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 These General Exchange Rules are made in Chinese. The English version of such rules is for reference only and shall have no legal effect.

 

GENERAL EXCHANGE RULES OF THE SHANGHAI FUTURES EXCHANGE

(Revised)

CHAPTER 1       GENERAL PROVISIONS

Article 1     These General Exchange Rules are made in accordance with the laws, regulations, and administrative rules of the People’s Republic of China (the “PRC”) and the Articles of Association of the Shanghai Futures Exchange to regulate futures trading and protect the legitimate rights and interests of futures market participants and the public interest.

Article 2     The Shanghai Futures Exchange (the “Exchange”) organizes futures trading approved by the China Securities Regulatory Commission (the “CSRC”) in an open, fair, and impartial manner and in good faith.

Article 3     These General Exchange Rules apply to futures trading and other related activities organized by the Exchange.

The Exchange, its Members, Overseas Special Participants, Overseas Intermediaries, Clients, Designated Delivery Warehouses, Designated Depository Banks, other futures market participants, as well as the staff of the foregoing shall observe these General Exchange Rules.

“Overseas Special Participant” refers to an overseas institution that, having met the criteria prescribed by the CSRC and the Exchange, is approved by the Exchange to trade directly on or through the Exchange, including overseas traders and overseas brokers trading directly on or through the Exchange as provided respectively in paragraph 2, Article 5 and paragraph 2, Article 6 of the Interim Measures for the Administration of Overseas Traders’ and Overseas Brokers’ Engagement in the Trading of Specified Domestic Futures Products (the “Interim Measures”).

“Overseas Intermediary” refers to an overseas broker that, instead of trading directly on or through the Exchange, authorizes a Futures-Firm Member or an overseas broker trading directly on or through the Exchange to conduct trading and clearing activities on its behalf.

CHAPTER 2       LISTED PRODUCTS AND CONTRACTS

Article 4     The Exchange lists products with the approval of the CSRC. Listed contracts include futures contracts, options contracts, and other derivatives.

Article 5     “Futures contract” refers to a standardized contract formulated by the Exchange for the delivery of a certain quantity of the underlying asset at a specified time and place in the future.

The main specifications of a futures contract include contract name, product name, contract size, price quotation, minimum price fluctuation, daily price limit, contract month, trading hours, last trading day, delivery period, grade and quality specifications, delivery venue, minimum trading margin, settlement type, contract symbol, listing exchange and others as prescribed by the Exchange.

Article 6     “Options contract” refers to a standardized contract uniformly formulated by the Exchange whereby the buyer has the right to buy or sell an agreed-upon underlying asset (including futures contracts) at a predetermined price at a specified time in the future.

The main specifications of an options contract are contract name, underlying asset, contract type, contract size, price quotation, minimum price fluctuation, daily price limit, contract month, trading hours, last trading day, expiration date, options style, strike price, contract symbol, listing exchange and others as prescribed by the Exchange.

Article 7     Any appendix to a contract is integral to, and has the same legal force as, the contract.

Article 8     A contract is denominated in RMB or other currencies as prescribed by the Exchange.

The Exchange shall determine the listing price of the newly listed contracts.

Article 9     The Exchange may list specified domestic futures products subject to the confirmation and announcement of the CSRC.

Overseas Special Participants, Overseas Intermediaries, and Overseas Clients may only trade specified domestic futures products and engage in futures trading and other related activities as permitted by the CSRC.

Subject to the approval of the Exchange, Overseas Special Participants may trade specified domestic futures products directly at the Exchange. Rules governing such activities shall be separately provided by the Exchange.

CHAPTER 3       MEMBERS AND OVERSEAS SPECIAL PARTICIPANTS

Article 10     Members of the Exchange are classified into Futures-Firm Members (“FF Members”) and Non-Futures Firm Members (“Non-FF Members”).

The Exchange may create and admit Special Members to facilitate trading, clearing, and other services.

Article 11     Overseas Special Participants are classified into Overseas Special Brokerage Participants and Overseas Special Non-Brokerage Participants.

“Overseas Special Brokerage Participant” refers to an overseas broker that trades directly on or through the Exchange as provided in paragraph 2, Article 6 of the Interim Measures. “Overseas Special Non-Brokerage Participant” refers to an overseas trader that trades directly on or through the Exchange as provided in paragraph 2, Article 5 of the Interim Measures.

Article 12     An applicant for the qualification of Member and Overseas Special Participant of the Exchange shall meet the requirements prescribed by applicable laws, regulations, administrative rules, and the Exchange.

Article 13     The acquisition, change, and termination of the qualification of Member and Overseas Special Participant shall be approved by the Exchange, reported to the CSRC, and announced to the market.

Article 14     The Exchange shall formulate management rules to regulate Members and Overseas Special Participants.

The Exchange may impose requirements on the trading operations, risk management, IT system, and other aspects of Members and Overseas Special Participants where it deems necessary. Members and Overseas Special Participants shall meet such requirements on an ongoing basis and ensure that their technical systems are stable and reliable.

