Article 1 These Measures are formulated, in accordance with the Regulation on the Administration of Futures Trading and other relevant laws and regulations, for the purposes of facilitating the opening up of the futures market, strengthening the administration of overseas traders’ and overseas brokers’ engagement in the trading of specified domestic futures products, safeguarding the order of the futures market, protecting the legitimate rights and interests of traders, and promoting the innovative development of the futures market.

　　

Article 2 Overseas traders and overseas brokers shall comply with these Measures when engaging in the trading of specified domestic futures products and relevant business activities.

　　

The term “overseas trader” as used in these Measures shall refer to a legal person or other economic organization duly established outside the jurisdiction of the People’s Republic of China, or a natural person legally possessing foreign citizenship, who engages in futures trading and is liable for the consequences of such trading.

　　

The term “overseas broker” as used in these Measures shall refer to a financial institution duly incorporated outside the jurisdiction of the People’s Republic of China, who is qualified to accept funds and trading orders from traders and conduct futures trading in its own name, and who is approved to do so by the futures regulatory authorities of its host country (or region).

　　

The term “specified domestic futures products” as used in these Measures shall be specified and announced by the China Securities Regulatory Commission (“CSRC”).

　　

Article 3 CSRC and its regional offices shall supervise and administer overseas traders’ and overseas brokers’ engagement in the trading of specified domestic futures products in accordance with applicable laws.

　　

Futures exchanges shall administer (such administration is self-regulated) the trading of specified domestic futures products and relevant business activities pursuant to their self-regulatory rules.

　　

The China Futures Association shall administer (such administration is self-regulated) the trading of specified domestic futures products and relevant business activities pursuant to its self-regulatory rules.

　　

The China Futures Market Monitoring Center Co., Ltd. (“CFMMC”) shall monitor and supervise the trading of specified domestic futures products and relevant business activities pursuant to law.

　　

Article 4 Overseas traders and overseas brokers shall comply with the laws and regulations of the People’s Republic of China and these Measures, and duly perform their obligations in relation to anti-money laundering, anti-terrorism financing and anti-tax evasion.

　　

Article 5 Overseas traders may authorize domestic futures companies (“futures companies”) or overseas brokers to engage in the trading of specified domestic futures products on their behalf.

　　

Upon the approval of a futures exchange, qualified overseas traders may directly trade specified domestic futures products in such futures exchange.

　　

Any overseas trader that directly enters into the trading through the method as stipulated in the preceding paragraph must satisfy the following criteria:

　　

a) its host country (or region) has a well-established legal and regulatory system;

　　

b) it has sound finances, good credit standing and sufficient liquid assets;

　　

c) it has a well-established governance structure, sound internal control system and proper business operations; and

　　

d) any other criteria stipulated by the futures exchanges.

　　

Article 6 Overseas brokers, authorized by overseas traders, may authorize futures companies to conduct the trading of specified domestic futures products on their behalf. Futures companies that accept such authorization shall conduct futures trading for the overseas brokers in their own names.

　　

Upon the approval of a futures exchange, qualified overseas brokers may accept the authorization from overseas traders, and directly trade specified domestic futures products in such futures exchange for the overseas traders in their own names.

　　

Any overseas broker that directly enters into trading through the method stipulated in the preceding paragraph must satisfy the criteria set forth in the third paragraph of Article 5 of these Measures, and the futures regulatory authorities of its host country (or region) must have already concluded a memorandum of understanding on regulation cooperation with CSRC.

　　

Article 7 Overseas brokers shall not accept authorization from any domestic trader, or any entity or individual stipulated in Article 26 of the Regulation on the Administration of Futures Trading, to conduct domestic futures trading on its behalf.

　　

Article 8 The futures exchanges shall prescribe criteria and procedures for obtaining by and termination of the qualification of the overseas traders and overseas brokers that directly trade at the futures exchanges, and specify their rights and obligations.

　　

Article 9 Overseas traders engaging in the trading of specified domestic futures products shall comply with the self-regulatory rules stipulated by futures exchanges, follow the doctrine of “purchase and sell at its will, assume its own risks, take responsibility for its own profits and loss”, and shall be liable for the performance of contracts and any trading consequences.

　　

Article 10 Overseas traders shall open accounts under genuine and legitimate identification, and duly provide foreign citizenship identification or a certificate of good standing of foreign legal persons or other economic organizations. The requirements concerning identification documents of overseas traders shall be prescribed by CFMMC separately.

　　

Article 11 Overseas brokers, authorized by overseas traders to conduct the trading of specified domestic futures products, shall handle account opening procedures for the overseas traders and apply a trading code for each of the overseas traders in compliance with the Provisions on the Administration of Futures Customer Accounts Opening and the business rules of CFMMC, and shall not mix up the codes in the course of futures trading.

