Administrative Regulations on Futures Trading (Revised in 2017)

Order of the State Council of the People's Republic of China No.676

March 1, 2017

(Promulgated by the Order of the State Council of the People's Republic of China No.489 on March 6, 2007; revised for the first time in accordance with the Decision of the State Council on Revising the Administrative Regulations on Futures Trading on October 24, 2012; revised for the second time according to the Decision of the State Council on Abolishing and Revising Some Administrative Laws and Regulations on July 18, 2013; revised for the third time in accordance with the Decision of the State Council on Revising Certain Administrative Regulations on February 6, 2016; and revised for the fourth time in accordance with the Decision of the State Council on Revising and Repealing Certain Administrative Regulations on March 1, 2017)

Chapter I General Provisions

Article 1 These Regulations are formulated for the purposes of regulating futures trading, strengthening the supervision over and administration of futures trading, maintaining the order of futures market, preventing risks, protecting the lawful rights and interests of all futures trading parties involved and public interests and promoting positive and steady development of the futures market.

Article 2 Any entity or individual that engages in futures trading or related activities shall abide by these Regulations.
For the purposes of the Regulations, the term of futures trading shall refer to the trading that is conducted by means of public centralized trading or in any other manner as may be approved by the futures regulatory authority under the State Council, and takes futures contract or option contract as the subject matter of trading.
For the purposes of the Regulations, the term of futures contract shall refer to a standardized contract that is formulated in a uniform manner by the futures exchange for delivering a specific amount of subject matter on a stipulated future date at a specified location. A futures contract includes commodity futures contract, financial futures contract and other futures contracts.
For the purposes of the Regulations, the term of option contract shall refer to a standardized contract that is formulated in a uniform manner by the futures exchange and specifies that the buyer is entitled to buy or sell the specified subject matter (including the futures contract) at a specific price on a stipulated future date.

Article 3 To conduct futures trading, one shall follow the principles of openness, fairness, justice, and good faith. Illegalities, such as fraud, insider trading, and manipulation of futures trading prices, shall be forbidden.

Article 4 The futures trading shall be conducted in the futures exchange specified by Paragraph 1 of Article 6 hereof or any other futures exchange as may be approved by the State Council or the futures regulatory authority under the State Council.
No futures trading may be conducted at any location outside the futures exchange specified in the preceding paragraph.

Article 5 The futures regulatory authority under the State Council shall carry out centralized and unified supervision over and administration of the futures market.
The dispatched offices of the futures regulatory authority under the State Council shall perform their duties of supervision and administration according to relevant provisions hereof and the authorization of the futures regulatory authority under the State Council.

Chapter II Futures Exchanges

Article 6 The establishment of a futures exchange shall be subject to the examination and approval of the futures regulatory authority under the State Council.
Without the approval of the State Council or the futures regulatory authority under the State Council, no entity or individual may establish any futures exchange or conduct any futures trading or any other related activities.

Article 7 A futures exchange shall not run for profit-making purposes and shall carry out self-discipline administration according to its own bylaws. A futures exchange shall assume civil liabilities with all its property. The person in charge of a futures exchange shall be appointed and removed by the futures regulatory authority under the State Council.
The administrative measures for a futures exchange shall be formulated by the futures regulatory authority under the State Council.

Article 8 A member of a futures exchange shall be the enterprise legal person or any other economic organization registered in the territory of the People's Republic of China.
A futures exchange may implement the member grading clearing system. The members of the futures exchange that implements the member grading clearing system are composed of clearing members and non-clearing members.

Article 9 A person who is any one specified by Article 147 of the Company Law of the People's Republic of China or any one stated below shall not hold the post of the person in charge of or an accountant of any futures exchange:
1. The person who was in charge of a futures exchange, securities exchange, or securities registration and clearing institution, was a director, supervisor, or senior executive of a futures company or securities company, or was any other person specified by the futures regulatory authority under the State Council, having been removed from that office for less than five years for unlawful act or disciplinary offence; or
2. A lawyer, certified public accountant, or professional of an(a) investment consulting organization, financial consultant organization, assets evaluation organization, or verification organization, whose qualifications for lawyer, certified public accountant, or professional have been suspended for less than five years for unlawful act or disciplinary offence.

Article 10 A futures exchange shall formulate and perfect all rules according to these Regulations and the provisions of the futures regulatory authority under the State Council, and intensify the control of trading risks and the supervision over and administration of members and its staffs. A futures exchange shall perform the following duties:
1. Providing futures trading floor, facilities and services;
2. Designing futures contracts and arranging the listing of such contracts;
3. Organizing and supervising futures trading, clearing and delivery;
4. Providing centralized performance guarantee for the futures trading;
5. Supervising and managing the members according to the bylaws and trading rules; and
6. Other duties stipulated by the futures regulatory authority under the State Council.
A futures exchange shall not participate in any futures trading directly or indirectly. Without the verification of the futures regulatory authority under the State Council and approval of State Council, a futures exchange shall not conduct any businesses, such as trust investment, stock investment, and investment in real property that is not for self-use, which are unrelated to its duties.

Article 11 A futures exchange shall establish and improve the following risk management systems according to relevant provisions of the state:
1. A security deposit system;
2. A daily debt-free clearing system;
3. A limit up and down system;
4. A position limits and large position reporting system;
5. A risk reserve system; and
6. Other risk management systems stipulated by the futures regulatory authority under the State Council.
A futures exchange that implements the member grading clearing system shall formulate and perfect the system of clearing guaranty money.

