(Adopted at the 18th Executive Meeting of the State Council on May 25, 1999, promulgated by Decree No. 267 of the State Council of the People's Republic of China on June 2, 1999, and effective as of September 1, 1999 )
Chapter I General Provisions
Article 1 These Regulations are formulated in order to regulate the conduct of trading in futures, enhance the supervision and administration of futures trading, maintain order in the futures market, prevent and minimize risks, and protect the legitimate rights and interests of the parties trading in fixtures and the public interests of society.
Article 2 The conduct of any trading in futures and its related activities shall comply with these Regulations.
Article 3 In conducting futures trading activities, the principles of openness, fairness, impartiality, honesty and good faith shall be observed. Illegal behaviors such as fraud, insider dealing and the manipulation of trading prices of
futures are prohibited.
Article 4 Trading in fixtures must be conducted on a futures exchange. Any dealing in futures outside of a fixtures exchange is prohibited.
Article 5 The China Securities Regulatory Commission ( hereinafter referred to as the " CSRC " ) shall exercise unified and centralized supervision and administration of the fixtures market.
Chapter II Futures Exchanges
Article 6 The establishment of a futures exchange shall be subject to examination and approval by the CSRC.
No unit or individual may establish or establish in a disguised form a futures exchange without obtaining the approval of the CSRC.
Article 7 A futures exchange shall not be established for the purpose of profit and shall be self?regulated in accordance with its articles of association. A futures exchange shall use all of its assets to bear its civil liabilities.
Article 8 Members of a futures exchange shall be enterprise legal persons registered in the People's Republic of China. The acquisition of the qualification as a member of a futures exchange requires the approval of the futures exchange and the payment of a membership fee.
The membership of a futures exchange shall be made up of those members which are futures brokerage firms and those members which are not futures brokerage firms.
Article 9 A futures exchange shall establish a board of directors. The chairman and vice?chairman of the board of directors shall be nominated by the CSRC and elected by the board of directors.
A futures exchange shall have a general manager and a deputy general manager who shall be appointed and removed by the CSRC. The general manager shall be the legal representative of the fixtures exchange.
Article 10 Persons who fall within the categories specified in Article 101 of the Securities Law, or whose circumstances are such that they fall within those specified by the CSRC, shall not be eligible for the positions in the senior management of a futures exchange or as its financial accounting staff.
Article 11 Personnel of a futures exchange shall fitithfirlly perform their duties, shall not in any way trade in fixtures on their own account and shall not disclose inside infomaation or use inside information to obtain illegal benefits.
Article 12 In the performance of their duties, personnel of a futures exchange shall recuse themselves whenever encountering circumstances of material relevance to themselves or their relatives.
Article 13 Personnel of a futures exchange shall not, during their term in office or within one year after leaving employment with the fuaires exchange, hold a:n? post in any member unit of that futures exchange.
Civil servants shall not hold any post in a fixtures exchange.
Article 14 A fixtures exchange shall carry out the following functions:
(1) provide premises, facilities and services needed for trading in futures;
(2) work out the form of futures contracts and introduce futures contracts to the market;
(3) organize and supervise futures trading, settlement of accounts and clearing;
(4) ensure the performance of futures contracts;
(5) establish and implement the risk management systems required under Article 35 of these Regulations; and
(6) carry out such other functions as may be prescribed by the CSRC.
Article 15 A futures exchange shall not engage in trust investment, securities trading, investment in real property not for its own use or other business unrelated to its fimctions.
A futures exchange is prohibited from directly or indirectly participating in futures trading.
Arlide 16 In the event of an abnormality arising in the futures market, a futures exchange may decide to adopt the following emergency measures within the limits of its powers and according to the procedures as stipulated in its articles of association, and shall immediately report thereon to the CSRC:
(1) increase margin accounts;
(2) adjust the range between die price parameters for suspending trades of futures;
(3) restrict the maximum hold position volume of members or clients;
(4) suspend trading; and
(5) take other emergency measures.
