Shanghai Futures Exchange : Notice on Market Risk Control during the Spring Festival 2016

Updated on:Jan 22,2016

FROM: Shanghai Futures Exchange

TO: All Members, Certified Settlement Banks and Certified Delivery Warehouses

CC: General Office and Futures Regulatory Department of China Securities Regulatory Commission

SUBJECT: Notice on Market Risk Control during the Spring Festival 2016

FILING SERIAL: SQF [2016] No. 12 January 22, 2016

According to the Announcement by the Exchange on Trading Schedule during Spring Festival for Year 2016, the Exchange's futures markets will be closed from February 7 through February 13. According to the Risk Management Rules of the Shanghai Futures Exchange, we decide to adjust the trading margin requirements and price limits for each product around the Spring Festival.

I. In the absence of a limit-locked market on February 4, 2016, the trading margin requirements as from the market close and settlement on that day and the price limits as for the following trading day will be adjusted as follows:

For futures contracts on aluminum and lead, their trading margin requirements rise from 5% to 8%, and their price limits from 4% to 6%;

For futures contracts on tin, the trading margin requirements rise from 5% to 9%, and the price limits from 4% to 7%;

For futures contracts on rebar, hot-rolled coil and gold, their trading margin requirements rise from 6% to 9%, and their price limits from 5% to 7%;

For futures contracts on zinc, the trading margin requirements rise from 6% to 10%, and the price limits from 5% to 8%;

For futures contracts on copper, nickel, silver, natural rubber and bitumen, their trading margin requirements rise from 8% to 11%, and their price limits from 6% to 8%;

For futures contracts on wire rod and fuel oil, their trading margin requirements remain as 20% and their price limits from 5% to 7%.

In the event of any discrepancy between the above-mentioned margin requirements and price limits and the ones prescribed in existing rules of the Exchange, the higher standard shall prevail.

II. When the trading resumes on February 15, 2016, the trading margin requirements and price limits of the above-mentioned futures contracts should be restored to their original level as from the following trading day. Please refer to the Risk Management Rules of the Shanghai Futures Exchange for implementation of other provisions concerning trading margins and price limits.

III. All members shall, on a timely basis, carry out the requirements for position limits and adjustment in multiple integrals in regard to the contracts they have open interest in, and be prepared for delivery. The final trading day for all the futures contracts of February should be February 15, and the open interests of natural person clients at the market close of February 3 should be 0. All members shall fully understand investors' intention of delivery, inspect the number and validity period of the warrants for contract delivery in advance and do well in the declaration and issuance of designated VAT invoices to avoid delivery risks.

All members shall do well in risk prevention, duly increase margin requirement based on investors' position and risk level, strengthen the management over withdrawal and deposit of investor's funds, remind investors of the importance of prudent trading and rational investment, and attach importance to technical system maintenance and IT network safety during the holiday. Certified settlement banks and certified delivery warehouses are required to ensure smooth market operation.