Article 12 When there are any abnormal conditions on the futures market, a futures exchange may adopt the following emergency measures in accordance with the authority and procedures stipulated in its bylaws, and it shall promptly make a report to the futures regulatory authority under the State Council:
1. To increase the security deposit;
2. To adjust the range of limit up and down system;
3. To limit the maximum positions of members or customers;
4. To temporarily suspend trading; or
5. To adopt other emergency measures.
The abnormal conditions mentioned in the preceding paragraph refer to manipulation of futures trading prices in the course of trading, force majeure, or other circumstances stipulated by the futures regulatory authority under the State Council.
After the abnormal conditions disappear, the futures exchange shall promptly cancel the emergency measures.

Article 13 A futures exchange shall obtain the approval of the futures regulatory authority under the State Council:
1. If it formulates or amends its bylaws or trading rules;
2. If it lists, suspends, cancels or revives a futures trading product;
3. If it handles other matters specified by the futures regulatory authority under the State Council.
To approve the listing of any new futures trading product by a futures exchange, the futures regulatory authority under the State Council shall seek opinions from relevant departments of the State Council.

Article 14 The proceeds of a futures exchange shall be managed and used according to relevant provisions of the state, but it shall be used first for ensuring the operation and improvement of the futures trading floor and facilities.

Chapter III Futures Companies

Article 15 A futures company is a financial institution that is established in accordance with the Company Law of the People's Republic of China and these Regulations and engages in futures businesses. The establishment of a futures company shall be duly registered with the company registration authorities and approved by the futures supervision and administration department of the State Council.
Without the approval of the futures regulatory authority under the State Council, no entity or individual may establish or establish in disguised form any futures company to conduct futures businesses.

Article 16 To establish a futures company, one shall comply with the provisions of the Company Law of the People's Republic of China and shall also:
1. Have a minimum registered capital of CNY30 million;
2. Have director, supervisor, senior executive who meet the appointment criteria, and futures practitioner who have obtained relevant qualifications;
3. Have articles of association stipulated by relevant laws or administrative regulations;
4. Have a major shareholder and actual controller that have sustainable profitability, and good reputation, and have no records of serious violation of laws or administrative regulations in the last three years;
5. Have qualified premises and facilities of business;
6. Have formulated sound risk management and internal control systems; and
7. Meet other conditions as may be stipulated by the futures regulatory authority under the State Council.
The futures regulatory authority under the State Council may increase the minimum amount of the registered capital according to the principle of prudent supervision and risk of a specific business. The registered capital shall be paid-in capital. Each shareholder shall make capital contribution in cash or by any non-monetary property that is necessary for the business operation of the futures company and the ratio of the capital contribution in cash shall not be less than 85%.
The futures regulatory authority under the State Council shall, within six months after accepting the application for establishing a futures company, carry out examination and make a decision on whether to approve the establishment according to the principle of prudent supervision.
Without the approval of the futures regulatory authority under the State Council, no entity or individual may entrust, or be entrusted by, any other person to hold or manage the shares of a futures company.

Article 17 A futures company shall implement the licensing system and the futures regulatory authority under the State Council shall be entitled to issue licenses according to the category of commodity futures and financial futures. A futures company may apply for operating the overseas futures brokerage, futures investment consultation, and other futures businesses as may be specified by the futures regulatory authority under the State Council, in addition to domestic futures brokerage.
Unless as otherwise specified by laws, administrative regulations, or the futures regulatory authority under the State Council, a futures company shall not conduct any activity that is unrelated to futures.
A futures company shall not conduct or conduct in disguised form futures proprietary business.
A futures company shall not provide financing for its shareholder, actual controller, or any other affiliate or guarantee for any person externally.

Article 18 A futures company may be entrusted by a customer to conduct futures brokerage and to conduct futures trading on its own name for the customer, and the trading results must be assumed by the customer.

Article 19 A futures company shall obtain the approval of the futures regulatory authority under the State Council if:
1. It is merged, demerged, closed down, or bankrupt;
2. It alters its business scope;
3. It alters its registered capital and adjusts its shareholding structure;
4. It increases any shareholder holding over 5% of its shares or changes its controlling shareholder; or
5. It is in any other circumstance as may be specified by the futures regulatory authority under the State Council.
With respect to the matters specified in Item 3 or 5 of the preceding Paragraph of the present Article, the futures regulatory authority under the State Council shall, within 20 days after accepting the application, make a decision on whether to approve; with respect to the matters specified in any other Item of the preceding Paragraph of the present Article, the futures regulatory authority under the State Council shall, within two months after accepting the application, make a decision on whether to approve.

Article 20 If a futures company or its branch is in any circumstance specified in Article 70 of the Administrative Licensing Law of the People's Republic of China or below, the futures regulatory authority under the State Council shall cancel its futures business permit:
1. The its business license has been cancelled by the company registration authority according to law;
2. It fails to start business within three months after establishment without any justified reason or suspends it business during any period of three consecutive months without any justified reason after it has started business;
3. It applies for cancellation; or
4. It is in any other circumstance as may be specified by the futures regulatory authority under the State Council.
Before a futures company's futures business permit is cancelled, the futures company shall clear all futures businesses and return the security deposits and other assets to customers. Before the futures business permit of a futures company's branch is cancelled, the branch shall terminate its business activities and properly deal with the assets of customers.

Article 21 A futures company shall establish, perfect, and implement business management rules and risk management systems, abide by information disclosure system, ensure the safety of security deposits of customers, and report the list and trading of major customers to the futures exchange according to the provisions of the futures exchange.

Article 22 Other futures operating organization engaging in futures investment consultation shall comply with the provisions of the futures regulatory authority under the State Council.

Chapter IV Basic Rules of Futures Trading

Article 23 Only the members of a futures exchange may conduct futures trading in the futures exchange.
An overseas organization that meets the required conditions may conduct trading of specific futures products and specific measures for managing such trading shall be formulated by the futures regulatory authority under the State Council.

