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In order to further clarify the requirements for supervision over the unusual transactions of the options on soybean meal futures and make the members and investors have a more clear-cut understanding of related rules, on March 24, Dalian Commodity Exchange (DCE) issued the "Interpretations on Issues Related to Supervision of Unusual Transactions of Options on Futures" (the Interpretations for short) on the member service system in a bid to interpret the "Regulatory Standards and Disposal Procedures Related to the 'Measures of Dalian Commodity Exchange for Management of Unusual Transactions (for Trial Implementation)'".
The Interpretations provides the regulatory standards and disposal procedures for the selftrade, frequently placing and cancelling orders, placing and cancelling large-sum orders and violating the position limits for the related accounts under common control of the options on soybean meal futures.
According to the Interpretations, it shall be recognized as the unusual transaction behavior of "repeatedly conducting selfpurchase and selfsale" when a client or non-futures-company member conducts the selftrade on a certain options contract 5 times or above in the single day. Particularly, the transactions among the related accounts under common control will be treated as selftrade. The regulatory standard for frequently placing and cancelling options orders is that a client or non-futures-company member cancels the orders of a certain options contract 500 times or above in a single day. But frequently placing and cancelling orders caused by the market making transactions of options are not regarded as unusual transactions. The regulatory standard for the behavior of placing and cancelling large-sum options orders is that a client or non-futures-company member cancels the orders of a certain options contract 400 times or above in a single day and the volume of the orders in a single cancellation exceeds 80% of the maximum contracts in an order. The regulatory standard for the behavior of violating the options position limits for the related accounts under common control is that the sum of the long positions of all call options and the short positions of the put options and the sum of the long positions of the put options and the short positions of the call options for a certain month options contracts held by a group of related accounts under common control shall not exceed the options position limit respectively. According to the "Notice on Issues Related to Listing and Trading of Options on Soybean Meal Futures" released by DCE on March 17, the position limit for the related accounts under common control is the same as that for a single client, and is 300 contracts in the early period of the listing and trading of the options on soybean meal futures.
In order to ensure the smooth listing and trading of the options on soybean meal futures, DCE will take comparatively strict measures for regulation in the early period.
