shfe officials answered questions about revision of the standard contracts of gold and other futures and the detailed rules on continuous trading-凯发k8娱乐官网入口
updated on:dec 11,2013
date: june 6, 2013
recently, shanghai futures exchange has issued revisions of a series of contracts and rules. in particular, the issue of the revision of the standard contracts of gold, sliver and steel rebar, and the issue of the detailed rules on continuous trading have attracted great attention of the market. the reporter interviewed the relevant officials of shfe specifically on these questions.
question: we have noticed that in this wave of revision, the standard contracts of three products have been revised. can you specify the revised contents?
i. gold futures contract
1. in order to drive up the investors’ enthusiasm for the market while at the same time maintaining the continuity of the prices of gold futures, the minimum price fluctuation has been properly adjusted from 0.01 yuan/gram up to 0.05 yuan/gram.
2. the daily maximum price fluctuation limit is adjusted from±5% to±3%.
3. a pack of continuous trading business is introduced and the provision about “trading hours” is adjusted accordingly.
4. the minimal margin is adjusted from 7% to 4%. the margin ratio above mentioned and in the contract is the minimal standard. in practice, the exchange will adjust the ratio of the price limit and the margin according to the risk situations of the market.
5. the current gold futures contract stipulates that the delivery months are january to december. but in view of the market dealings, the trading volumes are concentrated on the june or december contracts. to improve the designs of the contract so as to satisfy the demands of the market, the exchange will adjust the delivery month stipulation to “the contracts of the last three consecutive months and the bimonthly contracts within the latest 11 months”.
6. delete relevant contents about transaction fees.
ii. sliver futures contract
1. introduce a pack of continuous trading rules, and adjust the provision about “trading hours” in the contract.
2. adjust the provisions about “daily maximum price fluctuation limit” and “minimum trade margin”.
to be consistent with gold futures contract and to reserve leeway for the exchange’s risk management, the limit of daily maximum price fluctuation is adjusted from ±5% to ±3%, and the minimum trade margin ratio is adjusted from 7% to 4%. the margin ratio above mentioned and in the contract is the minimal standard. in practice, the exchange will implement higher ratio of price limit and margin according to the risk situations of the market.
iii. steel rebar futures contract
1. the daily maximum price fluctuation limit is adjusted from±5% to±3%
2. the minimum trade margin ratio is adjusted from 7% to 5%. the margin ratio above mentioned and in the contract is the minimal standard. in practice, the exchange will adjust the ratio of price limit and margin according to the risk situations of the market.
3. in steel rebar futures standard contract appendix of shfe, “the difference in the dates for the steel rebar on each warrant” is adjusted as “shall not exceed 10 days”
at present, the market generally holds that the stipulation of “two successive days” is out of tune with the spot market, and increases the difficulties of the traders in generating warrants and raises the costs of delivery. in view of this, we have conducted market investigation and research and a random sampling of the manufacturers. the investigation randomly took 43 trading samples, and found only 6 samples (14%) with a production date interval of less than 2 days, 21 samples (48.8%) with an interval of 3 to 7 days, 8 samples (18.6%) of 8 to 10 days and 8 samples (18.6%) of more than 10 days. taking the above into consideration, the production date interval is extended to “10 days”, which will propel the positive interaction between the futures market and the spot market, lower the difficulties of small and medium-sized traders in stocking up the goods when registering the warrants, motive the enterprises to actively participate in the futures market and eventually enhance the functions of steel rebar futures in serving the steel industry. meanwhile, as for the product itself, the “10 days” production date interval will not significantly impact the overall quality of a steel rebar warrant, nor will it influence the smooth delivery of steel rebar at present.