Article 24 To conduct futures trading for a customer, a futures company shall issue a risk statement in advance to the customer and sign a written contract with the customer after the customer confirms the trading. A futures company shall not conduct futures trading without customer entrustment or conduct trading of any product not entrusted by the customer.
A futures company shall not guarantee profitability for a customer or agree with the customer on sharing the profits or the risks.

Article 25 The following entities or individuals shall not engage in futures trading and no futures company may accept their entrustment to conduct futures trading:
1. State organs or public institutions;
2. Staffs of the futures regulatory authority under the State Council, a futures exchange, a depository of futures security deposit, or a futures industry association;
3. Persons prohibited from accessing to the securities or futures market;
4. Entities or individuals that are unable to produce account opening documentation; and
5. Other entities or individuals that are prohibited by the futures regulatory authority under the State Council from conducting futures trading.

Article 26 A customer may give trading instructions in writing, by telephone, via the internet, or in any other manner as may be specified by the futures regulatory authority under the State Council to the futures company. A customer's trading instructions shall be clear and complete.
A futures company shall not deceive a customer into giving trading instructions by concealing major matters or any other improper means.

Article 27 A futures exchange shall publish in time the trading volume, trading price, position, ceiling price, floor price, opening price, and closing price of listed commodities futures contracts and other information on real-time quotations that shall be published, and it shall ensure that such information is true and accurate. A futures exchange shall not publish information on price predictions.
Without the consent of the futures exchange, no entity or individual may publish the information on real-time quotations or prices of futures trading.

Article 28 The security deposit system shall be implemented in futures trading. The security deposit collected by a futures exchange from any member or by a futures company from its customer shall not be less than the standard stipulated by the futures regulatory authority under the State Council or the futures exchange, and shall be separated from self-owned funds and deposited in a special bank account.
The security deposit collected by a futures exchange from any of its members is owned by that member and shall not be used for any purpose other than trading clearing for that member.
The security deposit collected by a futures exchange from any customer is owned by that customer and shall not be used for any purpose unless transferred as follows:
1. To pay with available funds according to the customer's requirements;
2. To deposit it or pay for commissions or taxes for the customer; or
3. To use it for other purposes specified by the futures regulatory authority under the State Council.

Article 29 A futures company shall open a special account separately for a customer and set trading code for each special account. No trading by a trading code of any other customer may be conducted.

Article 30 Where a futures company conducts futures brokerage while simultaneously conducting other futures businesses, it shall abide by the system of business separation and fund separation. No mixed operation may be conducted.

Article 31 A futures exchange, futures company, and a clearing member that is not a futures company shall withdraw, manage, and use the risk reserves and the risk reserves shall not be used for unauthorized purpose.

Article 32 The charging items, charging standards, and management measures for futures trading shall be formulated and promulgated in a uniform manner by the competent department of the State Council.

Article 33 The clearing of futures trading shall be uniformly organized by the futures exchange.
A futures exchange shall implement a daily debt-free clearing system. The futures trading shall be reported to the member in time on the date when it is cleared.
A futures company shall clear with a customer according to the clearing results of futures trading and notify the customer of the clearing results in the manner that it agrees on with the customer. A customer shall inquire and deal with its position properly in time.

Article 34 When the security deposit of a member of the futures exchange is insufficient, the member shall supplement security deposit or close out the position. Where the member fails to supplement security deposit or close out the position within the period of time specified by the futures exchange, the futures exchange shall carry out forced liquidation of the customer's contract and relevant expenses and losses thus incurred shall be borne by the customer.
When the security deposit of a customer is insufficient, the customer shall supplement security deposit or close out the position. Where the customer fails to supplement security deposit or close out the position within the period of time specified by the futures exchange, the futures exchange shall carry out forced liquidation of the customer's contract and relevant expenses and losses thus incurred shall be borne by the customer.

Article 35 Delivery for futures trading shall be organized uniformly by the futures exchange.
The delivery warehouse shall be designated by the futures exchange. Total volume of physical delivery shall not be limited by the futures exchange. The futures exchange shall conclude an agreement with the delivery warehouse, specifying the rights and obligations of both parties. A delivery warehouse shall not:
1. Issue fraudulent warehouse receipts;
2. Breach the futures exchange's operational rules, or restrict the entry into or exit from the warehouse of delivered commodities;
3. Disclose trade secrets that are related to futures trading;
4. Participate in futures trading in violation of relevant provisions of the state; or
5. Be involved in other acts stipulated by the futures regulatory authority under the State Council.

Article 36 If a member commits a breach in its futures trading, its liability for breach of contract shall first be compensated by its security deposit. If the security deposit is insufficient, the futures exchange shall use its risk reserves and its own funds to assume liability for the member and by so doing the futures exchange shall be entitled to pursue equivalent compensation from the member.
If a customer commits a breach in its futures trading, the futures company shall assume the liability for breach of contract by the customer's security deposit first. If the security deposit is insufficient, the futures company shall use its risk reserves and its own funds to assume liability for the customer and by so doing the futures exchange shall be entitled to pursue equivalent compensation from the customer.

Article 37 A futures exchange implementing the member grading clearing system shall collect clearing guaranty money from clearing members. A futures exchange may settle security deposit with and collect security deposit from the clearing members only, may assume the liability for breach of contract by the clearing guaranty money, risk reserves, and its own funds for the clearing members only, and may take relevant measures for the clearing members only. Only a clearing member may settle security deposit with and collect security deposit from the non-clearing members, assume the liability for breach of contract for the non-clearing members, and take other relevant measures for the non-clearing members.

Article 38 A futures exchange, futures company, and a clearing member that is not a futures company shall ensure the integrity and accuracy of the materials of futures trading, clearing, or delivery.

Article 39 No entity or individual may falsify or spread false information on futures trading, or manipulate the trading prices by malicious collusion, joint purchase or selling, or any other means.

Article 40 No entity or individual may unlawfully use credit funds or financial funds for future trading.
A banking financial institution's qualifications for futures trading or guarantee shall be subject to approval of the futures regulatory authority under the State Council.

