Shanghai International Energy Exchange has released its Notice on the Listing and Trading of Low Sulfur Fuel Oil Options as follows:

All related parties,

The China Securities Regulatory Commission (CSRC) has approved the Shanghai International Energy Exchange (hereinafter referred to as “INE”) to list Low Sulfur Fuel Oil Options. In accordance with the INE rules, this Notice is hereby issued to inform you of the following matters:

I. Listing Date

Low Sulfur Fuel Oil options will be listed for trading on September 10, 2026. The market will open at 9:00 a.m., after a call auction from 8:55 a.m. to 9:00 a.m..

II. Trading Hours

Day trading hours for Low Sulfur Fuel Oil options: 9:00–10:15 a.m., 10:30–11:30 a.m., and 1:30 p.m.–3:00 p.m. Monday to Friday

Night trading hours for Low Sulfur Fuel Oil options (same as the underlying futures contracts): from 9:00 p.m. to 11:00 p.m., Monday to Friday

There is no continuous trading session on the business day before any national holiday (excluding weekends).

III. Listed Contracts

The following contracts will be listed for trading on the first trading day: Low Sulfur Fuel Oil option contracts LU2701, LU2702.

The open interest threshold of the underlying futures contracts for the contract months of the newly listed Low Sulfur Fuel Oil options is 10,000 lots (single-counted).

IV. Listing Price

The listing price will be published by INE on the trading day preceding the listing day.

The listing price is calculated with the binomial model. The risk-free interest rate is the People’s Bank of China’s benchmark rate for one-year term deposit. The volatility of option contracts of all months is the 90-day historical volatility of the most active underlying futures contracts.

V. Maximum Order Size

The maximum order quantity is 100 lots for limit orders and 30 lots for market orders.

Ⅵ. Exercise and Fulfillment

Low Sulfur Fuel Oil options are American-style options. Non-Futures Firm Members, Overseas Special Non-Brokerage Participants (OSNBP), and Clients should submit exercise or abandonment requests during the hours and through the channels listed below:

Table 1: Time and Channel for Exercise and Fulfillment

Ⅶ. Position Limit

For the purposes of position limit, the positions of Low Sulfur Fuel Oil options will not be aggregated with futures positions.

For any Non-FF Member, OSNBP, or Client, the total positions of long calls and short puts of any particular contract month, as well as the total positions of long puts and short calls of any particular contract month, should in each case not exceed the position limit listed below. Accounts linked by actual control relationship are treated as a single account for the purposes of position limit.

Table 2: Position Limit for Low Sulfur Fuel Oil Options

Ⅷ. Hedging Quota

Any hedging quota obtained may be used on futures contracts, option contracts, or a combination of both.

Ⅸ. Fees

Transaction fees of Low Sulfur Fuel Oil options: RMB 0.2 yuan/lot, currently waived for closing intraday positions. From the date of listing to December 31, 2026, a 50% discount on transaction fees for hedge trading shall apply, except for high-frequency traders recognized by INE. Exercise (fulfillment) fees are RMB 0.2 yuan/lot; pre-exercise (fulfillment) options netting fees are RMB 0.2 yuan/lot; post-exercise (fulfillment) futures netting fees are currently waived; fees for automatic netting for market makers are currently waived.

Order fees will be charged to clients for Low Sulfur Fuel Oil options, with a uniform rate as shown in the table below.

Table 3: Order Fee Rates for Low Sulfur Fuel Oil Options

Notes: message amount = total number of trading orders such as order placement, order cancellation, and RFQ; OTR= (message amount / number of executed orders)- 1. If the actual number of executed orders is 0, it would be treated as 1 for calculating OTR. The message amount mentioned above includes order placement and cancellation resulting from fill-or-kill (FOK) orders and fill-and kill (FAK) orders.

X. Request for Quote

Non-FF Members, OSNBPs, and Clients may request for quote (“RFQ”) from market makers for all listed option contracts. An RFQ should specify the contract code, and there should be a minimum 60-second interval between two RFQs for the same option contract. No RFQ may be submitted for a particular option contract when its best bid-ask spread is less than or equal to the spread shown in the table below.

Table 4: Response Criteria for RFQs on Low Sulfur Fuel Oil Options

XI. Options Trading Access

Account-opening institutions (i.e., Futures Firm Members, Overseas Special Brokerage Participants, and Overseas Intermediaries) must enforce trader eligibility requirements in strict accordance with the Futures Trading Participant Eligibility Management Rules of the Shanghai International Energy Exchange, the Operational Guidelines for the Futures Trading Participant Eligibility Management Rules of the Shanghai International Energy Exchange, and other applicable rules. Non-FF Members and OSNBPs should apply to the Shanghai International Energy Exchange for options trading access in accordance with the eligibility requirements for general institutional clients.

Market participants shall make necessary preparations and strengthen risk management for Low Sulfur Fuel Oil options to ensure the smooth functioning of the market.

In the event of any inconsistency between the Chinese version and English translation, the Chinese version shall prevail.