CHAPTER 4       TRADING

Article 15     “Futures trading” refers to the trading of futures or options contracts at the Exchange through open, centralized trading or through other means approved by the CSRC.

The Exchange may implement Exchange of Futures for Physical (the “EFP”), a process where a buyer and a seller who hold opposite positions in a futures contract expiring in the same month agree to, subject to the approval of the Exchange, tender a notice of EFP to have their respective positions in such contract closed out by the Exchange at the price prescribed by the Exchange; then at the price agreed upon, the seller transfers to the buyer the warrant of the same quantity and the same or similar type of underlying commodity as the futures contract.

Article 16     A Member or Overseas Special Participant may, based on its business needs, apply to the Exchange for trading seats.

Article 17     The Exchange shall, in accordance with laws, regulations, administrative rules, and applicable provisions, establish an investor eligibility regime, set out the market access requirements and criteria for Clients, supervise and guide FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries to perform their obligations under the investor eligibility regime, and take actions against related violations in accordance with applicable rules.

Article 18     Prior to opening an account for a Client, an FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary shall check the Client’s real name and assess its risk tolerance, prudently admit the Client in accordance with the investor eligibility regime, and adequately disclose the risks of futures trading.

FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries shall open Client accounts in accordance with relevant rules of the CSRC, the China Futures Market Monitoring Center Co., Ltd., and the Exchange.

FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries shall keep Client materials secure and confidential unless their disclosure is legally required for an investigation or inspection.

Article 19     FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries shall provide true materials and information regarding futures trading to Clients, and shall not defraud or mislead them.

FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries shall keep up-to-date with relevant information about Clients, fully assess their risk tolerance, and strengthen management over them.

Clients are entitled to report to the Exchange on any issues in the brokerage service.

Article 20     The Exchange implements a trading code system.

An FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary shall apply for a trading code for each Client, and trading with aggregated or netted multi-Clients’ positions is not allowed.

Special institutional Clients that manage assets under segregated accounts pursuant to the PRC laws, regulations and applicable rules and measures may apply for a trading code with the Exchange for each of the segregated accounts.

Article 21     Clients may place trading orders through written instruction, telephone, the internet, or other means specified by the CSRC.

When a Client places a trading order, the FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary shall verify the funds and position holding of the Client in accordance with relevant rules.

Article 22     Trading orders include limit orders and other orders specified by the Exchange.

Unless otherwise prescribed by the Exchange, a trading order is valid on the day of placement and may be changed or canceled before it is executed; any partially filled and uncancelled order will remain available for auction trading on that day.

Article 23     FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries shall execute trades according to the authorization of Clients. Unless otherwise prescribed by the Exchange, Clients’ orders shall be timely submitted by FF Members, Overseas Special Brokerage Participants, and Overseas Intermediaries to the Exchange for bidding, and shall not be matched or netted off the Exchange. All orders must be matched through the Exchange unless otherwise prescribed by the Exchange.

Article 24     The Exchange’s electronic matching system shall sort bid and ask orders in accordance with the principle of price and time priority. A bid order and an ask order are automatically matched and executed when the former is priced higher than or equal to the latter.

The execution price produced in the Exchange’s electronic matching system is equal to the middle price among the bid price (bp), the ask price (sp), and the previous execution price (cp), as follows:

if bp ≥ sp ≥ cp, the current trading price = sp;

if bp ≥ cp ≥ sp, the current trading price = cp;

if cp ≥ bp ≥ sp, the current trading price = bp.

The method for matching and executing orders shall be otherwise specified by the Exchange if a price limit is hit or any other exceptional event occurs.

Article 25     A trade is concluded once two trading orders are matched and executed, and the Exchange will send an execution report in accordance with applicable rules. The relevant FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary shall timely forward the execution report to the Client.

A trade concluded in accordance with the rules of the Exchange is effective as from its conclusion; both the buyer and the seller shall accept the trading results and perform their respective obligations.

The execution data recorded in the Exchange’s system shall be taken as the final results of the trades executed under the rules of the Exchange.

Article 26     After market close on each trading day, each Member shall obtain its transaction record by the prescribed method and verify the information.

A Member shall raise its objection to the Exchange within the specified time period, failing which shall be deemed as having acknowledged the transaction record.

Article 27     The Exchange implements hedging management and arbitrage management systems.

The ceiling of hedging positions and arbitrage positions shall be approved by the Exchange.

Article 28     The Exchange may establish a market maker system based on its business needs. Rules governing the system shall be separately provided.

Article 29     The Exchange shall retain the materials on futures trading, clearing, delivery, and the exercise and performance of options contracts for no less than twenty (20) years.

Members, Overseas Special Participants, or Overseas Intermediaries, Designated Depository Banks, and other related parties shall properly keep the materials, supporting documents, and account books relating to trading, clearing, delivery, and the exercise and performance of options contracts, as well as Client complaint files and other business records.

Article 30     The Exchange implements a program trading management system. Non-FF Members, Overseas Special Non-Brokerage Participants, and Clients who utilize program trading shall file relevant information as required by the Exchange.

