On December 24, 2020, China Financial Futures Exchange (CFFEX) releases the Measures of China Financial Futures Exchange on Risk Control (the “Measures”). The Measures refines and perfects the definition of extraordinary situation in the course of futures trading and relevant emergency actions can be taken by the Exchange. The Measures will take effect on December 25, 2020.
The amendments are mainly to provide rule-based support for settlement risk segregation of futures market. Under the overall leadership of China Securities Regulatory Commission (CSRC) and taking into account of various market opinions, CFFEX has comprehensively studied and sorted the emergency actions can be taken by the Exchange when settlement, delivery, exercise, assignment and other business cannot be normally carried out due to extraordinary situations, and it has refined and perfected relevant provisions on emergency actions in mitigating risks. In the case of force majeure events or IT system failure, the Exchange will support its members in current day settlement and next day normal trading by taking emergency actions, releasing emergency clearing data, among others, which can effectively prevent the spread of settlement risk in futures market. The implementation of the Measures will provide more comprehensive support for settlement risk segregation of futures market, which is conducive to the rapid resolution of extraordinary situations, such as IT system failure, and to the safeguard of the normal and orderly market operation.
Guided by the spirit of the fifth Plenary Session of the 19th CPC Central Committee, CFFEX will follow the fundamental principle of firmly guarding against systemic risks, steadily promote the segregation of trading and settlement in the futures market, effectively prevent and mitigate market risks, to enhance the steady and healthy development of the financial futures market.
