Futures Exchanges in China
In accordance with the Administrative Regulations on Futures Trading, the State Council of the People’s Republic of China has so far approved the establishment of four futures exchanges: Dalian Commodity Exchange (DCE), Shanghai Futures Exchange (SHFE), Zhengzhou Commodity Exchange (ZCE), and China Financial Futures Exchange (CFFEX).
Article 6 of the Administrative Regulations on Futures Trading of the People’s Republic of China stipulates that the establishment of a futures exchange shall be subject to the examination and approval of the futures supervision and administration department of the State Council.
Chinese futures exchanges are regulated by the State Council Securities Commission (SCSC) as a monitoring body and the China Securities Regulatory Commission (CSRC) as an implementation body, according to the Notice on Restricting a Blind Development of Futures Markets the State Council issued on Nov. 4, 1993.
Chinese futures exchanges are required by law to enforce futures margin requirements, T+0 no-liability settlement requirement, price limits, position limits, large account position reporting requirement, simultaneous or rolling delivery, and risk reserve requirement.
In China, a futures exchange can take the form of either a membership organization or a corporation. Currently, the DCE, SHFE, and ZCE are taking the form of a membership organization, and the CFFEX is organized as a corporation, whose shares are equally owned by the DCE, SHFE, ZCE, Shanghai Stock Exchange and Shenzhen Stock Exchange. In 2001 three of the Chinese futures exchanges - the SHFE, the DCE and the ZCE - set up online communication.