CHAPTER 5       CLEARING

Article 31     “Clearing” refers to the clearing and transfer of funds between parties under the trading results based on the settlement price published by the Exchange.

Article 32     Clearing of futures transactions shall be centrally organized by the Exchange.

Article 33     Members or Overseas Special Participants who engage in futures trading shall pay transaction fees, delivery fees, and other fees to the Exchange in accordance with relevant rules. The fee rates shall be separately set by the Exchange.

Members shall collect taxes and charges that shall be levied on Clients and Overseas Special Non-Brokerage Participants in accordance with the relevant PRC laws.

Article 34     The Exchange implements margin requirements and may adjust the margin rates based on market conditions.

Subject to the approval of the Exchange, foreign currencies, standard warrants, government bonds, and other stable, liquid assets may be posted as margin. Rules regarding such matters as the type, benchmark price, and maximum limit of admissible marketable securities shall be separately specified.

Article 35     Margin collected by the Exchange from Members shall be used for performance guarantee and trading settlement and not for any other purposes.

Margin is classified into clearing deposit and trading margin.

Article 36     In trading an options contract, the buyer shall pay premium to the seller, and the seller shall deposit the margin required by the Exchange.

Article 37     The Exchange, Members, Overseas Special Participants, Overseas Intermediaries, and Clients shall abide by the rules regarding the safekeeping of margin; and shall open bank accounts, deposit margin funds, premiums, and other funds, as well as perform funds transfers for futures trading in accordance with relevant rules.

Article 38     Designated Depository Banks are subject to certification and annual inspection by the Exchange, the rules for which shall be separately formulated by the Exchange.

Article 39     The Exchange implements daily mark-to-market.

After market close on each trading day, the Exchange shall clear the profits and losses, margin, premiums, taxes, transaction fees, and other pertinent fees of each Member. Members shall obtain their settlement data via the Member Service System and verify the information.

Article 40     A Member shall post additional margin if the balance of its clearing deposit falls below the minimum level specified by the Exchange.

The Exchange may, based on market risk conditions, issue margin calls during or at the end of a trading day to Members with higher risks.

A Member in margin shortfall shall meet its margin requirement within the specified time period; failing which, if its balance of clearing deposit is greater than or equal to zero (0) but less than the prescribed minimum, no new positions may be opened; if the balance is less than zero (0), the Exchange is entitled to implement forced position liquidation or take other measures to mitigate risks against the Member.

Article 41     The Exchange implements a risk reserve system.

The Exchange shall collect, manage, and use the risk reserve in accordance with applicable rules.

CHAPTER 6       DELIVERY, EXERCISE AND PERFORMANCE

Article 42     “Delivery” refers to the process of a buyer and a seller settling contracts, which have not been offset upon maturity, by transferring the ownership of the underlying asset of the contract or making cash settlement at the settlement price upon the maturity of the contract in accordance with the rules of the Exchange.

“Exercise” refers to the action where the buyer of an options contract closes out its positions in the contract by exercising its rights in accordance with relevant rules to buy or sell the underlying futures contract at the strike price.

“Performance” refers to the action where, upon the buyer of an options contract exercising its rights, the seller of the contract performs its obligation to buy or sell a certain quantity of the underlying assets at the strike price agreed in the contract.

Article 43     Delivery of futures contracts and exercise and performance of options contracts shall be organized by the Exchange.

Article 44     Positions in a futures contract that remains open after the contract’s last trading day shall be settled by delivery.

Delivery against an expired contract shall be conducted in the name of the Member. Unless otherwise prescribed by the Exchange, a Client shall perform delivery through its carrying Member.

Article 45     A futures contract shall be settled by physical delivery or other methods as specified in the contract. The settlement type and procedures shall be separately prescribed by the Exchange.

Article 46     Unless otherwise prescribed by the Exchange, as for physical delivery, the Exchange will assign standard warrants to buyers’ carrying Members in accordance with the principle of “time priority, rounding quantity to the nearest whole number, nearest matching, and overall arrangement”.

Article 47     Any Member performing physical delivery shall transfer commodity payments or submit delivery documents to the Exchange during the time period specified by the Exchange.

During the physical delivery of a futures contract, payment for any allowable quantity tolerance set forth in the contract shall be calculated by the method prescribed by the Exchange.

Article 48     The Exchange shall specify the standard and substitute deliverables in a futures contract and shall separately set the standard of premium and discount of such substitutions.

The standard of premiums and discounts for delivery at benchmark and non-benchmark delivery warehouses shall be separately prescribed by the Exchange.

Article 49     If a buyer’s carrying Member has any objection against a standard warrant it has received during a physical delivery, it shall promptly visit the Designated Delivery Warehouse to complete the inspection of the underlying commodity specified in the standard warrant.

Article 50     A delivery default shall have occurred during physical delivery if the seller’s carrying Member fails to deliver all the standard warrants within the specified period, or the buyer’s carrying Member fails to make the commodity payments in full within the specified time period, or another act of default recognized by the Exchange has occurred.

Article 51     No Member shall refuse to perform delivery obligations under a futures contract due to the default of its Client or another relevant party. In the event of non-performance, the Exchange will take actions pursuant to applicable rules.