Article 41 To conduct domestic or overseas futures trading, a state-owned enterprise or state-controlled enterprise shall follow the principle of hedging and abide by the provisions promulgated by the state-owned assets supervision and administration department of the State Council or other relevant departments on access of enterprises' state-owned assets to the futures market.

Article 42 The foreign exchange purchase, foreign exchange settlement, and foreign exchange receipt and disbursement under overseas futures shall comply with relevant provisions of the state on foreign exchange control.
The measures for overseas futures trading to be conducted by a domestic entity or individual shall be formulated by the futures regulatory authority under the State Council jointly with the competent commercial department, state-owned assets supervision and administration department, banking regulatory department, and foreign exchange control department of the State Council and shall be put into force after being approved by the State Council.

Chapter V Futures Industry Association

Article 43 The futures industry association is a self-regulatory organization of futures industry and a corporate social group.
All futures companies and other organizations that are specially engaged in futures operation shall be members of the futures industry association and pay the membership fees.

Article 44 The general meeting of members is the authority of the futures industry association.
The articles of association of the futures industry association shall be formulated by the general meeting of members and submitted to the futures regulatory authority under the State Council for filing.
A futures industry association shall establish a council and the members of the council shall be elected according to the articles of association.

Article 45 A futures industry association shall perform the following duties:
1. To educate and organize the members to abide by laws, administrative regulations, and policies on futures;
2. To formulate self-discipline rules to be abided by the members, supervise and inspect the members' acts, and impose disciplinary sanctions upon the member that violates the articles of association or self-discipline rules;
3. To accredit, manage, and cancel the qualifications of futures practitioners;
4. To accept the costumer's complaints relating to futures business and mediate the disputes between the members or between a member and a customer;
5. To protect lawful rights and interests of the members and present the suggestions and requests of the members to the futures regulatory authority under the State Council;
6. To organize professional training for futures practitioners and carry out business exchange between members;
7. To organize the members to carry out study of the development and operation of the futures industry and relevant contents; and
8. To perform other duties specified by its articles of association.
The activities of the futures industry association shall be under the guidance and supervision of the futures regulatory authority under the State Council.

Chapter VI Supervision and Administration

Article 46 The futures regulatory authority under the State Council shall carry out supervision over and administration of the futures market and legally perform the following duties:
1. To formulate regulations and rules on the supervision over and administration of the futures market and exercise the power of examination and approval according to law;
2. To supervise and administrate the listing, trading, clearing, and delivery of futures products as well as related activities;
3. To supervise and administrate the futures business activities of the participants of futures market such as the futures exchanges, futures companies, other futures operating organizations, clearing members that are not futures companies, organizations monitoring the deposit of futures security deposit, depository banks of futures security deposit, and delivery warehouses;
4. To formulate the standards for accrediting and measures for administrating the qualifications of futures practitioners and supervise the implementation of those standards and measures;
5. To supervise and inspect the disclosure of information on futures trading;
6. To guide and supervise the activities of the futures industry association;
7. To investigate and deal with the acts in violation of the laws or administrative regulations on the supervision over and administration of the futures market;
8. To carry out international exchange and cooperation for the supervision over and administration of the futures market; and
9. To perform other duties specified by relevant laws or administrative regulations.

Article 47 The futures regulatory authority under the State Council shall perform its duties according to law and may adopt the following measures:
1. To carry out on-site inspection over the futures exchanges, futures companies, other futures operating organizations, clearing members that are not futures companies, organizations monitoring the deposit of futures security deposit, and delivery warehouses;
2. To investigate and collect evidences in the place of suspected illegality;
3. To inquire of the parties concerned and the entities and individuals relating to the investigated case, and require them to give explanations for the matters relating to the investigated case;
4. To consult and copy the materials on registration of property right relating to the investigated case;
5. To consult and copy the futures trading records and accounting materials of the parties concerned and the entities and individuals relating to the investigated case as well as other relevant documents and materials, and seal the documents or materials that will be probably transferred, concealed, or destroyed;
6. To check the security deposit accounts and bank accounts of the relevant entities relating to the investigated case;
7. To limit the futures trading of the parties concerned in the invested case during a period of not more than 15 trading days or 30 trading days in a complicated case, when investigating major violation of futures law such as manipulation of futures trading prices and insider trading and upon approval by the person in charge of the futures regulatory authority under the State Council; and
8. To adopt other measures specified by laws or administrative regulations.

Article 48 Futures exchanges, futures companies, other futures operating organizations, and organizations monitoring the deposit of futures security deposit shall submit the financial statements, business materials, and other relevant materials to the futures regulatory authority under the State Council.
The futures regulatory authority under the State Council shall specially designate personnel to review the annual report submitted by a futures company or any other futures operating organization and make a review report. The reviewers shall sign on the review report. In case of any problem found in the review, the futures regulatory authority under the State Council shall take corresponding measures in time.
When necessary, the futures regulatory authority under the State Council may require a clearing member that is not a futures company, delivery warehouse, and the shareholder, actual controller or any other affiliate of a futures company to submit relevant materials.

Article 49 When the futures regulatory authority under the State Council carries out inspection or investigation according to its legal duties, the inspected or investigated entity or individual shall cooperate with it and faithfully provide relevant documents and materials, and shall not refuse, hinder, or conceal facts; other relevant departments and entities shall provide support and coordination.

Article 50 The state may set up futures investor protection fund according to the development needs of the futures market.
The specific measures for collecting, managing, and using the futures investor protection fund shall be formulated by the futures regulatory authority under the State Council jointly with the finance department of the State Council.

