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In order to adapt to the market's development needs, the DCE, in accordance with the unified plan of the China Securities Regulatory Commission, has drafted a revised version of its Exchange Regulations and Trading Regulations. Yesterday, the exchange published the draft revision for public comments. The deadline for feedback is June 10th.
Some of the noteworthy changes to the trading rules include Article VI, which was revised from "The term 'futures contract' means a standardized contract designed by the exchange calling for the delivery of a specified quantity and quality of a commodity at a specified date and location" to "The term 'futures contract' means a standardized contract designed by the exchange calling for the delivery of a specified quantity of the underlying asset at a specified date and location".
Article XI of the Trading Rules was also revised from "The term 'last trading day' means the final day in which trading of a given futures contract may occur in the delivery month" to "The term 'last trading day' means the final day in which trading of a given futures contract may occur according to the contract specifications". Article XIII was changed from "The currency used for price quote and settlement of a futures contract is RMB. The price unit is Yuan " to "Futures contracts are dominated in RMB, or whichever currency is indicated in the contract specifications." The phrase "or other exchange-specified methods" was added to Article LV.
The DCE explained that the primary reason behind the aforementioned changes is to allow further development of the market, futures products and margins' setting methods. The change also take into account the situation where the last trading day of a contract might occur outside of the delivery month.
Under the Delivery section of the Trading Rules, Article XCIII was amended to "Physical delivery may take place at the specified delivery warehouse or other exchange-specified location". Allowing delivery at other exchange-specified locations apart from the specified delivery warehouse will allow more room for innovation in delivery methods.
The DCE is currently working to promote the coke futures market, and at the same time it is also stepping up research on commodity index futures and options products. These revisions to the regulations and trading rules are primarily to welcome preparations for further development and innovation in the market.
At this year's NPC, president of the DCE Liu Xingqiang suggested speeding up the marketization of commodities, promoting the listing of commodity indices and options, and utilizing the futures market to service national economic development. Mr. Liu also proposed adopting certain measures to attract more organizations to participate in the development of agriculture, chemical, energy, livestock and other industry commodity indexes as well as comprehensive commodity index.