4. delete relevant contents about transaction fees.
question: why are the standard contracts of these three products revised? what is the background of the revision?
answer: since the launch of gold and silver futures, the relevant systems have played positive roles in guarding against all kinds of risks at the beginning stage of the market development. the expected goals have been achieved and as a result the market has run smoothly and the functions of the futures have begun to come to play. however, with the rapid development of the gold and silver industries and related spot markets, the existing rules have evinced their limitations and incapacity to accommodate the needs of the market for further development. as a result, the market participants are getting louder and louder in their demand for revision. take the gold futures as an example. when it was launched in january of 2008, the external environment as a whole was rather complicated. although the market had an urgent demand for gold futures, the whole industry had only preliminary knowledge about futures. the people’s bank systems were highly concerned, the gold related enterprises were short of futures personnel, the futures trading systems and risk management capacity of the enterprises were still to be improved and enhanced in practices step by step and the parties concerned were scrupulous about the market risks following the launch of gold futures. in view of this and in order to build up the overall risk resistance capacity of the market participants and to avoid “gold speculation rush”, the exchange acting in the spirit of “high standard and sound beginning” of china securities regulatory commission (csrc) was stringent in the designs of each system in gold futures to ensure steadiness and to control risks.
but in recent years, the market environment has been daily improved, the financial reform has been deepened, the idea of futures has been increasingly popular and the risk control capacity of the market has been strengthened. it is now time to further develop the gold and silver futures market, and to promote the positive operation of the futures market of precious metals. the conditions of further revising and improving the standard contracts of gold and silver have been here.
since the launch of steel rebar futures, the relevant systems have played positive roles in guarding against all kinds of risks at the beginning stage of the market development. the expected goals have been largely achieved and as a result the market has run smoothly and the functions of the futures have begun to come to play. to accommodate the rapid development of the steel industry and the spot market, to drive up the market participant’s initiative in the futures market and to further promote the positive operation of the steel rebar futures market, the exchange has decided to further revise and improve the standard contract of steel rebar futures.
question: the market has been looking forward to the introduction of continuous trading, and now the revision of the standard contracts of gold and silver futures has already prepare preliminarily for the introduction. please inform us of the current progress of the preparation for continuous trading.
answer: the introduction of continuous trading mechanism is one major innovative measure of the exchange in its efforts to enhance the efficiency and functioning of the market. since 2012, under the guidance of the csrc, the exchange has carried out systemic researches on continuous trading mechanism and has done a series of preparation before its launch. the exchange has coordinated relevant departments with the market, stipulated and revised relevant rules on continuous trading, implemented the renovation and modification of the technical systems, and lately has began to test the technical systems. it has built up the internal organizational structures and will carry out market training and promotion step by step according to the plans.
question: what products does the exchange plan for continuous trading? what is the exact trading period?
answer: now the products open to continuous trading in shfe are gold and silver. the exact trading period is from 21:00 to 2:30 of the next day, every monday to friday. continuous trading is closed on the first work day before the official holidays (not including the two-day weekends)
question: can you explain the concept of “participating members” in article 7 of the detailed rules? how many members are currently engaged in continuous trading? is the number of participating members a necessary condition for the exchange to launch continuous trading?
answer: shfe implements a registration system for continuous trading. members need to register with the exchange before participating in continuous trading. the “participating members” mentioned in article 7 of detailed rules of shanghai futures exchange on continuous trading refer to those members who have registered for continuous trading.
at present, shfe has opened the registration for continuous trading to the members. relevant work is now being done.
to guarantee the successful introduction of continuous trading, the exchange is now actively carrying out a series of preparation before its launch. the exchange will launch continuous trading after all preparation has been done and all relevant requirements have been met.
question：is forced liquidation executed in the continuous trading period?
answer: after the introduction of continuous trading, the forced liquidation mechanism is executed according to the existing rules. as continuous trading and the first session of the daytime trading of the next day are regarded as the first session of the next day, the members and clients if needed can on their own initiative execute forced liquidation in continuous trading or in the first session of the daytime trading of the next day. if the members can not executive it within the time limit, the exchange will enforce it. those members, who are forced to close out the positions because their settlement reserves are less than zero, are forbidden to open new positions before reinstating the margin.
question: does the exchange have a time schedule for continuous trading? as a next step, will continuous trading be opened to other products?
answer: at present, shfe has been steadily and successfully carrying on the preparation for the launch and operation of continuous trading. next step, the exchange will conduct simulated trading and emergency drills as well as instruction and training about continuous trading. the exchange will launch continuous trading after all relevant preparation has been properly done.
after the official launching of continuous trading of gold and silver, the exchange will evaluate the market operation and will gradually cover other listed products as the market conditions grow mature.