Article 51 The futures regulatory authority under the State Council shall establish and perfect the system on monitoring the deposit of the futures security deposit and establish organizations monitoring the deposit of futures security deposit.
Customers, futures exchanges, futures companies, other futures operating organizations, clearing members that are not futures companies, and deposit banks of futures security deposit shall abide by the provisions of the futures regulatory authority under the State Council on monitoring the deposit of futures security deposit.

Article 52 An organization monitoring the deposit of futures security deposit shall monitor the deposit of security deposit in accordance with relevant provisions, check the security deposit daily, and report to the futures regulatory authority under the State Council in time in case of any problem found in the check. The futures regulatory authority under the State Council shall deal with the problem according to circumstances in time in accordance with these Regulations.

Article 53 The futures supervision and administration department of the State Council shall implement a qualification administration system for the directors, supervisors and senior management personnel of the futures exchange and the futures margin security depository and monitoring organization.

Article 54 The futures regulatory authority under the State Council shall formulate the rules on sustainable operation of futures companies, specify the risk regulatory indicators of futures companies, such as the ratio of net capital to net assets, ratio of net capital to scale of domestic futures brokerage or overseas futures brokerage, and ratio of current assets to current liabilities, and raise requirements for the operating conditions, risk management, internal control, deposit of security deposit, and related-party transactions of futures companies and its branches.

Article 55 Where a futures company or its branch fails to comply with the rules on sustainable operation or has operational risks, the futures regulatory authority under the State Council may take regulatory measures such as talk, prompt, and credit recording for the futures company and its director, supervisor, and senior executive, or order the futures company to make rectification within a specified period of time and examine the rectification.
Where the futures company fails to make rectification within the specified period of time and the act of the futures company seriously harms its stable operation or lawful rights and interests of its customers, or the futures company is being investigated by the futures regulatory authority under the State Council for suspected serious illegality, the futures regulatory authority under the State Council may take the following measures according to circumstances:
1. To limit or suspend some futures businesses;
2. To suspend approving new businesses;
3. To limit distribution of dividends or provision of remuneration or benefit for directors, supervisors, or senior executives;
4. To limit property transfer or set other rights on property;
5. To order changing directors, supervisors, senior executives, or persons in charge relevant departments, or limit their rights;
6. To limit the allocation, transfer, or use of self-owned funds or risk reserves of the futures company; or
7. To order the controlling shareholder to transfer shares or limit exercise of shareholder rights by the shareholders concerned.
Where the futures company complies with relevant laws, administrative regulations, and rules on sustainable operation after it makes rectification, the futures regulatory authority under the State Council shall release relevant regulatory measures imposed upon the futures company within three days after it finishes the examination of the rectification.
Where the futures company fails to comply with the rules on sustainable operation after its makes rectification and its normal operation is seriously harmed, the futures regulatory authority under the State Council shall be entitled to cancel a part of or all futures business permits of that futures company and close down the branches of that futures company.

Article 56 Where a futures company unlawfully operates or has material risks, and seriously harms the order of the futures market and the customers' interests, the futures regulatory authority under the State Council may order it to suspend business to meet standards or designate any other organization to manage or take over it. Upon approval by the futures regulatory authority under the State Council, the following measures may be taken against the directly responsible director, supervisor, or senior executive or any other directly responsible person of the futures company by relevant authorities:
1. To notify the relevant exit administration department of stopping him/her from leaving the country;
2. To apply to the competent judicial organ for prohibiting him/her from disposing of his/her property by transferring or assigning the property or by any other means or from setting any rights on his/her property.

Article 57 Where any shareholder of a futures company practices false capital contribution or withdraws capital contribution, the futures regulatory authority under the State Council shall order it/him/her to make rectification within a specified period of time and may order it/him/her to transfer the shares of the futures company held by it/him/her.
Before the shareholder makes rectification or transfers the shares as specified by the preceding paragraph, the futures regulatory authority under the State Council may limit exercise of shareholder rights by it/him/her.

Article 58 In case of abnormal situations on the futures market, the futures regulatory authority under the State Council may take necessary measures to cope with them.

Article 59 The trading software and clearing software of a futures company shall meet the requirements for prudent operation and risk management of the futures company as well as the requirements specified by the futures regulatory authority under the State Council for monitoring deposit of futures security deposit. Where the trading software or clearing software of a futures company does not comply with the aforementioned requirements, the futures regulatory authority under the State Council shall be entitled to order the futures company to improve or change that software.
The futures regulatory authority under the State Council may require the supplier of the trading software or clearing software of a futures company to provide relevant materials of that software and the supplier shall provide them as required. The futures regulatory authority under the State Council is obligated to keep confidential relevant materials provided by the supplier.

Article 60 Where a futures company is involved in a major litigation or arbitration, its shares are frozen or used as guaranty, or there is any other major event, the futures company and its relevant shareholder and actual controller shall submit written reports to the futures regulatory authority under the State Council within five days after the event occurs.

Article 61 When providing relevant services for the market participants such as futures exchanges and futures companies, intermediaries such as accounting firms, law firms, and assets evaluation organizations shall abide by laws, administrative regulations, and other relevant provisions of the state and provide relevant materials as required by the futures regulatory authority under the State Council.

Article 62 The futures regulatory authority under the State Council shall establish the mechanism of information sharing and coordination for the supervision and administration with the relevant departments.
The futures regulatory authority under the State Council shall establish the mechanism of cooperation for the supervision and administration with the futures regulatory authority of other countries and regions to carry out cross-border supervision and administration.

Article 63 The staffs of the futures regulatory authority under the State Council, a futures exchange, an organization monitoring deposit of futures security deposit, or a deposit bank of futures security deposit shall be devoted to their duties, handle affairs according to law, be just and clean-fingered, and keep confidential the state secrets and trade secrets the parties concerned, and shall not gain improper benefits by taking advantage of the position.