The abnormality as referred to in the preceding paragraph means any behavior which is found in the trading to manipulate the market and seriously distort the price quotations, or any sudden force majeure event, or any other circumstances prescribed by the CSRC.
Immediately after such abnormality disappears, the fixtures exchange shall promptly terminate the emergency measures taken.
Article 17 In any of the following circumstances, a futures exchange shall require the approval of the CSRC:
(1) where it adopts or amends its articles of association or its business rules;
(2) where it commences, suspends, discontinues or resumes a variety of futures trading;
(3) where it introduces, amends or terminates a fixtures contract; or
(4) any other circumstances prescribed by the CSRC.
Article 18 Income gained by a futures exchange shall be managed and used in accordance with relevant provisions of the State and shall not be distributed to its members or diverted to any other purposes.
After the deduction of the public welfare fiend in accordance with relevant provisions of the State, the amount of after?tax profits of a futures exchange shall be transferred in fiill to the accumulation fiend and used to make up losses to be incurred in the following years.
Article 19 The merger or split of a futures exchange shall be subject to examination and approval by the CSRC.
Article 20 In any of the following circumstances, a fixtures exchange shall be dissolved:
(1) where the operating period stipulated in its articles of association expires and a general meeting of its members decides not to extend it;
(2) where a general meeting of its members decides to dissolve the fixtures exchange; or
(3) where the CSRC decides to close the futures exchange.
The dissolution of a futures exchange under the circumstances set out in subparagraphs (1) or (2) of the preceding paragraph shall be subject to examination and approval by the CSRC.
Chapter III Futures Brokerage Firms
Article 21 The establishment of a futures brokerage firm shall comply with the provisions of the Company Law and satisfy the following requirements:
(1) its minimum registered capital shall be 30 million yuan;
(2) its principal managerial and professional staff must hold the qualifications required to conduct futures trading;
(3) it shall possess fixed business premises and qualified trading facilities;
(4) it shall have a sound management system; and
(5) it shall comply with other requirements prescribed by the CSRC
Article 22 The establishment of a futures brokerage firm shall be subject to approval by the CSRC, and it shall obtain a licence issued by the CSRC to conduct futures brokerage business and then register with the State Administration for Industry and Commerce.
Without approval of the CSRC, any unit or individual may not engage in a futures brokerage business and may not use "futures brokerage", "futures agent" or any other similar words in its or his name.
Article 23 A futures brokerage firm may establish an operating department as a branch office where required for its business. The establishment of an operating department shall satisfy the requirements stipulated by the CSRC and be subject to the approval of the CSRC, and it shall obtain an operating licence issued by the CSRC and register with the State Administration for Industry and Commerce.
The operating department shall develop its business within the scope of authorization by the fixtures brokerage firm and in accordance with the law, and its civil liabilities shall be home by the fixtures brokerage firm.
Article 24 A fixtures brokerage firm accepting the authorization of its clients shall conduct futures trading for its clients under its name, and the consequences of the trading shall be assumed by its clients.
Article 25 A futures brokerage firm shall not carry out any businesses other than those authorized by its clients in buying and selling quoted futures contracts on the futures exchange, settling accounts, cleaving and providing other related business services.
A futures brokerage firm may not engage in or in a disguised form engage in fixtures trading on its own account.
Article 26 A futures brokerage firm which falls under any of the following circumstances shall obtain the approval of the CSRC and apply for a change in its registration with the State Administration for Industry and Commerce:
(1) where it changes its legal representative;
(2) where it alters its registered capital;
(3) where it changes its shareholders or its share?holding structure;
(4) where it changes its residence or business premises;
(5) where it alters or closes its operating department; or
(6) in any other circumstances stipulated by the CSRC.
