In order to be close to the market, enable the futures market to better serve the real economy, upon discussion and approval from the Council and report to CSRC, we have reformulated the Measures on Administration of Hedging at Dalian Commodity Exchange (hereinafter referred to as New Measures on Hedging or NMH). We hereby inform you about the time for implementation and other relevant matters as follows:
I. The NMH is to come into effect from October 8, 2012, and the former Measures on Administration of Hedging at Dalian Commodity Exchange and the Measures on Administration of Coke Hedging at Dalian Commodity Exchange will be both annulled.
II. After clearing on October 8, 2012, all approved hedge lines of corn, RBD Palm Olein and Soybean oil will be converted into increase in general monthly hedge line.
III. As per NMH, traders not being members or clients of any futures companies may establish hedge positions within their speculative position lines at their discretion. But they shall submit a written application to DCE, specifying the members for their hedge positions and relevant hedge lines ahead of the completion of DCE technical system improvement. Upon the completion of the DCE’s technical system improvement, non-members or clients of any futures companies may also establish their positions by themselves without application. After the system being put into service, DCE will issue a further notice.
IV. As per the NMH, during trading hours, if traders not being members or clients of any futures companies are found to have established hedge position or speculative position totaling over the standards prescribed by us because of their opening that day, DCE will ban trading or opening of the over-positioned contracts and restore their rights for opening of a position after clearing.
After clearing, if their hedge positions and speculative positions sum up to more than the prescribed standard, they must liquidate their positions by themselves in the first session of the next trading day. If they do not liquidate or do not conform to prescribed standard upon liquidation, DCE will ban trading or opening of the oversized contract and restore their trading rights after clearing, except that they cannot liquidate their oversized contracts in the first session of the trading day because of daily limits, abnormal situations or force majeure.
When traders not being members or clients of any futures companies have a total of hedging position and speculative position exceeding prescribed amount for two consecutive trading days or more, DCE will ban their opening and trading of oversized contract for 3 consecutive trading days from the next trading day. In case of gross violation, they shall be dealt with as per provisions prescribed in DCE’s Measures on Treatment of Illegal Trading.