Chapter VII Legal Liability

Article 64 A futures company or clearing member that is not a futures company shall be ordered to make rectification, warned, and subject to confiscation of its illegal gains if it:
1. Unlawfully accepts members;
2. Unlawfully collects commissions or fees;
3. Unlawfully uses or distributes proceeds;
4. Fails to publish real-time market quotations or prices as required or publishes price forecasting information;
5. Fails to perform its reporting duties to the futures regulatory authority under the State Council as required;
6. Fails to submit relevant documents or materials to the futures regulatory authority under the State Council as required;
7. Fails to establish or perfect the system of clearing guaranty money as required;
8. Fails to withdraw, manage, or use risk reserves as required;
9. Violates the provisions of the futures regulatory authority under the State Council on monitoring deposit of futures security deposit;
10. Limits total volume of a member's physical delivery;
11. Appoints unqualified futures practitioners; or
12. Has any other act in violation of the provisions of the futures regulatory authority under the State Council.
Where it conducts any of abovementioned acts, the directly responsible person in charge and other directly responsible persons shall be subject to disciplinary sanction and a fine of CNY10,000 to CNY100,000.
Where it conducts any act specified in Item 2, Paragraph 1 of the present Article, the overcharged commissions or fees shall be returned.
Where an organization monitoring deposit of futures security deposit conducts any act specified in Item 5, 6, 9, 11, or 12 , Paragraph 1 of the present Article, it shall be punished in accordance with Paragraphs 1 and 2 of the present Article. Where a deposit bank of futures security deposit conducts any act specified in Item 9 or 12, Paragraph 1 of the present Article, it shall be punished in accordance with Paragraphs 1 and 2 of the present Article.

Article 65 Where a futures exchange conducts any of the following acts, it shall be ordered to make rectification and warned, its illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of its illegal gains shall be imposed upon it concurrently; where there are no illegal gains or the illegal gains are less than CNY100,000, a fine of CNY100,000 to CNY500,000 shall be imposed upon it concurrently; where the case is serious, it shall be ordered to suspend business for rectification:
1. Handling any matters specified in Article 13 hereof without approval;
2. Permitting any member to conduct futures trading when that member does not have sufficient security deposit;
3. Participating in futures trading directly or indirectly or unlawfully conducting any business that is unrelated to its duties;
4. Unlawfully collecting or misappropriating security deposit;
5. Falsifying, obliterating, or unlawfully keeping the materials of futures trading, clearing, or delivery;
6. Failing to establish or implement the daily debt-free clearing system, limit up or down system, position limit system, or large position reporting system;
7. Refusing to accept or obstructing the supervision or inspection of the futures regulatory authority under the State Council; or
8. Any other act specified by the futures regulatory authority under the State Council.
Where it conducts any of abovementioned acts, the directly responsible person in charge and other directly responsible persons shall be subject to disciplinary sanction and a fine of CNY10,000 to CNY100,000.
Where a clearing member that is not a futures company conducts any act specified in Item 2, 4, 5, 6, 7, or 8 , Paragraph 1 of the present Article, it shall be punished in accordance with Paragraphs 1 and 2 of the present Article.
Where an organization monitoring deposit of futures security deposit conducts any act specified in Item 3, 7, or 8 , Paragraph 1 of the present Article, it shall be punished in accordance with Paragraphs 1 and 2 of the present Article.

Article 66 Where a futures company conducts any of the following acts, it shall be ordered to make rectification and warned, its illegal gains shall be confiscated, and a fine that is equal to 100% to 300% of its illegal gains shall be imposed upon it concurrently; where there are no illegal gains or the illegal gains are less than CNY100,000, a fine of CNY100,000 to CNY300,000 shall be imposed upon it concurrently; where the case is serious, it shall be ordered to suspend business for making rectification or its futures business permit shall be suspended.
1. Accepting the entrustment of unqualified entity or individual;
2. Permitting any customer to conduct futures trading when that customer does not have sufficient security deposit;
3. Handling any matters specified in Article 19 hereof without approval;
4. Unlawfully conducting any business that is unrelated to its duties;
5. Conducting or conducting in disguised form proprietary futures trading;
6. Providing financing for its shareholder, actual controller, or any other affiliate or guarantee for any person externally;
7. Violating the provisions of the futures regulatory authority under the State Council on monitoring deposit of futures security deposit;
8. Failing to perform the reporting duties or submit relevant documents or materials to the futures regulatory authority under the State Council;
9. Failing to ensure that its trading software or clearing software meets the requirements for prudent operation or risk management of a futures company or the requirements specified by the futures regulatory authority under the State Council for monitoring deposit of futures security deposit.
10. Failing to withdraw, manage, or use the risk reserve as required;
11. Falsifying, obliterating, or unlawfully keeping the materials of futures trading, clearing, or delivery;
12. Appointing unqualified futures practitioners;
13. Falsifying, altering, leasing, lending, selling, or buying the futures business permit or business license;
14. Conducting a trading by a trading code of any other customer;
15. Refusing to accept or obstructing the supervision or inspection of the futures regulatory authority under the State Council; or
16. Any other act specified by the futures regulatory authority under the State Council.
Where a futures company conducts any of abovementioned acts, the directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY50,000 concurrently; where the case is serious, the qualifications of futures practitioner shall be suspended or cancelled.
Where any operating organization other than a futures company conducts any act specified in Item 8, 12, 13, 15, or 16, Paragraph 1 of the present Article, it shall be punished in accordance with Paragraphs 1 and 2 of the present Article.
Where a shareholder, actual controller, or any other affiliate of a futures company entrusts, or is entrusted by, any other person to hold or manage the shares of the futures company without the approval of the futures regulatory authority under the State Council, refuses to accept the inspection of the futures regulatory authority under the State Council or to perform the reporting duties or submit relevant documents or materials to the futures regulatory authority under the State Council, or the data or materials submitted or provided by that shareholder, actual controller, or affiliate contain false records, misleading statements, or major omissions, that shareholder, actual controller, or affiliate shall be punished in accordance with Paragraphs 1 and 2 of the present Article.