Article 27 A futures brokerage firm which is dissolved in any of the following circumstances shall settle its authorized businesses and return to its clients any margin in accordance with the law:
(1) where its operating period expires and a meeting of its shareholders decides not to extend its operation;
(2) where a meeting of its shareholders decides on its dissolution;
(3) where dissolution becomes necessary because of a merger or split;
(4) where it is bankrupt; or
(5) where the CSRC decides to close it.
Dissolution of a futures brokerage firm due to the circumstances set out in subparagraph (1) , ( 2 ) or ( 3 ) of the preceding paragraph shall be subject to examination and approval by the CSRC.
On its dissolution, a futures brokerage firm shall cancel its registration with the State Administration for Industry and Commerce.
Chapter IV Basic Rules for Futures Trading
Article 28 The parties conducting futures trading on a futures exchange must be members of the futures exchange. Members which are futures brokerage firms may only engage in futures brokerage business as authorized by their clients, while members which are not futures brokerage firms may only trade in futures on their own account.
A futures exchange member shall appoint a listing representative to enter the futures exchange and carry out trading in fixtures. The listing representative may only take trading instructions from his own member unit and shall refi~ain from taking trading instructions from any other units or individuals, or providing them advice, or trading in futures on his own account.
Article 29 A futures brokerage firm accepting authorization from a client to trade in fixtures on his account shall provide the client in advance with a written risk disclosure statement, and after the client has signed his confirmation, sign a written contract with the client.
A futures brokerage firm shall not guarantee profits to its clients or agree on profit?sharing or risk?sharing with its clients, nor shall it accept from companies, enterprises or other economic organizations any authorization given in the name of an individual to trade in fixtures, nor shall it re?authorize its authorized business or accept any re?authorized business.
Article 30 The following traits and individuals are not allowed to trade in futures, and any fixtures brokerage firm may not accept their authorization to trade in futures on their behalf:
(1) financial institutions, government?sponsored institutions and State organs;
(2) personnel of the CSRC;
(3) persons banned from entry into the firttues market;
(4) units failing to furnish documents certifying that they have opened an account; and
(5) other amts or individuals not allowed to trade in futures as prescribed by CSRC.
Article 31 A client may give trading instructions to its fivtures brokerage firm in writing, by telephone or by using any other methods prescribed by the CSRC.
Trading instructions given by a client shall be clear and complete.
Article 32 A futures brokerage firm shall trade in futures for a client pursuant to the client's trading instructions. A futures brokerage firm shall not trade in fixtures without a client's authorization or trade beyond the scope of authorization received from the client.
Article 33 The futures market quotations provided by a fizturcs brokerage firm to its clients shall be truthful and accurate, and shall not withhold any material information or otherwise use improper means so as to induce its clients into giving trading instmctions.
Article 34 A futures exchange shall promptly announce details concerning the futures contracts of the marketed varieties, including their volume of trades, completion price, hold position volume, highest and lowest prices, opening and closing prices, and any other information which should be announced, and ensure that the information announced is truthful and accurate. A futures exchange shall not release information on price forecasts.
Article 35 A fixtures exchange shall establish and improve the following risk management systems in accordance with the relevant provisions of the State.
(1) a system of margin accounts;
(2) a daily settlement system;
(3) a system of price parameters for suspending trades;
(4) a system of position limits and a system for reporting the hold position volumes of major pit traders;
(5) a risk reserve system; and
(6) other risk management systems prescribed by the CSRC.
Article 36 Futures trading shall strictly follow a system of margin accounts. Margins collected by a fixtures exchange from its members, or by a futures brokerage firm from its clients, shall be not less than the standard amount prescribed by the CSRC, be separated from its own funds and be deposited in separate accounts.
The margins collected by a futures exchange from its members belong to the members; the fixtures exchange is strictly prohibited from using the margins for any purposes other than to settle the members' trading accounts.