Article 52     The Exchange will supervise and administer the Designated Delivery Warehouses and other delivery venues certified by the Exchange, the specific rules for which shall be separately formulated by the Exchange.

Article 53     The Exchange may require a Designated Delivery Warehouse to make rectification or financial compensations, or, if the circumstances are serious, revoke the certification of the Designated Delivery Warehouse, if said warehouse:

(i) issues a falsified warrant;

(ii) restricts the load-in or load-out of any deliverable commodity in violation of the rules of the Exchange;

(iii) discloses any confidential business information relating to futures trading;

(iv) engages in futures trading in violation of applicable laws or regulations of the PRC; or

(v) engages in any other activity that breaches any applicable rules of the Exchange.

Article 54     A Designated Delivery Warehouse shall be liable for the losses resulting from its fault that makes the holder of a standard warrant unable to exercise all or part of the rights under such warrant.

Losses remaining uncovered will be compensated for by the Exchange in accordance with applicable rules. Afterwards, the Exchange is entitled to recourse against the Designated Delivery Warehouse.

Article 55     An option buyer may decide whether to exercise the option within the time period specified by the Exchange.

Where the buyer exercises the option, the seller shall fulfill its obligations under the options contract in accordance with applicable rules of the Exchange.

Exercise and performance of an options contract shall be conducted in the name of the Member. Unless otherwise prescribed by the Exchange, a Client or other relevant person shall exercise and perform the contract through its carrying Member.

CHAPTER 7       RISK CONTROL

Article 56     The Exchange implements price limit.

The range of price limit shall be set by the Exchange and may be adjusted by the Exchange based on market risk conditions.

Article 57     The Exchange implements position limit and may set and adjust the position limit based on market risk conditions.

Members, Overseas Special Participants, Overseas Intermediaries, and Clients shall trade within the position limit.

Anyone who is engaged in hedging or arbitrage trading shall trade within its hedging quota or arbitrage quota, respectively.

Article 58     The Exchange implements trading limit. It may set and adjust the limit on the intraday cumulative size of newly established positions and other metrics based on market conditions.

Article 59     The Exchange implements forced position liquidation. If a Member, Overseas Special Participant, Overseas Intermediary, or Client violates the position limit, fails to meet a margin call promptly, or is in another situation prescribed by the Exchange, the Exchange may conduct forced position liquidation accordingly.

Any profits generated from forced position liquidation shall be disposed of in accordance with relevant rules. All costs and losses incurred, including any additional losses arising from failed liquidation due to market factors, shall be borne by the trader whose positions have been liquidated.

Article 60     The Exchange implements forced position reduction.

When a same direction limit-locked market occurs continuously or there are other circumstances that may cause significant market risks during futures trading, the Exchange may reduce the open positions held by market participants.

Article 61     The Exchange requires large trader reporting. When the open position held by a Member, Overseas Special Participant, Overseas Intermediary, or Client reaches the reporting threshold specified by the Exchange, it shall report to the Exchange about its funds, open positions, and other relevant information pursuant to applicable rules. A Client shall report through its carrying FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary, failing which the FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary shall do so on the Client’s behalf.

The Exchange shall set and may adjust the reporting threshold and relevant requirements based on market risk conditions.

Article 62     The Exchange issues risk warnings.

The Exchange may, when it deems necessary, take one or a combination of the following measures to warn against and mitigate risks: requiring a Member, Overseas Special Participant, Overseas Intermediary, or Client to give an explanation on a specific matter, conducting an interview and giving a verbal alert, issuing a written warning, or making a public risk warning announcement.

Article 63     The Exchange implements an actual control account management system.

The Exchange shall consider the trades and positions of a group of actual control accounts on an aggregate basis when enforcing position limit, trading limit, and abnormal trading management rules.

Article 64     The Exchange implements an abnormal trading management system. The Exchange may adopt corresponding self-regulatory measures against any Non-FF Member, Overseas Special Non-Brokerage Participant, or Client who is involved in abnormal trading. The standards and procedures for identifying and handling abnormal trading shall be separately provided by the Exchange.

An FF Member, Overseas Special Brokerage Participant, or Overseas Intermediary shall duly supervise its Clients’ trading activities by timely identifying, stopping, and reporting their abnormal trading activities, and shall not connive, induce, incite, or support Clients to engage in abnormal trading.

Article 65     If a same direction limit-locked market occurs or if market risks have noticeably increased, the Exchange may:

(i) adjust the price limit;

(ii) raise the margin requirement;

(iii) adjust the rate of transaction fees;

(iv) adjust the trading limit;

(v) perform forced position reduction; and/or

(vi) take other necessary measures.

Article 66     In case a Member is unable to perform its contractual obligations, the Exchange has the power to:

(i) suspend it from opening new positions;

(ii) execute forced position liquidation in accordance with applicable rules and use the margin released therefrom for contract performance and compensation;

(iii) lawfully dispose of the assets it has posted as collaterals;

(iv) use proceeds from membership transfer and other funds of the Member for contract performance and compensation;

(v) draw on the risk reserve of the Exchange; and/or

(vi) draw on the Exchange’s own funds to perform the obligations on behalf of the Member.