　　

Futures companies authorized by overseas brokers shall, in compliance with the business rules of CFMMC, provide necessary assistance to overseas brokers in handling the procedures stipulated in the preceding paragraph.

　　

Overseas traders that directly enter into trading shall apply to futures exchanges for account opening and trading codes. Futures exchanges shall submit relevant materials to CFMMC for record prior to trading.

　　

Article 12 A suitability system shall be implemented for the trading of specified domestic futures products. Futures exchanges, futures companies and overseas brokers shall implement this suitability system. Overseas traders shall comply with this suitability system.

　　

Article 13 Overseas brokers authorized by overseas traders shall present a risk disclosure statement to overseas traders prior to the acceptance of authorization and shall sign written contracts with such overseas traders, and shall not conduct futures trading without the authorization from overseas traders or in contravention of authorization contents, or conceal any important matter or use other improper means to deceive overseas traders into giving trading orders.

 

Article 14 Overseas brokers that directly enter into trading shall establish, improve and strictly implement business management rules and risk management systems, observe information disclosure rules, and ensure the safekeeping of overseas traders’ margin.

　　

Article 15 Futures exchanges that perform the functions of settlement shall, acting in the capacity of a central counterparty, uniformly organize the settlement of trades in specified domestic futures products. Overseas traders and overseas brokers shall, in accordance with rules as stipulated by futures exchanges, authorize futures companies or other organizations with clearing qualifications to conduct settlement, and the rules regarding futures companies and their clients as provided in Articles 29, 34, 35 and 37 of the Regulation on the Administration of Futures Trading shall apply.

　　

The term “central counterparty” as used in the preceding paragraph shall refer to a legal person who, upon the conclusion of a futures transaction, interposes itself between the counterparties to the futures transaction, becoming the buyer to every seller and the seller to every buyer, and who undertakes the settlement on a net basis, to provide centralized performance guarantee of such futures trading.

　　

Article 16 Overseas traders and overseas brokers that directly enter into trading and those who authorize futures companies to conduct the trading of specified domestic futures products, shall open eligible domestic bank accounts and set them as futures settlement accounts.

　　

Article 17 Overseas traders and overseas brokers shall comply with the provisions of margin safekeeping stipulated by CSRC.

　　

Futures companies shall deposit margin collected from overseas traders and overseas brokers who authorize them for settlement into a special margin account of such futures companies. Futures companies shall manage the margin collected from domestic clients and that from overseas clients under separate accounts according to currencies.

　　

Transfers of funds between domestic accounts among futures exchanges, futures companies, overseas traders and overseas brokers as stipulated in Article 16 of these Measures, shall be conducted via dedicated settlement accounts, dedicated margin accounts and futures settlement accounts.

　　

Article 18 Where the position held by overseas traders and overseas brokers reaches the reporting standard set by futures exchanges, such overseas traders and overseas brokers shall report to the futures exchanges. If the relevant overseas traders fail to report to the futures exchanges, the authorized futures companies or overseas brokers shall report to the futures exchanges in their place.

　　

Article 19 Margin shall only be used to secure the performance of futures contracts or option contracts and shall not be misappropriated for other purposes unless required by law.

　　

Where an overseas trader or an overseas broker is subject to takeover, bankruptcy or liquidation, its margins shall be used first to settle its outstanding futures contracts or option contracts at futures exchanges.

　　

Article 20 Where the circumstances stipulated in Article 85 or Article 87 of the Measures for the Administration of Futures Exchanges occur in the futures market, futures exchanges may adopt measures against overseas traders and overseas brokers pursuant to their rules regarding clients and members.

　　

Article 21 Any dispute arising between futures companies and overseas traders or overseas brokers regarding futures business may be submitted to the China Futures Association, futures exchanges or other mediation organizations for mediation.

　　

Article 22 Futures companies shall include in their monthly and annual reports information in relation to the trading of specified domestic futures products which they have conducted upon the authorization of overseas traders and overseas brokers.

　　

The chief risk officer of each futures company shall be responsible for the supervision and examination of its company’s business activities relating to the trading of specified domestic futures products, and shall be responsible for supervising and encouraging compliance with the futures company’s rectification and reporting duties, etc.

　　

Article 23 CSRC and its regional offices may, pursuant to their supervision and administration functions, request futures companies, overseas traders and overseas brokers to provide the following information or written materials, and may conduct necessary inquiries and investigations:

　　

a) the ultimate beneficiary of the accounts and all the sub-accounts of an overseas trader or an overseas broker, including his/her name, nationality, valid ID certificate (number), contact methods and relevant information, sources of funds, etc.;

　　

b) the person who transmits orders regarding the accounts and all the sub-accounts of an overseas trader or an overseas broker, including his/her name, nationality, valid ID certificate (number), contact methods and relevant information, etc.;

　　

c) detailed information regarding the transfer and usage of funds in the accounts and all the sub-accounts of an overseas trader or an overseas broker;

　　

d) detailed information regarding the accounts and all the sub-accounts of an overseas trader or an overseas broker; and

　　

e) other materials as requested by CSRC in accordance with the principle of prudent supervision.

