On February 22, the China Futures Association released and implemented the “Management Rules for Derivative Trading Business of Futures Risk Management Companies” and the supporting document “Risk Disclosure Statement for Derivative Trading Business (Reference Template)” on the 21st. The “Rules” consist of ten chapters and sixty-three articles, covering general provisions, trader suitability management, trading management, subject matter management, performance guarantee management, internal management, code of conduct, information reporting, self-discipline management, and supplementary provisions, as well as the attachment “Explanation on Margin Management of Derivative Trading Business”. In the chapter on transaction management, standardized requirements have been made for the entire process of derivative trading, including contract design, concentration management, valuation mechanism, inquiry and quotation management, transaction confirmation, information bookkeeping, and hedging management. In order to prevent futures risk management companies from engaging in derivative trading with natural persons in a disguised manner, the nominal principal of a single transaction of non standardized equity options shall not be less than RMB 1 million, and transactions with financial institutions that have been approved or authorized to engage in derivative trading business in accordance with the law are not subject to this restriction.
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