The margins collected by a futures brokerage firm from its clients belong to the clients; the futures brokerage firm is strictly prohibited from using the margins for any purposes other than to deposit margins with a firtures exchange and to setr trading accounts on behalf of its clients as prescribed by the CSRC.
A futures brokerage firm shall open a separate account and set up a separate trading code for each of its clients and may not mix up the codes in its futures trading.
Article 37 Futures exchanges and futures brokerage firms shall collect, manage and use their risk reserves in accordance with the stipulations of the CSRC and the Ministry of Finance, and may not divert them to other uses.
Article 38 Trading fees collected by a futures exchange from its members , or by a fixtures brokerage firm from its clients, shall be governed by the unified stipulations of the relevant departments of the State Council.
Article 39 Trading in futures shall be carried out by centralized bidding and the conclusion of each transaction shall be matched according to the principle of price priority and time priority.
Article 40 Settlement of futures trading shall all be organized by futures exchange.
Futures exchanges shall practice the system of daily settlement. A futures exchange shall inform its members of the settlement results promptly after the close of the market each day.
A futures brokerage firm shall settle its clients' accounts on the basis of the settlement results received from the futures exchange, and shall promptly inform its clients of their settlement results.
Article 41 Whenever the margin collected from a futures exchange member is not sufficient, the member shall provide supplementary fiends. If the member fails to supplement its margin within the time limit prescribed uniformly by the futures exchange, the futures exchange shall forcibly close out the member's futures contract, and any expenses or losses caused by the forced closing out shall be borne by the member.
Whenever the margin collected from a client is not sufficient, and the client u unable, within the time limit stipulated unifomaly by the futures brokerage firm, ao supplement his margin, the fixtures brokerage firm shall forcibly close out d:at client's futures contract, and any expenses or losses caused by the forced closing out shall be home by the client.
Article 42 The clearing of futures transactions shall all be organized by futures exchanges. Futures exchanges shall not impose restrictions on the total volume of goods cleared.
The warehouse for clearing shall be designated by a futures exchange, The futures exchange shall sign an agreement with the clearing warehouse to specify their respective rights and obligations.
Article 43 A clearing warehouse shall not commit any of the following acts:
(1) issue false warehouse certificates;
(2) violate the business rules of the futures exchange by imposing restrictions on the delivery of goods into or out of tire warehouse;
(3) disclose business secrets relating to futures trading;
(4) participate in futures trading; or
(5) other acts prescribed by the CSRC.
Article 44 Where a member breaches a contract in futures trading, that member's margin shall first be used to bear the liabilities for the breach of contract; if the margin is not sufficient, the futures exchange shall use its risk reserve and its own funds to bear the liabilities on that member's account, and be thereby entitled to chaim repayment afterwards from the member in question.
Where a client breaches a contract in futures trading, the futures brokerage firm shall deal with the case by reference to the preceding paragraph.
Article 45 Futures exchanges and futures brokerage fimas shall ensure the completion and safekeeping of all records relating to futures trading, settlement and clearing.
Article 46 Any unit or individual may not fabricate or spread rumors relating to trading in futures, nor collaborate with ill intentions, trade in collusion or use any other method to manipulate the trading prices of futures.
Article 47 No unit or individual may use credit funds or financial funds to trade in futures.
No financial institutions may finance futures trading or offer its guarantee.
Article 48 State-owned enterprises and enterprises in which State-owned assets have a controlling or dominant position shall, when trading in futures, confine themselves to the hedging business and shall abide by the following provisions:
(1) the varieties in their futures trading shall be limited to the products they manufacture or transact in or to the raw materials they need in production;
(2) the total volume of their trading in futures proportionate to the total volume of their spot trade in the same period; and
(3) other provisions as prescribed by the CSRC.
The enterprises engaging in the hedging business as mentioned in the preceding paragraph shall submit to a futures exchange or a futures brokerage firm a document signed by its legal representative, which shall be subject to examination and approval by the futures exchange or futures brokerage firm in accordance with the provisions under the preceding paragraph.