　　

Article 24 Upon the occurrence of any of the following significant events, the relevant futures companies shall report to the regional office of CSRC located in its domicile within 5 working days after becoming aware of such event or in accordance with relevant rules:

　　

a) any overseas trader or overseas broker is subject to violation of law, takeover, bankruptcy or other risk event;

　　

b) any overseas trader or overseas broker is involved in a futures dispute, arbitration or litigation; or

　　

c) any other events that would affect an overseas trader’s or overseas broker’s engagement in the trading of specified domestic futures products.

　　

The report submitted by the futures companies shall include the cause of the incident, current status, possible consequences and the reaction plan or measures and so on.

　　

Article 25 Where a futures company and its practitioners fail to comply with these Measures, supervisory measures shall be adopted in accordance with relevant rules stipulated in the Regulation on the Administration of Futures Trading, such as ordering compliance within a stipulated period, regulatory interviews or ordering the removal of the persons liable for the non-compliance, and the matters will be recorded in the integrity record.

　　

Article 26 Trading and settlement software of overseas traders and overseas brokers that directly enter into trading shall meet the requirements regarding risk management as stipulated by futures exchanges and the provisions of CSRC regarding the supervision of margin safekeeping. Where the software fails to meet these requirements, CSRC may require overseas traders or overseas brokers that directly enter into trading to upgrade or replace such software.

　　

CSRC may require trading software and settlement software providers of overseas traders or overseas brokers that directly enter into trading to provide relevant materials about such software. These providers shall act in a cooperative manner. CSRC shall keep confidential the materials provided by such providers.

　　

Article 27 CSRC and its regional offices may conduct regular or random onsite inspections with respect to overseas traders’ or overseas brokers’ engagement in the trading of specified domestic futures products and relevant business activities pursuant to its regulatory authorities.

　　

Article 28 Where a futures exchange violates any rules in accepting overseas traders or overseas brokers to directly enter into trading, it shall be penalized or disciplined in accordance with Article 65 of the Regulation on the Administration of Futures Trading.

　　

Where a futures exchange allows overseas traders or overseas brokers that directly enter into trading to trade with insufficient margins, it shall be penalized or disciplined in accordance with Article 66 of the Regulation on the Administration of Futures Trading.

　　

Article 29 Overseas brokers that commit any of the acts listed in items 1, 7, 8, 9, 11, 14, 15 and 16 of Paragraph 1 of Article 67 of the Regulation on the Administration of Futures Trading shall be penalized in accordance with paragraph 1 of Article 67 of the Regulation on the Administration of Futures Trading.

　　

Overseas brokers that commit fraudulent acts as listed in paragraph 1 of Article 68 of the Regulation on the Administration of Futures Trading shall be penalized in accordance with paragraph 1 of Article 68 of the Regulation on the Administration of Futures Trading.

　　

Article 30 Where suppliers of trading software and settlement software of overseas traders or overseas brokers that directly enter into trading refuse to cooperate with CSRC or its regional offices in inspections, or fail to provide CSRC or its regional offices with materials about the software, or provide materials containing false information or major omissions, such suppliers shall be penalized in accordance with Article 76 of the Regulation on the Administration of Futures Trading.

　　

Article 31 Where futures exchanges, futures companies, overseas traders or overseas brokers conduct business operations in violation of any laws or are exposed to major risks which seriously jeopardize the order of the futures market and impair the traders’ legitimate interests, administrative penalties shall be imposed, as appropriate, in accordance with the Regulation on the Administration of Futures Trading; in respect of any conduct which constitutes a criminal offence, such matter shall be handed over to judicial authorities and the relevant persons shall be prosecuted for criminal liability according to law.

　　

Article 32 Where overseas traders or overseas brokers violate the Regulation on the Administration of Futures Trading or relevant rules as stipulated by CSRC, CSRC shall have the right to investigate and handle such violation pursuant to law. Where assistance is needed from the futures regulatory authorities in the domicile of such overseas traders or overseas brokers, CSRC may implement cross-border supervisory and administrative cooperation through the cross-border supervision and administration cooperative mechanism provided for in the relevant bilateral or multilateral memorandum of understanding.

　　

Article 33 Where the trading of specified domestic futures products and relevant business activities is conducted in other futures trading facilities as approved by CSRC, these Measures shall apply.

　　

Article 34 Where a legal person or other economic organization established in Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan Region, or a natural person with resident identity of Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan Region, engages in the trading of specified domestic futures products, these Measures shall apply.

　　

Article 35 These Measures shall come into effect as of August 1, 2015.

　　

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