The Exchange shall gain the corresponding right of recourse against the defaulting Member upon performing the contractual obligations on its behalf.

Article 67     Where the Exchange has grounds to believe that a Member, Overseas Special Participant, Overseas Intermediary, or Client has violated the rules of the Exchange, which is causing or will cause a significant impact on the market, it may take the following interim measures to contain the impact of the violation:

(i) limiting funds deposits;

(ii) limiting funds withdrawals;

(iii) limiting the opening of new positions;

(iv) raising its margin requirement;

(v) requiring the close-out of positions within a specified time period; and/or

(vi) executing forced liquidation.

The Exchange shall promptly report to the CSRC following the adoption of the interim measures (iv), (v), or (vi) of the preceding paragraph.

If the Exchange has taken any interim measure, it shall notify the party concerned by writing, recorded telephone call, or other forms of communication that can be recorded, and shall provide justifications.

CHAPTER 8       ABNORMAL CONDITIONS

Article 68     If any force majeure, technical failure, accident, or other event prevents or threatens to prevent any trading, clearing, delivery, exercise or performance of options contracts, or other activities, the Exchange may handle the case as an abnormal condition and take emergency measures pursuant to its rules.

In case any risks described in Article 65 are not mitigated by the corresponding measures, the Exchange may handle the case as an abnormal condition and take emergency measures pursuant to its rules.

Article 69     The Exchange shall inform the CSRC before declaring an abnormal condition and taking emergency measures.

Article 70     In the event that the Exchange suspends trading following declaration of an abnormal condition, the suspension period shall not exceed three (3) trading days, unless an extension is approved by the CSRC.

Article 71     The Exchange shall develop an emergency plan for abnormal conditions.

CHAPTER 9       INFORMATION DISCLOSURE AND MANAGEMENT

Article 72     The futures trading information of the Exchange includes market data, trading data, and statistical documents generated during futures trading; all announcements and notices issued by the Exchange; and other relevant information required to be disclosed by the CSRC.

Article 73     The Exchange has the exclusive right over all raw information generated from trading activities and all information products derived therefrom, and has sole authority over their management and release.

Without the consent of the Exchange, no entity or individual may use such information or products for commercial purposes.

Article 74     Futures trading information released by the Exchange includes contract names, contract months, opening prices, last prices, price changes, closing prices, settlement prices, highest prices, lowest prices, trading volumes, open interest and changes, delta, implied volatilities, Members’ rankings by trading volume and open interest, storage capacity approved by the Exchange for delivery at each Designated Delivery Warehouse, quantities of standard warrants and changes, and other information required to be published.

Information shall be released on a real-time, daily, weekly, monthly, or yearly basis based on its content.

Article 75     The Exchange may compile and release market indices based on data from the futures, options, and physical markets.

The Exchange may develop, either independently or through a third-party it authorizes, index products based on the indices in the preceding paragraph.

Article 76     The Exchange shall utilize effective means of telecommunication to build a real-time market data and execution report system.

Article 77     The Exchange, Members, Overseas Special Brokerage Participants, Overseas Intermediaries, Designated Delivery Warehouses, Designated Depository Banks, Designated Inspection Agencies, and Information Service Providers are prohibited from releasing false or misleading information.

Article 78     The Exchange, Members, Overseas Special Brokerage Participants, Overseas Intermediaries, Designated Delivery Warehouses, Designated Depository Banks, Designated Inspection Agencies, and Information Service Providers shall not disclose any confidential business information they obtained in the course of business. Upon approval, the Exchange may provide relevant information to relevant regulatory authorities or other relevant entities subject to applicable confidentiality rules.

Article 79     The Exchange shall establish remote data backup facilities to ensure the security of transaction data.

Article 80     The Exchange is entitled to charge fees for information management and releases.

CHAPTER 10     SELF-REGULATION

Article 81     The Exchange shall exercise self-regulation of all futures trading-related business activities in accordance with PRC laws, regulations, administrative rules, these General Exchange Rules, and other applicable rules.

Article 82     The primary self-regulatory duties of the Exchange include:

(i) supervising and inspecting the implementation of futures market laws, regulations, administrative rules, policies, and rules to control market risks;

(ii) supervising and reviewing the futures trading, futures trading-related activities, and internal management of Members, Overseas Special Participants, Overseas Intermediaries, and Clients;

(iii) supervising and checking the financial conditions and credit stranding of Members, Overseas Special Participants, and Clients;

(iv) supervising and inspecting the futures trading-related activities of Designated Delivery Warehouses, Designated Depository Banks, and other futures market participants;

(v) mediating and resolving disputes arising from futures trading; investigating and handling violations of rules and regulations;

(vi) assisting judicial authorities and administrative enforcement agencies in their performance of their lawful functions; and

(vii) conducting self-regulation over any other activity that breaches market openness, fairness, impartiality, and integrity, or creates market risks.

