Measures for Management of Specified Domestic Futures Product Trader Suitability of Dalian
Measures for Management of Specified Domestic Futures Product Trader Suitability of Dalian Commodity Exchange (Draft)
Chapter I General Provisions
Article 1 These Measures are formulated pursuant to the Regulation on the Administration of Futures Trading and other laws and regulations and the business rules of Dalian Commodity Exchange (the "Exchange") for the purposes of guiding the overseas traders (hereinafter, the "Traders"; each, an "Trader") to rationally participate in futures trading of specified domestic futures products, protecting the lawful rights and interests of the Traders and securing the stable, normalized and healthy development of the futures market.
Article 2 An Trader herein shall refer to a legal person or other economic organization legally established out of the territory of the People's Republic of China or a natural person with legal overseas citizenship that engages in futures trading of specified domestic futures products and bears the trading results pursuant to the provisions of the laws and regulations of the People's Republic of China.
Article 3 The futures trading of specified domestic futures products at the Exchange shall be subject to the policy of eligibility of the Traders. Any futures company Member or overseas broker (Account-opening Institution) shall, subject to these Measures, assess the Traders' knowledge levels and risk tolerance capability of futures and choose the eligible Traders to prudently participate in futures trading of specified domestic futures products.
Article 4 The Traders shall, based on the requirements of eligibility policy, fully assess their own economic strengths, market and product recognition capabilities, risk control and tolerance capability, and prudently decide whether to participate in futures trading of specified domestic futures products.
Chapter II Standards of Eligibility Management
Article 5 When an Account-opening Institution applies for opening a trading code of the Exchange for the individual Traders that participate in futures trading of specified domestic futures products, the individual Traders shall satisfy the following standards:
(1) The futures-related business personnel have basic knowledge of futures and understand the business rules of the Exchange related to the specified domestic futures products;
(2) The daily after-settlement available balance of the funds in the margins account for the five (5) trading days immediately preceding application for the trading code shall be no less than CNY one hundred thousand (100,000) or equivalent foreign currency;;
(3) It has, during the last three (3) years, the domestic futures trading records, or the futures trading records at an overseas futures trading venue which is under regulation by the futures regulatory institution of the country (region) which has entered into a Memorandum of Understanding of Regulatory Cooperation with the CSRC;
(4) Having the policies related to the internal control and risk management of participation in futures trading; and having the perfect information reporting policy, including providing, and timely updating, to the account-opening agency the information in connection with the persons in charge of the division which is responsible for the futures trading and the related business persons;
(5) Having no significant dishonest records or such circumstances under which the prohibited futures market access may be declared by the competent regulatory agency against it;
(6) Having no circumstances under which the engagement in the futures trading is prohibited or limited by laws, administrative regulations or department rules or the business rules of the Exchange; and
(7) Other conditions prescribed by the Exchange.
The (1), (2) and (3) eligibility assessment may not be carried out toward a special institutional client who apply for opening a trading code or trading access unless laws, administrative regulations, regulations and CSRC have special provisions.
Article 6 When an Account-opening Institution applies for opening a trading code of the Exchange for the entity Traders that participate in futures trading of specified domestic futures products, the entity Traders shall satisfy the following standards:
(1) Having full civil conduct capacity;
(2) Having basic knowledge of futures and understanding the business rules of the Exchange related to the specified domestic futures products and passing the related tests;
(3) The daily after-settlement available balance of the funds in the margins account for the five (5) trading days immediately preceding application for the trading code shall be no less than CNY one hundred thousand (100,000) or equivalent foreign currency;
(4) It has, during the last three (3) years, the domestic futures trading records, or the futures trading records at an overseas futures trading venue which is under regulation by the futures regulatory institution of the country (region) which has entered into a Memorandum of Understanding of Regulatory Cooperation with the CSRC;
(5) Having no significant dishonest records or such circumstances under which the prohibited futures market access may be declared by the competent regulatory agency against it;
(6) Having no circumstances under which the engagement in the futures trading is prohibited or limited by laws, administrative regulations or rules or the business rules of the Exchange; and
(7) Other conditions prescribed by the Exchange.