Article 49 Without approval, no unit or individual may. Directly or indirectly, conduct overseas trading in futures. Where there is a genuine need to conduct hedging in overseas futures markets, the case shall be examined by the CSRC jointly with relevant departments of the State Council, and shall be submitted to the State Council for approval and then a licence for overseas futures trading shall be issued.
Futures brokerage firms are prohibited from conducing any overseas trading in futures.
Chapter V Supervision and adminiatration
Article 50 Futures exchandes and futures brokerage firms shall regularly submit their financial and accounting statements, related documents and audit reports to the CSRC.
Article 51 The CSRC may, at any time, inspect the business and financial atatus of a futures exchange or a futures brokerage firm, has thr right to require a futures exchange or a futures brikerage firm to provide relevant information or documents in relation to its member(s) or to its client(s); and, whenever necessary, it may inspect the business and finanacial status related to futures trading of a member or of a client.
Where the CSRC discovers during its inspection any suspicion of illegal conduct, it may pick up or seal up relevant documents and data, and shall, within a prescribed time limit, make a timely decision on the treatment of the case.
When carrying out an inspection, the personnel of the CSRC shall produce their lawful credentials.
Article 52 The CSRC has the right to investigate and make inquiries of any unit or individual suspected of illegal conduct in futures trading, may take inquiries in relation to the institutional deposit account opened by a futures exchange, futures brokerage firm, member or client at commercial banks or other financial insyiyutions, and, where there is evidence to support indications that a transfer or concealment of illegal funds has taken place, may apply to the judicial organ to freezen the funds. The elevant units or individuals shall provide support and cooperation therefor.
Article 53 The CSRC may, in the event of any abnormality in the futures matket, take necessary measures for the disposition of the risk.
Article 54 The CSRC shall implement a system of qualification determination for the senior managing personnel of futures exchanges and futures brikerage firms and other personnel engaged in the futures business.
Article 55 Futures exchanges shall, in accordance with these Regulations and stipulations of the CSRC, adopt and perfect various rules and regulations to enhance risk control over the dealings on futures exchanges and supervision and control over members and personnel of futures exchanges.
Futures brokerage firms shall adopt and perfect internal business management rules to enhance the examination of the creditworthiness of their clients and, in compliance with the stipulations of the futures exchange, shall report the names and trading status of their major pit traders to the futures exchange.
Article 56 When the general manager of a futures exchange is to leave office, the futures exchange shall engage an intermediary agency qualified for an audit of related business, to conduct an exit audit. When the CSRC deems it necessary, it may designate an intermediary agency to conduct the exit audit.
Chapter VI Penalty Provisions
Article 57 Any futures exchange which commits any of the following acts shall be ordered to make amends, given a warning and have its illegal gains confiscated:
(1) admit a member in violation of stipulations;
(2) collect trading fees in violation of stipulations;
(3) use or distribute income in violation of stipulations;
(4) fail to publish information as stipulated;
(5) fail to fulfil its duty to report to the CSRC as stipulated;
(6) fail to submit relevant documents or data to the CSRC as stipulated;
(7) fail to collect, manage or use risk reserves as stipulated;
(8) impose restrictions on the total volume of goods cleared by its members;
(9) employ persons unqualified for the fixtures business; or
(10) commit any other acts contravening the stipulations of the CSRC.
Where a futures exchange commits any of the acts specified in the preceding paragraph, the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions and a fine of not less than 10 , 000 yuan but not more than 100 , 000 yuan may be concurrently imposed.
Any futures exchange which commits the act set out in subparagraph ( 2 ) of the first paragraph in this Article shall be ordered to return the trading fees overcharged.