Article 67 Where a futures company conducts any of the following acts of fraud on the customers, it shall be ordered to make rectification and warned, its illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of its illegal gains shall be imposed upon it concurrently; where there are no illegal gains or the illegal gains are less than CNY100,000, a fine of CNY100,000 to CNY500,000 shall be imposed upon it concurrently; where the case is serious, it shall be ordered to suspend business for rectification or its futures business permit shall be suspended:
1. Guaranteeing profitability for customers or failing to issue risk statement to a customer;
2. In the brokerage business, agreeing with a customer on sharing the profits or the risks;
3. Failing to accept customer's entrustment according to relevant provisions or conduct trading of any product not entrusted by the customer;
4. Deceiving a customer into giving trading instructions by concealing major matters or any other improper means;
5. Providing a customer with false trading returns;
6. Failing to transit customer instructions to the futures exchange;
7. Misappropriating security deposit of a customer;
8. Failing to open an account of security deposit with the deposit bank of security deposit in accordance with relevant provisions or unlawfully transferring a customer's security deposit; or
9. Any other act of fraud on the customers specified by the futures regulatory authority under the State Council.
Where a futures company conducts any of abovementioned acts, the directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY100,000 concurrently; where the case is serious, the qualifications of futures practitioner shall be suspended or cancelled.
Where any entity or individual falsifies and spreads false information on futures trading or disturbs the order of the futures market, it/he/she shall be punished in accordance with Paragraphs 1 and 2 of the present Article.

Article 68 Where a futures company, any other futures operating organization, a clearing member that is not a futures company, or a deposit bank of futures security deposit obtains the futures business permit by concealing major facts through providing false application materials or any other deception means, its futures business permit shall be cancelled and its illegal gains shall be confiscated.

Article 69 Where an insider with insider information on futures trading or any person unlawfully obtaining insider information on futures trading conducts futures trading by taking advantage of that insider information or discloses that insider information to any other person for futures trading before that insider information is published, he/she shall be subject to confiscation of illegal gains and a fine that is equal to 100% to 500% of his/her illegal gains concurrently; where there are no illegal gains or the illegal gains are less than CNY100,000, a fine of CNY100,000 to CNY500,000 shall be imposed upon him/her. Where an entity conducts insider trading, the directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY30,000 to 300,000 concurrently.
Where any staff of the futures regulatory authority under the State Council, a futures exchange, or an organization monitoring deposit of security deposit conducts insider trading, he/she shall be subject to a severer punishment.

Article 70 Where any entity or individual manipulates the futures trading price by any of the following means, that entity or individual shall be ordered to make rectification, its/his/her illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of its/his/her illegal gains shall be imposed upon it/him/her concurrently; where there are no illegal gains or the illegal gains are less than CNY200,000, a fine of CNY200,000 to CNYone million shall be imposed upon it/him/her:
1. Purchasing or selling, alone or jointly with others, contracts by taking advantage of funds, position, or information to manipulate the futures trading price;
2. Conducting through intentional collusion futures trading at the pre-arranged time and pre-arranged price in pre-arranged manner to influence the futures trading price or volume;
3. Selling contracts to or purchasing contracts from itself/himself/herself to influence the futures trading price or volume;
4. Forestalling prompt goods to influence the quotations or prices of the futures market; or
5. Any other act of manipulating the futures trading price specified by the futures regulatory authority under the State Council.
Where any entity conducts any of the abovementioned acts, the directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY100,000 concurrently.

Article 71 Where a delivery warehouse conducts any of the acts specified in Paragraph 2 of Article 36 hereof, it shall be ordered to make rectification and warned, its illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of its illegal gains shall be imposed upon it concurrently; where there are no illegal gains or the illegal gains are less than CNY100,000, a fine of CNY100,000 to CNY500,000 shall be imposed upon it concurrently; where the case is serious, the futures exchange concerned shall be ordered to suspend or cancel the qualifications of that delivery warehouse. The directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY100,000 concurrently.

Article 72 Where a state-owned or state-controlled enterprise conducts futures trading in violation of these Regulations or the provisions of the futures regulatory authority under the State Council or any other authority on access of enterprises' state-owned assets to the futures market or any entity or individual conducts futures trading by unlawfully using credit funds or financial funds, it/he/she shall be warned, its/his/her illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of its/his/her illegal gains shall be imposed upon it/him/her concurrently; where there are no illegal gains or its/his/her illegal gains are less than CNY100,000, a fine of CNY100,000 to CNY500,000 shall be imposed upon it/him/her concurrently. The directly responsible person in charge and other directly responsible persons shall be demoted even dismissed.

Article 73 Where a domestic entity or individual unlawfully conducts overseas futures trading, it/he/she shall be ordered to make rectification and warned, its/his/her illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of its/his/her illegal gains shall be imposed upon it/him/her concurrently; where there are no illegal gains or the illegal gains are less than CNY200,000, a fine of CNY200,000 to CNY1 million shall be imposed upon it concurrently; where the case is serious, its/his/her overseas futures trading shall be suspended. The directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY100,000 concurrently.

Article 74 Where a person unlawfully establishes a futures exchange or organizes futures trading in any other manner, local people's government at or above the county level shall ban the organization or futures trading, that person's illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of the illegal gains shall be imposed upon that person concurrently; where there are no illegal gains or the illegal gains are less than CNY200,000, a fine of CNY200,000 to CNY1 million shall be imposed upon that person. The directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY100,000 concurrently.
Where a person unlawfully establishes a futures company or any other futures operating organization or conducts futures trading without approval, the organization or futures trading shall be banned, that person's illegal gains shall be confiscated, and a fine that is equal to 100% to 500% of the illegal gains shall be imposed upon that person concurrently; where there are no illegal gains or the illegal gains are less than CNY200,000, a fine of CNY200,000 to CNY1 million shall be imposed upon that person. The directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY100,000 concurrently.