Article 7 The Exchange may adjust the trader’s suitability standard on the basis of the market situation.
Chapter III Implementation of Eligibility Management
Article 8 The Account-opening Institution shall formulate, subject to the applicable provisions of the CSRC and the requirements under these Measures, the specific standards and business flows for the suitability management in connection with the futures traders of specified domestic futures products, and the supporting measures for implementing the trader’s suitability policy, and carry out the comprehensive assessment over the client’s assets, acknowledge levels, trading history and risk tolerance capacity.
Article 9 The Account-opening Institutions shall set up and effectively implement the client development accountability policy to provide for the liabilities of the relevant personnel.
Article 10 The Account-opening institutions shall fully reveal the futures trading risks to the Traders, inform the necessary futures laws and regulations, the business rules of specified domestic futures products of the Exchange and the relevant provisions and decisions of the Exchange, strictly verify the Traders' funds, prudently assess the Traders' risk tolerance capabilities and examine the Traders' account-opening application materials.
Article 11 The client’s basic futures trading knowledge test should meet the following requirements:
(1) The client should take the knowledge test approved by the Exchange and the test score should be below the score standards published by the Exchange;
(2) The individual client and the order placing personnel designated by corporate client should take the test and shall not be replaced by others;
(3) The client relationship personnel of the account-opening institution may be a supervisor of the knowledge test.
The Account-opening Institutions shall tutor the new account-opening Traders, urge the Traders to comply with the laws, administrative regulations, department rules, and the business rules and relevant provisions and decisions of the Exchange, related to the futures trading, continuously carry out risk education toward the Traders and strengthen the lawful and compliance management of the Traders' trading.
Article 12 The Account-opening Institutions shall set up, and strictly keep confidential, the Traders' data archives.
Article 13 The Account-opening Institutions shall provide the Traders with reasonable complaint channels and inform the complaint methods and procedures.
Article 14 The Traders shall honestly provide the relevant account-opening materials for the Account-opening Institutions which handle the account-opening formalities and shall not evade the Traders' eligibility requirements through false declaration or other means.
Article 15 The Traders shall comply with the principle of "being responsible for purchase and sale" and bear the performance liability with respect to the futures trading and shall not refuse assumption of the futures trading performance liability for the reason of no compliance with the Traders' eligibility standards.
Article 16 The traders shall safeguard their lawful rights and interests through proper methods. When safeguarding their lawful rights or interests, the traders shall comply with the applicable provisions of the laws and regulations, and shall not damage any lawful rights or interests of the state, society or any collective or individual or disturb the public order or the working order of the Exchange or the relevant entities.
Article 17 A futures company Member, which has an entrustment agreement with an overseas broker, shall set up the business connection rules and practically implement the relevant requirements related to the Investors' suitability policy.
Article 18 In case the futures company Member entrusts a company of the intermediary business introduction qualification to assist in handling the formalities of application for the trading code, it shall set up the business connection rules with such company, practically implement the requirements related to the trader’s suitability policy, and re-check the relevant business of such company.
Chapter IV Supervision over Eligibility Management
Article 19 Upon the Exchange's inspection of the practical implementation by the Account-opening Institutions of the Investors' suitability policy, the Account-opening Institutions shall cooperate, honestly provide, and not conceal, hinder or refuse, the materials of the Client’s trading code application.
Article 20 Any violation of any provision of these Measures shall be handled by the Exchange subject to the applicable provisions of the Measures of Dalian Commodity Exchange for Handling of Violations.
Chapter V Supplementary Provisions
Article 21 These Measures shall be interpreted by the Exchange.
Article 22 These Measures shall enter into force as of the date of promulgation.