Article 58 Any futures exchange which commits any of the following acts shall be ordered to make amends, given a warning and have its illegal gains confiscated, and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 100, 000 yuan, a fine of not less than 100 , 000 yuan but not more than 500 , 000 yuan shall be imposed; where the circumstances are serious, suspension of business for rectification shall be ordered:
(1) adopt or revise its articles of association or business rules without approval;
(2) quote, suspend, cancel or resume trading in varieties of futures without approval;
(3) quote, revise or terminate a futures contract without approval;
(4) allow a member to conduct futures trading under the circumstances where its margin is not sufficient;
(5) directly or indirectly participate in future trading, or conduct any business having no connection with its functions;
(6) collect margins or divert margins to other uses in violation of stipulation;
(7) falsify, alter or tail to preserve in accordance with the stipulations documents relating to futures trading, settlement or clearing;
(8) fail to establish or implement systems of price parameters for suspendingtrading in futures, position limits and reporting hold position volumes of major pit traders;
(9) reject or obstruct supervision or inspection by the CSRC; or
(10) commit any other acts contravening the stipulations of the CSRC.
Where a fixtures exchange commits any of the acts specified in the preceding paragraph, the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions and a fine of not less than 10,000 yuan but not more than 100,000 yuan shall be concurrently imposed.
Article 59 Any futures brokerage firm which commits any of the following acts shall be ordered to make amends, given a warning and have its illegal gains confiscated, and a fine of not less than one time but not more than three times die illegal gains shall be concurrently imposed; where there arc no illegal gains or the amount of the illegal gains does not exceed 100 , 000 yuan, a fine of not less than 100, 000 yuan but not more than 300, 000 yuan shall be imposed; where the circumstances are serious, suspension of business for rectification shall be ordered
its licence to conduct fixtures brokerage business shall he revoked:
(1) accept authorization from units or individuals that do not meet stipulated conditions;
(2) accept authorization from a company, an enterprise or other economic organizations to trade in futures in the name of an individual;
(3) re?authorize its authorized business or accept any re?authonzecl business;
(4) allow a client to trade in futures under the circumstances where its margin is not sufficient;
(5) conduct futures triding on its own account or other business contrary to the provisions of these Regulations;
(6) fail to submit relevant documents and material to the CSRC as stipulated;
(7) fail to collect, manage or use risk reserves as stipulated;
(8) falsify, alter or fail to preserve in accordance with the stipulations documents relating to futures trading, settlement or clearing;
(9) employ persons unqualified for the futures business;
(10) establish an operating department without approval;
(11) undertake procedures for a change without approval;
(12) forge, alter, rent, lend or buy and sell futures brokerage business licences or operating licences;
(13) trade by mixing up codes in violation of the stipulations;
(14) refirse or obstruct supervision or inspection by the CSRC; or
(15) commit any other acts contravening the stipulations of the CSRC.
Where a fixtures brokerage firm commits any of the acts specified in the preceding paragraph, the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions and a fine of not less than 10, 000 yuan but not more than 50 , 000 yuan shall be concurrently imposed.
Article 60 Any futures brokerage firm which commits any of the following acts defrauding its clients shall be ordered to make amends, given a warning and have its illegal gains confiscated, and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 100,000 yuan, a fine of not less than 100 , 000 yuan but not more than 500 , 000 yuan shall be imposed; where the circumstances are serious, suspension of business for rectification shall be ordered or its licence to conduct futures brokerage business shall be revoked:
(1) fail to provide a risk disclosure statement to a client as stipulated, guarantee profits to a client or agree upon profit?sharing or risk?sharing with a client;
(2) trade in fixtures without a client's authorization or trade beyond the scope of authorization received firm the client;
(3) provide false infomaation or quotations on the futures market or use other inappropriate means to induce its clients into giving trading instructions;
(4) provide false information to a client on the completion of a transaction;
(5) fail to convey its client's trading instructions to the futures exchange;
(6) divert its client's margin to other uses; or
(7) commit any other acts defrauding its clients as specified by the CSRC.