Article 83     The Exchange may exercise the following powers when performing its self-regulatory duties:

(i) accessing and making copies of any futures trading-related information or documents;

(ii) investigating and collecting evidence from Members, Overseas Special Participants, Overseas Intermediaries, Clients, Designated Delivery Warehouses, Designated Depository Banks, Designated Inspection Agencies, Information Service Providers, and other futures market participants;

(iii) requiring Members, Overseas Special Participants, Overseas Intermediaries, Clients, Designated Delivery Warehouses, Designated Depository Banks, Designated Inspection Agencies, Information Service Providers, or other futures market participants to issue declarations, statements, explanations, and clarifications on the matter under investigation; and

(iv) exercising any other powers necessary for performing its self-regulatory duties.

Article 84     In futures trading organized by the Exchange in accordance with these General Exchange Rules; the actions of trading, clearing, delivery, and the exercise and performance of options contracts, including any executed orders, closed-out futures positions, funds received as margin and premium, marketable securities transferred or being used as margin, and standard warrants paired for delivery, the legal status of relevant properties; as well as those measures adopted by the Exchange to handle trading defaults, shall not be canceled or invalidated due to the commencement of bankruptcy proceedings against any Member.

Article 85     When a Member enters bankruptcy proceedings, the Exchange may still conduct net settlement for such Member’s open positions in accordance with these General Exchange Rules and related implementing rules.

Article 86     The Exchange shall carry out a full or random inspection on the Members’ and other entities’ observance of the rules of the Exchange on an annual basis, and report the inspection scheme and findings to the CSRC.

Article 87     The Exchange shall conduct formal investigation into any suspected violation of rules and regulations.

The Exchange shall promptly discover, handle, and report to the CSRC in accordance with the law clues to futures violations, and support the CSRC in its inspections, investigations, and evidence collection.

Article 88    Members, Overseas Special Participants, Overseas Intermediaries, Clients, Designated Delivery Warehouses, Designated Depository Banks, and other futures market participants shall accept the regulation of the Exchange over their futures trading and other related activities. The Exchange may take necessary restrictive measures and actions in accordance with relevant rules against any of the above persons who provides false information, conceals facts, evades investigations, or otherwise ignores or obstructs the performance of duties by the Exchange’s staff.

Article 89     The Exchange may, after initiating a formal investigation against a Member, Overseas Special Participant, Overseas Intermediary, Client, Designated Delivery Warehouse, Designated Depository Bank, or other futures market participant that is suspected of committing a material violation of rules or regulations in its futures activities, take appropriate measures to contain the impact of such violation.

Article 90     The Board of Directors may approve the creation of an ad hoc investigation committee, consisting of representatives of Members, staff of the Exchange, and other persons designated by the Board of Directors, to address any significant issue arising in the course of futures trading. During its existence the committee shall exercise its self-regulatory powers in accordance with these General Exchange Rules and shall implement a recusal system.

Article 91    Each Member, Overseas Special Participant, Overseas Intermediary, Client, Designated Delivery Warehouse, Designated Depository Bank, or other futures market participant has the right to submit a complaint or whistleblowing tip to the Exchange or the CSRC if any staff member of the Exchange fails to duly perform his or her self-regulatory duties.

Upon verification, the Exchange shall take actions in accordance with applicable laws, regulations, and rules.

Article 92     The Exchange shall formulate rules to handle violations of rules and regulations.

CHAPTER 11     LIABILITIES

Article 93     FF Members, Overseas Special Brokerage Participants, and other persons shall assume all liabilities arising from the futures trades executed in their names. After undertaking the responsibilities, they may demand the compensation for the losses from the relevant responsible parties in accordance with laws, rules and regulations, and the rules of the Exchange.

Non-FF Members, Overseas Special Non-Brokerage Participants, and Clients shall assume all liabilities arising from their futures trades.

Article 94     The Exchange may hold any Member who committed a default during physical delivery to be liable for breach of contract and take actions against such Member in accordance with applicable rules of the Exchange.

Article 95     Once concluded according to the rules of the Exchange, a trade shall become legally binding and shall not be voided or subject to change or cancellation on the grounds of any defect in the qualifications of a trading party, any false expression of intention, or any dispute over the source of margin. Any losses resulting from the trade shall be borne by the trading parties.

Article 96     The Exchange shall not be held liable for the followings:

(i) losses resulting from a technical system breakdown not attributable to the Exchange;

(ii) trading by market participants is adversely affected by a breakdown of the data relay service of a Member, Information Service Provider, or media outlet when the market data system of the Exchange functions normally;

(iii) losses resulting from any emergency or interim measure taken by the Exchange; and

(iv) other losses incurred through no fault of the Exchange.

Article 97     Trading results shall not be altered or canceled as a result of the declaration of bankruptcy by any relevant Member.

Article 98     In the event that a Designated Depository Bank falls into bankruptcy or is involved in any dispute over debt, the margin held in that bank shall not be deemed as its bankruptcy estate or its assets to be frozen or levied.

Article 99     In the event that a Designated Delivery Warehouse falls into bankruptcy or is involved in any debt dispute, any futures commodities deposited by market participants the title to which is not held by that warehouse shall not be deemed as its bankruptcy estate or its assets to be sealed up or seized.