Article 75 Where the supplier of the trading software or clearing software of a futures company refuses to cooperate with the futures regulatory authority under the State Council in an investigation of the futures regulatory authority under the State Council or fails to provide the futures regulatory authority under the State Council with relevant software materials as required, or the software materials provided by that supplier contain false information or major omissions, that supplier shall be ordered to make rectification and subject to a fine of CNY30,000 to CNY100,000. The directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY10,000 to CNY50,000 concurrently.

Article 76 Where an intermediary such as accounting firm, law firm, and assets evaluation organization fails to practice diligence or perform duties, or any document issued by it contains false records, misleading statements, or major omissions, it shall be ordered to make rectification, its operating income shall be confiscated, its relevant business licenses and permits shall be suspended or cancelled, and it shall be subject to a fine that is equal to 100% to 500% of its operating income concurrently. The directly responsible person in charge and other directly responsible persons shall be warned and subject to a fine of CNY30,000 to CNY100,000 concurrently.

Article 77 Where any entity or individual seriously violates these Regulations, the futures concurrently under the State Council shall list that individual, entity, or directly responsible person of that entity as one of the persons prohibited from accessing to the futures market.

Article 78 Where any staff of the futures regulatory authority under the State Council, a futures exchange, an organization monitoring deposit of futures security deposit, or a deposit bank of futures security deposit discloses state secrets or trade secrets of a member or customer, commits illegalities for personal gains, neglects his/her duties, abuses his/her power, or accepts bribes, he/she shall be subject to administrative or disciplinary sanction.

Article 79 Where any person's violation of these Regulations constitutes crime, that person shall be prosecuted for criminal liability.

Article 80 Unless as otherwise stipulated by these Regulations, any administrative sanction upon the violation of these Regulations shall be determined by the futures regulatory authority under the State Council; where the statutory authority of any other department is involved, the futures regulatory authority under the State Council shall deal with the case jointly with that department; where the power to deal with the violation remains with any other department, the futures regulatory authority under the State Council shall transfer the case to that department.

Chapter VIII Supplementary Provisions

Article 81 In these Regulations, the following terms shall be defined as follows:
1. The term "commodity futures contract" refers to a futures contract that takes agricultural products, industrial products, energy, other commodities, and relevant index products as subject matters.
2. The term "financial futures contract" refers to a futures contract that takes financial products such as negotiable securities, interest rates, and exchange rates and relevant index products as subject matters.
3. The term "security deposit" refers to cash paid or standard warehouse receipt with stable value and good liquidity or negotiable securities such as treasury bond provided by a futures trader for clearing and guaranteeing performance of contract.
4. The term "clearing" refers to settlement and transfer of funds carried out on the basis of the clearing price published by the futures exchange for the trading results of the trading parties.
5. The term "delivery" refers to the process at the time a futures contract reaches maturity whereby the parties to the trade liquidate the matured unclosed contract by transferring the ownership rights to the commodity stated in the futures contract or clearing price difference in cash at the specified clearing price in accordance with the rules and procedures of the futures exchange.
6. The term "close-out" refers to the act whereby a futures trader buys or sells a futures contract equivalent in terms of commodity, quantity and delivery date to one he holds but with the trade going in the opposite direction thereby concluding the futures trading.
7. The term "position" refers to the volume of unclosed contracts held by a futures trader.
8. The term "position limit" refers to the largest position permitted to a futures trader by a futures exchange.
9. The term "standard warehouse receipt" refers to the standardized certificate of taking delivery issued by the delivery warehouse and recognized by the futures exchange.
10. The term "limit up or down" refers to the fluctuation band between the highest price and the lowest price at which futures contracts may trade in one trading day. An offer outside this band shall be deemed void and the transaction is incapable of being concluded.
11. The term "insider information" refers to undisclosed information which may have a significant effect on futures market prices, including policies formulated by the futures regulatory authority under the State Council or other relevant authorities which may have a significant effect on futures trading prices, decisions made by a futures exchange which may have a significant effect on futures trading prices, the funds and trading trends of a futures exchange's members and customers as well as other important information which the futures regulatory authority under the State Council recognizes as having a significant effect on futures trading prices.
12. The term "insider with insider information" refers to person who as a result of his/her administrative position, supervisory position or professional position or an employee or a specialized consultant who, in the course of performing his/her duties, may be in contact with or have access to insider information, including the management personnel in a futures exchange as well as other working personnel who may obtain insider information in the course of their duties, working personnel of the futures regulatory authority under the State Council and other relevant authorities, and other persons specified by the futures regulatory authority under the State Council.

Article 82 The futures regulatory authority under the State Council may approve the establishment of a special futures clearing organization that specially performs the clearing and other duties of the futures exchange and assumes corresponding legal liability.

Article 83 The measures for establishing, acquiring, or holding shares in a futures exchange or for establishing a branch (including representative office) by an overseas organization shall be formulated by the futures regulatory authority under the State Council jointly with the competent commercial department and foreign exchange control department of the State Council and shall put into force after being approved by the State Council.

Article 84 The futures trading at a trading floor, other than a futures exchange, approved by the futures regulatory authority under the State Council shall be conducted in accordance with these Regulations.

Article 85 The trading of commodities or financial products that is not a futures trading shall be regulated by the relevant department of the state and shall not be governed by these Regulations.

Article 86 The Regulations shall come into force as of April 15, 2007. The Interim Administrative Regulations on Futures Trading promulgated by the State Council on June 2, 1999 shall be repealed simultaneously.