Where a fixtures brokerage firm commits any of the acts specified in the preceding paragraph, the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions and a fine of not less than 10,000 yuan but not more than 100,000 yuan shall be concurrently imposed; where a crime has been constituted, criminal liability shall be pursued according to law.
Where any unit or individual fabricates and disseminates false information influencing trading in futures, thus disrupting the fixtures trading market, penalties shall be imposed by reference to the provisions in the first and second paragraphs of this Article; where a crime has been constituted, criminal liability shall be pursued according to law.
Article 61 Where any insider who possesses inside infomnation about futures trading or any person who has illegally acquired inside information on futures trading, before the announcement to the public of the information having a major influence on fixtures trading prices, makes use of such inside information to trade in futures or discloses such inside information to any other person enabling the person to make use of inside information in fixtures trading, the illegal gains shall be confiscated and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 100,000 yuan, a fine of not less than 100,000 yuan but not more than 500,000 yuan shall be imposed; where a crime has been constituted, criminal liability shall be pursued according to law.
Article 62 Any unit or individual that commits any of the following acts manipulating fixtures trading prices shall be ordered to make amends and have its illegal gains confiscated, and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 200,000 yuan, a fine of not less than 200,000 yuan but not more than 1,000,000 yuan shall be imposed; where a crime has been constituted, criminal liability shall be pursued according to law:
(1) individually or in collusion, concentrate an advantage in funds or in hold position volumes, or take advantage of a superior position as to information, to buy and sell futures contracts jointly or successively so as to manipulate fixtures trading a prices;
(2) deliberately collude with another party to transact mutually in futures at a time, at a price and in a method agreed upon in advance so as to influence the futures trading prices or the fixtures trading volume;
(3) use oneself as the trading party and gngage in purchases and sales to oneself so as to influence the futures trading prices or the futures trading volume;
(4) hoard goods in order to influence futures market prices; or
(5) commit any other acts manipulating fixtures trading prices as stipulated by the CSRC.
Where a unit commits any of the acts specified in the preceding paragraph, the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions and a fine of not less than 10 , 000 yuan but not more than 100,000 yuan shall be concurrently imposed.
Article 63 Any clearing warehouse that commits any of the acts stipulated in Article 43 of these Regulations shall be ordered to make amends, given a warning and have its illegal gains confiscated, and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 100 , 000 yuan, a fine of not less than 100 , 000 yuan but not more than 500 , 000 yuan shall be imposed; where the circumstances are serious, the futures exchange shall be ordered
to suspend or cancel the qualification of the clearing warehouse; the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions.
Article 64 Where any State?owned enterprise or enterprise in which State owned assets have a controlling interest or a dominant position trades in fixtures in violation of the provisions of these Regulations, or where any unit or individual uses credit fiends or financial fiends to trade in futures, a warning shall be given, its illegal gains shall be confiscated and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 100,000 yuan, a fine
of not less than 100,000 yuan but not more than 500,000 yuan shall be imposed; the person directly in charge and other persons directly responsible shall be subject to disciplinary sanctions from demotion up to dismissal; where a crime has been constituted, criminal liability shall be pursued according to law.
Article 65 Any unit or individual that engages in overseas fixtures trading without approval in violation of the provisions of these Regulations shall be banned and have its illegal gains confiscated, and a fine of not less than one time but not more than five times the illegal gains shall be concurrently imposed; where there are no illegal gains or the amount of the illegal gains does not exceed 200,000 yuan, a fine of not less than 200,000 yuan but not more than 1,000,000 yuan shall be imposed; the person directly in charge and other persons directly responsible shall be fined not less than 10,000 yuan but not more than 100,000 yuan and be subject to disciplinary sanctions from demotion up to dismissal; where a crime has been constituted, criminal liability shall be pursued according to law.
Any unit or individual that illegally establishes or establishes in a disguised form, a futures exchange or a futures brokerage firm , or carries out futures brokerage business without approval shall be banned and subject to the penalties as stipulated in the preceding paragraph; where a crime has been constituted, criminal liability shall be pursued according to law.