CHAPTER 12     DISPUTE RESOLUTION

Article 100   Disputes over futures trading and other related activities between or among any Members, Overseas Special Participants, Overseas Intermediaries, Clients, Designated Delivery Warehouses, Designated Depository Banks, Designated Inspection Agencies, Information Service Providers, and other futures market participants may be settled through negotiation, submitted to the Exchange for mediation, or submitted to an arbitration institution or a court in accordance with the law.

Article 101   The party requesting for mediation by the Exchange shall submit a written application. If an agreement is reached through mediation, the Exchange will prepare a mediation agreement that will come into effect upon being signed or sealed by the mediating parties.

Article 102   Disputes between the Exchange and any Member, Overseas Special Participant, Overseas Intermediary, Client, Designated Delivery Warehouse, Designated Depository Bank, Designated Inspection Agency, Information Service Provider, or other futures market participant shall be submitted in accordance with PRC laws, regulations, and relevant agreements to an arbitration institution for arbitration or to a people’s court of the PRC for litigation. In such disputes the determination of rights and obligations shall be governed by PRC laws.

CHAPTER 13     MISCELLANEOUS

Article 103   The following terms shall have the meanings set forth below:

(1) “Member” refers to a for-profit legal person or unincorporated organization that is duly established in the Chinese mainland and approved by the Exchange to trade futures on or through the Exchange subject to applicable laws, regulations, and the Articles of Association of the Exchange.

(2) “Overseas Broker,” as provided in paragraph 3, Article 2 of the Interim Measures for the Administration of Overseas Traders’ and Overseas Brokers’ Engagement in the Trading of Specified Domestic Futures Products (the “Interim Measures”), refers to a financial institution duly established outside the Chinese mainland and certified or licensed by its local futures regulator to accept funds and trading orders from Clients and execute futures trading orders in its own name for said Clients.

(3) “Overseas Trader,” as provided in paragraph 2, Article 2 of the Interim Measures, refers to a legal person or unincorporated organization duly established outside the Chinese mainland, or a natural person with lawful foreign citizenship, that engages in futures trading and accepts the trading results.

(4) “Client” refers to a natural person, legal person, or unincorporated organization domiciled in or outside the Chinese mainland who authorizes FF Members, Overseas Special Brokerage Participants, Overseas Intermediaries, or other authorized institutions in accordance with PRC laws and regulations to engage in futures trading and accept the trading results.

(5) “Trading day” refers to any day from Monday to Friday excluding public holidays in the PRC, except as otherwise set by the Exchange. For those products available for continuous trading, a trading day covers the continuous trading hours of the preceding business day and the day trading hours of the current day; for those products not available for continuous trading, a trading day only covers the day trading hours of a day. The daily trading hours for each product shall be separately announced by the Exchange.

(6) “Business day” refers to any day other than public holidays and rest days prescribed by the law of the PRC. A “business day” and a “day” both refer to a calendar day from 00:00—24:00 Beijing Standard Time.

(7) “Day trading hours” refers to 9:00 a.m. to 11:30 a.m. and 1:30 p.m. to 3:00 p.m. Beijing Standard Time on a trading day, and such other hours as announced by the Exchange. Any change to the trading sessions will be announced by the Exchange.

(8) “Continuous trading” refers to the trading taking place within the hours prescribed by the Exchange other than the day trading hours.

(9) “Of the day,” or “each day” refers to on a certain trading date and each trading day, respectively.

(10) “Trading code” refers to a dedicated code that a Non-FF Member, Client, or other trade uses for futures trading.

(11) “Price limit” refers to the limit up or down price prescribed for a contract within each trading day. Orders with price beyond this limit will be considered invalid and will not be executed.

(12) “Limit-locked market” refers to the situation where, within five (5) minutes prior to the close of a trading day, a futures contract has only bid (ask) orders at the limit up (down) price but no ask (bid) orders, or any ask (bid) orders are instantly filled and the last price is the same as the limit up (down) price.

(13) “Minimum price fluctuation,” with respect to a futures contract, refers to the minimum price change for an order in the contract.

(14) “Contract month,” with respect to a futures contract, refers to the month in which the contract is to be delivered according to the contract specifications.

(15) “Contract month,” with respect to an options contract, refers to the month in which the underlying asset of the contract should be delivered.

(16) “Last trading day” refers to the last day on which a contract is traded.

(17) “Contract size” refers to the quantity of the underlying asset corresponding to one (1) lot of the contract. Trading must be conducted in multiples of one (1) lot. The contract size of a product is specified in the contract.

(18) “Grade and quality specifications” refers to the quality requirements for the underlying asset set forth in the contract.

(19) “Trading price,” with respect to a futures contract, refers to the price to deliver the standard deliverables of the futures contract at a benchmark delivery warehouse, unless otherwise prescribed by the Exchange.

(20) “Underlying asset,” with respect to an options contract, refers to the asset that the option buyer has the right to purchase (sell) and the option seller has the obligation to sell (purchase).

(21) “Limit order” refers to an order that shall be executed at the specified price or better.

