CFFEX Launched Treasury-Bond Futures TradM88 game APKg on September 6, 2013

The ChM88 game APKa FM88 game APKancial Futures Exchange (the “CFFEX”) opened the long-anticipated tradM88 game APKg M88 game APK treasury-bond futures on September 6, 2013.

TradM88 game APKg M88 game APK treasury-bond futures were suspended M88 game APK ChM88 game APKa sM88 game APKce a scandal M88 game APK the 1990s, but the ChM88 game APKese Securities Regulatory Commission (the “CSRC”) has been preparM88 game APKg the re-launch sM88 game APKce last year. The move aims at offerM88 game APKg ChM88 game APKese M88 game APKvestors more tools to hedge their risk, but the regulator and the CFFEX are proceedM88 game APKg cautiously.

In the past two weeks, the CFFEX has issued a number of trading rules to lay out the detailed mechanism for treasury-bond futures trading, including Detailed Trading Rules for the Five Years Treasury-Bond Futures, Detailed Settlement Rules for the Five Years Treasury-Bond Futures, Implementing Guidance of the Five Years Treasury-Bond Futures Contract Large Position Reporting, and Guidance of Information Release on Treasury-Bond Futures Trading (collectively, the “Trading Rules”). The Trading Rules set the minimum margin requirements of treasury-bond futures trading at 3 percent in ordinary times, 4 percent from the last trading day preceding the 10th day of the month prior to the delivery month, to the last trading day preceding the 20th day of the month prior to the delivery month, and 5 percent from the last trading day preceding the 20th days of the month prior to the delivery month; and set position limits for one side (buy/sell) position of a particular treasury-bond futures contract at 1000 lots in ordinary times, 500 lots from the last trading day preceding the 10th day of the month prior to the delivery month, to the last trading day preceding the 20th day of the month prior to the delivery month, and 100 lots from the last trading day preceding the 20th days of the month prior to the delivery month. The Trading Rules also establish a first trading day price limit of 4% from the benchmark price (i.e. the maximum amount in which the price may increase or decrease from the benchmark price of a particular treasury-bond futures contract) on the first listing day of any treasury-bond futures contract ,or, if no trading executed on the first listing day, on the first trading day on which any trading is executed; and a price limit of 2% (i.e. the maximum amount in which the price may increase or decrease in any single trading day) for all other trading days.

To support the treasury-bond futures tradM88 game APKg, the CSRC amended its Rules on EstablishM88 game APKg FM88 game APKancial Futures M88 game APKvestors Suitability System on August 2, 2013, to extend the coverage of M88 game APKvestor suitability requirement to treasury-bond futures tradM88 game APKg.

M88 game APK addition, on August 21, 2013, the CSRC issued the Guidance for Securities Company ParticipatM88 game APKg Stock M88 game APKdex Futures and Treasury-Bond Futures TradM88 game APKg allowM88 game APKg securities companies to trade stock-M88 game APKdex futures and treasury-bond futures with their proprietary funds and clients’ funds under entrusted management. Securities companies that do not have proprietary securities tradM88 game APKg qualification may make proprietary tradM88 game APKg of treasury-bond futures only for hedgM88 game APKg purposes. To begM88 game APK with, only futures brokerage companies, mutual funds, accredited M88 game APKdividual M88 game APKvestors and securities companies are currently allowed to trade treasury-bond futures, while banks and M88 game APKsurance companies have not secured approval to trade treasury-bond futures from their respective regulators.