Article 66 Any personnel of a futures exchange who, during his term of office or within one year of leaving the futures exchange, takes on employ with a member unit of that fixtures exchange, or who discloses any State secret business secrets of members or clients that he knows, shall be subject to disciplinary sanctions; where a crime has been constituted, criminal liability shall be pursued according to law.
Article 67 Where any unit or individual violates the provisions of these Regulations, and if the circumstances are serious, the CSRC shall declare that individual, that unit or thr person directly in charge of that unit as a person banned from entry into the futures.
Article 68 Where any personnel of the CSRC divulges any State secrets or business secrets of members or clients that he knows, or commits illegalities by fraudulent means or for his personal gain, neglects his duties, abuses his official powers or accepts bribes, if a crime has been constituted, his criminal liability shall be pursued according to law; if no crime has been constituted, administrative sanctions shall be imposed according to law.
Article 69 The administrative penalties imposed upon futures exchanges or their members, futures brokerage firms or their clients, persons engaged in the futures business or clearing warehouses shall be decided by the CSRC; the administrative penalties imposed upon other units or individuals shall be decided by relevant departments in accordance with their statutory powers.
Chapter VII Supplementary Provisions Article 70 The meanings of the following terms used for the purpose of these Regulations: (1) "Futures trading" means the trading activities of centralized buying and selling of a certain variety of futures contracts on a futures exchange. (2) "Futures contract" means a standardized contract that is unifomlly drawn up by a futures exchange to stipulate the delivery, at a specific firture time and a specific place, of a fixed quantity of products of a specified quality. (3) "Margin" means the funds paid by a futures trader, in accordance with the prescribed standards, used for settlement and as security for the performance of contracts. (4) "Settlement" means the settlement of financial accounts to show the profit and loss status of the two parties to a trade based on the settlement price announced by the futures exchange. (5) "Clearing" means the procedure by which, on the maturity of a futures contract, the two trading parties settle the contract having not yet closed out on the maturity by transferring the title in the goods stipulated in the futures contract in accordance with the rules and procedures of the futures exchange. (6) "Closing out position" means the activity by which a futures trader purchases or sells a futures contract containing the same variety, quantity and month of delivery as those of the fixtures contract he has held, but is opposite in the direction of trading, in order to close out futures trading.( (7) "Hold position volume" means the volume of open contracts held by a futures trader. (8) "Position limit" means the maximum of the hold position volume of a futures trader stipulated by a futures exchange. (9) "Warehouse certificate" means a standardized delivery certificate issued by a clearing warehouse and approved by a futures exchange. (10) "Matching the conclusion of a transaction" means the procedure by which the computer trading system of a futures exchange matches trading instructions of the two trading parties. (11) "Price parameters for suspending trades" means that the trading price of a futures contract may not be higher or lower than the stipulated range on a certain trading day, and a quoted price which is outside that range shall be regarded as invalid and the transaction cannot be completed. (12) "Inside information" means information which has not been made public and might have a major influence on futures market prices, including policies formulated by the CSRC and other related departments which might have a major influence on futures trading prices, decisions made by a futures exchange which might have a major influence on fixtures trading prices, details of the financial status and trading trends of members or clients of a futures exchange, and other important information which the CSRC deems has a notable impact on futures trading prices. (13) "Insiders who possess inside information" refers to persons who, by virtue of their management position, supervisory role or profession, or who, through their duties as an employee or professional consultant, have access to or obtain inside information, including the chairman and vice?chairman of the board of directors, the general manager and deputy general manager, and other senior managing personnel of a fixtures exchange , other employees who , by virtue of their posts, can obtain inside information, personnel of the CSRC, personnel of other related departments and other persons stipulated by the CSRC. Ariticle 71 These Regulations shall come into force as of September 1, 1999.
