assay report issued by a Designated Inspection Agency. If no submission is received within the prescribed time, the buyer shall be deemed to have no disputes over the commodity, and the Exchange will no longer accept its relevant request for dispute resolution.

Article 26 If standard warrants are used for the EFPs of a silver futures contract and the EFPs are settled via the Exchange, and if a dispute over the quality of the commodities arises, the buyer shall submit a request for dispute resolution within twenty-five (25) days after the payment and the exchange of standard warrants, together with the quality assay report issued by a Designated Inspection Agency.

CHAPTER 4 RISK MANAGEMENT

Article 27 The minimum trading margin for a silver futures contract is 4%.

Article 28 The stage-based trading margin rates for silver futures are as follows:

Stage of Trading	Trading Margin
As of listing	4%
As of the first trading day of the month prior to the delivery month	10%
As of the first trading day of the delivery month	15%
As of the second trading day prior to the last trading day	20%

 

Article 29 The range of price limit for a silver futures contract is within ±3% of its settlement price of the preceding trading day.

Article 30 Percentage-based Position Limit and fixed-amount Position Limit for each silver futures contract at different stages of trading for an FF Member, a non-FF Member and a Client are as follows (in lots):

 

Note: total open interest and the fixed-amount position limit are based on long or short positions; Percentage-based position limit for the FF Member is the baseline limit.

Article 31 For contracts in silver futures, by the close of the last trading day of the month prior to the delivery month, each Member or each Client shall adjust their speculative positions held through the Member, to multiples of two (2) lots and a one-day delay is allowed under special market conditions; in the delivery month, the speculative positions as well as newly opened and closed-out positions shall be held in multiples of two (2) lots.

Article 32 If the Exchange makes a forced position reduction to a silver futures contract, the amount of the unfilled orders subject to the order fill, positions eligible to fill the unfilled orders, and the principles and methods for the order fill of unfilled orders shall be determined as follows:

(i) Amount of the unfilled orders subject to the order fill. The term “amount of unfilled orders subject to the order fill” means the total amount of all the unfilled orders submitted after the close of the base date at the limit price into the central order book by each Client who has incurred losses on net positions in the contract of an average level of no less than six percent (6%) for silver futures contracts, of the settlement price of the base date.

(ii) Positions eligible to fill the unfilled orders. The positions eligible to fill the unfilled orders include the net positions, on which the Client, as calculated using the above formula stipulated in the Risk Management Rules of the Shanghai Futures Exchange, records average gains for speculative purposes or for hedging purposes at no less than six percent (6%).

(iii) Principles for the order fill of unfilled orders. The order fill of unfilled orders shall take place in the order of the following four levels with regard to the amount of gains and whether such positions are speculative or hedging:

Level 1: Unfilled orders shall be filled with the speculative positions eligible to fill the unfilled orders of any Client with average gains on net positions of no less than six percent (6%) of the settlement price on the base date for the contracts in silver futures, or the Speculative Position Gains of Over 6%;

Level 2: Unfilled orders shall be filled with the speculative positions eligible to fill the unfilled orders of any Client with average gains on net positions of no less than three percent (3%) but no more than six percent (6%) of the settlement price on the base date for contracts with respect to silver futures, or the Speculative Position Gains of Over 3%;

Level 3: Unfilled orders shall be filled with the speculative positions eligible to fill the unfilled orders of a Client with average gains on net positions of no more than three percent (3%) of the settlement price on the base date for contracts in silver futures, or the Speculative Position Gains Below 3%; and

Level 4: Unfilled orders shall be filled with the hedging positions eligible to fill the unfilled orders of a Client with average gains on net positions of no less than six percent (6%) of the settlement price on the base date for contracts in silver futures, or the Hedging Position Gains of Over 6%.

(iv) Methods for the order fill of unfilled orders. If the amount of the Speculative Position Gains of Over 6% is greater than or equal to that of the unfilled orders, the unfilled orders shall be filled pro rata to the amount of the Speculative Position Gains of Over 6%. If the amount of the Speculative Position Gains of Over 6% is smaller than that of the unfilled orders, the Speculative Position Gains of Over 6% shall be filled pro rata to the amount of the unfilled orders. The residual unfilled orders, if any, shall be filled with the Speculative Positions Gains of Over 3% in the same manner as the foregoing, and if there are still orders remaining, the outstanding unfilled orders shall be filled to the Speculative Position Gains of Below 3%, and so to the Hedging Position Gains of Over 6%. Unfilled orders which eventually remain after all the order fills described above, if any, shall not be filled at all.

CHAPTER 5 MISCELLANEOUS

Article 33 Matters not covered herein shall be governed by the applicable business rules of the Exchange.

Article 34 Any violations of these Silver Futures Rules will be handled by the Exchange in accordance with the Enforcement Rules of the Shanghai Futures Exchange.

Article 35 The Exchange reserves the right to interpret these Silver Futures Rules.

Article 36 These Silver Futures Rules take effect on October 23, 2024.