(22) “Actual control relationship” refers to the action or ability of any person to control or to materially influence the trading decisions of another person by virtue of its powers including the power to manage, use, receive incomes from, or dispose of the futures account of the latter person.

(23) “Opening price” refers to the execution price of a particular contract established by a call auction in the five (5) minutes before market open or, if none is established thusly, the first execution price after the call auction.

(24) “Closing price” refers to the last execution price of a particular contract on a given trading day.

(25) “Settlement price” refers to the benchmark price of a futures contract established after market close on each trading day, which is used to clear margin and current day profit or loss on open positions in the contract, and to calculate the price limit of the contract for the next trading day. Settlement price shall be determined in the way separately prescribed by the Exchange.

(26) “Delta” refers to the ratio between the change in the price of an options contract to the change in the price of the underlying asset.

(27) “Implied volatility,” with respect to an options contract, refers to the price volatility of the underlying futures contract as computed from the options pricing model based on the market price of the option.

(28) “Margin” refers to the funds or marketable securities such as standard warrants and government bonds that are of stable value and high liquidity deposited by futures traders in accordance with relevant rules for trade settlement and performance guarantee.

(29) “Clearing deposit” refers to the funds deposited by a Member in a dedicated settlement account of the Exchange for trade settlement. It is a type of guarantee fund that is not yet used as margin for the positions held by the Member.

(30) “Trading margin” refers to the funds deposited by a Member in a dedicated settlement account with the Exchange to ensure the fulfillment of a contract and to be used as margin for the positions held by the Member.

(31) “Premium” refers to the market price of an options contract. An option buyer shall pay the premium to the seller in exchange for the rights under the options contract.

(32) “Risk reserve” refers to a fund set up by the Exchange to provide financial guarantees for the normal operations of the futures market and to cover losses arising from unpredictable risks.

(33) “Physical delivery” refers to the type of settlement for matured futures contracts by the paired buyer and seller through the transfer of the ownership of the underlying asset of the contract in accordance with the rules and procedures of the Exchange.

(34) “Final settlement price” refers to the benchmark price for the delivery of a futures contract.

(35) “Standard warrant” refers to the standardized certificate, issued by a Designated Delivery Warehouse and certified by the Exchange, for taking delivery of the commodities.

(36) “Designated Delivery Warehouse” refers to a venue certified by the Exchange for the physical delivery of futures contracts.

(37) “Designated Depository Bank” refers to a bank designated by the Exchange to offer custodian services of futures margins.

(38) “Designated Inspection Agency” refers to an agency designated by the Exchange to inspect futures commodities.

(39) “Position limit” refers to the maximum position prescribed by the Exchange that may be held by a Member, Overseas Special Participant, Overseas Intermediary, or Client.

(40) “Rules of the Exchange” refers to the Articles of Association, General Exchange Rules, implementing rules, and other normative documents of the Exchange including measures, guidelines, notices, and announcements.

(41) “PRC” refers to the People’s Republic of China. Any reference to time means the Beijing Standard Time. Unless otherwise stated, “state” and “national” refer to the PRC; “futures market” refers to the futures market of the Exchange.

Article 104   Notices and documents issued by the Exchange may be sent by the following methods and will be deemed delivered and in effect by the following rules:

(i) If delivered in written form and in person, the effective date shall be the day of delivery;

(ii) If delivered by telephone call or telex, the effective date shall be the day of acknowledgment by the recipient;

(iii) If delivered by fax, the effective date shall be the day the fax is successfully sent to the fax number designated by the recipient;

(iv) If delivered by a courier service recognized by the Exchange, the effective date shall be the fifth trading day of posting to an address within the Chinese mainland and the 10th trading day of posting to an address outside the Chinese mainland;

(v) If delivered by email or other electronic messaging systems, the effective date shall be the day the notice or document enters the recipient’s designated electronic messaging system, or, if no such system has been designated, the first time the notice or document enters any system of the recipient;

(vi) If delivered by announcement, all intended recipients shall be deemed to have received the notice on the day the announcement is first published; or

(vii) Other methods prescribed by the Exchange.

The day on which a notice or document is returned shall be deemed as the day of delivery if it is not received by the recipient for the following reasons: the address provided or confirmed by the recipient is incorrect; the recipient refuses to provide an address; the recipient fails to timely notify the Exchange of a change of address; or the recipient or the agent designated by the recipient refuses to sign the receipt of the notice or document.

If the Exchange sends a notice by any combination of the above methods, the time of delivery shall be the earliest time the notice is delivered.

Article 105   The Exchange may formulate implementing rules and other specific rules in accordance with these General Exchange Rules.

Article 106   The Exchange may provide trading, clearing, delivery, and other services for other business related to futures trading. Rules governing such services will be separately provided by the Exchange.

Article 107   The Board of Directors of the Exchange reserves the right to interpret these General Exchange Rules.

Article 108   These General Exchange Rules and any amendment hereto shall be subject to the approval of the Members’ Assembly and the CSRC.

Article 109   These General Exchange Rules shall take effect on July 20, 2021.