Futures and Derivatives Law of the People's Republic of China
(Adopted at the 34th Meeting of the Standing Committee of the 13th National People's Congress on April 20, 2022)
Third Translation （Revise）
Content
Chapter I General Provisions Chapter II Futures Trading and Derivatives Trading Chapter III Futures Settlement and Delivery Chapter IV Futures Traders Chapter V Futures Business Organizations Chapter VI Futures Trading Venues Chapter VII Futures Settlement Organizations Chapter VIII Futures Services Organizations Chapter IX Futures Industry Association Chapter X Supervision and Administration Chapter XI Cross-border Transactions and Regulatory Collaboration Chapter XII Legal Liability Chapter XIII Supplementary Provisions
Chapter I General Provisions Article 1 This Law is formulated for the purpose of regulating futures trading and derivatives trading, protecting the legitimate rights and interests of all parties, maintaining market order and social and public interests, promoting futures markets and derivatives markets to serve the national economy, preventing and defusing financial risks and safeguarding national economic security. Article 2 This Law shall apply to futures trading, derivatives trading and related activities within the Territory of the People's Republic of China. Where a futures trading, a derivatives trading or a related activity outside the Territory of the People's Republic of China disrupt the market order within the territory of the People's Republic of China and damage the legitimate rights and interests of domestic traders, it shall be dealt with and pursued for legal responsibility in accordance with the relevant provisions of this Law. Article 3 The term "futures trading" as used in this Law refers to trading activities in which futures contracts or standardized options contracts are traded as the subject matter. The term "derivative trading" as mentioned in this Law refers to trading activities other than futures trading that take swap contracts, forward contracts and non-standardized option contracts and their combinations as the trading objects. The term "futures contract" as used in this Law refers to a standardized contract uniformly formulated by a futures trading venue, which stipulates that a specified quantity of a certian underlying interest shall be delivered at a specific time and place in the future. The term "option contract" as used in this Law means a standardized or non-standardized contract whereby the buyer has the right to buy or sell the agreed underlying interest (including futures contracts) at a specified price at a certain time in the future. The term "swap contract" as used in this Law refers to a financial contract in which a specified underlying interest is exchanged at a specified time in the future. Forward contracts referred to in this Law refer to financial contracts other than futures contracts that agree to deliver a specified quantity of a underlying interest at a specified time and place in the future. Article 4 The State shall support the healthy development of futures markets and promote their functions of price discovery, risk managing and resource allocations. The State shall encourage hedging and other risk management activities in futures markets and derivatives markets. The State shall encourage hedging and other risk management activities in futures markets and derivatives markets. The state shall take measures to promote development of futures markets and derivatives markets for agricultural products to guide the production and operation of the domestic agricultural products. The term "hedging" as used in this Law refers to the activities of a trader who, for the purpose of managing risks arising from changes in the value of his or her assets or liabilities, enters into futures trading or derivatives trading basically consistent with his or her underlying interests or liabilities. Article 5 Futures markets and derivatives markets shall establish and perfect systems and mechanisms for the monitoring, control, resolution and disposal of risks, restrict excessive speculation in accordance with the law, and guard against systemic risks in the market. Article 6 Futures trading and derivatives trading activities shall be regulated by the laws, the administrative regulations and the relevant State regulations, follow the principles of openness, fairness and impartiality, and the acts of fraud, market manipulations and insider tradings shall be prohibited. Article 7 All the parties involved in futures trading and derivatives trading shall have equal legal status and shall abide by the principles of voluntariness, compensation and good faith. Article 8 The futures regulatory authority under the State Council shall, in accordance with law, exercise centralized and unified supervision and administration over the futures market nation-wide. Where The State Council has other regulations set forth for supervision and administration against interest rate and exchange rate futures, such regulations shall apply. The futures regulatory authority under the State Council or a departments authorized by The State Council shall, according to their respective functions and duties, exercise supervision and control over the derivatives markets. Article 9 Futures and derivatives industry associations shall exercise self-regulation according to law. Article 10 The State audit authority shall supervise through auditing against futures business organizations, futures trading venues, futures settlement organizations and futures regulatory authority under the State Council according to law.
Chapter II Futures Trading and Derivatives Trading Section 1 General Provisions Article 11 Futures trading shall only be permitted at the lawfully established futures exchanges or at the trading places legally approved by the futures regulatory authority under the State Council to organize and engage in futures trading. (Hereafter these futures exchanges and the futures trading places shall be called the futures trading venues（FTV）). All the futures trading shall be open and centralized, or conducted in accordance to other trading methods approved by the futures regulatory authority under the State Council. Futures trading outside the futures trading venues shall be prohibited. Derivatives transactions may be conducted by mutual agreement between buyer and seller or other transaction methods prescribed by The State Council. Article 12 No entity or individual shall be allowed to manipulate futures market or derivative market. It is prohibited to manipulate futures markets by any of the following means to affect or intend to affect futures trading prices or futures trading volumes: (1) buying and selling contracts jointly or continuously taken advantage of pooling capitals and holding positions or using information, independently or jointly with others; (2) colluding with another person to trade futures contracts between each other at a predetermined time, price and manner; (3) trading futures between accounts under its actual control; (4) using false or uncertain material information to induce traders to engage in futures trading; (5) not for the real trading purposes, frequently reporting or reporting large amount of trading and canceling them afterwords （in order to manipulate trading results）; (6) making public evaluations, forecasts or investment suggestions on the relevant futures contracts or the underlying spot commodities to carry out the reverse or related operations; (7) hoarding spot goods in order to influence the futures market; (8) in the delivery month or close to the delivery month, using improper means to evade the position limit, forming a position advantage; (9) manipulating the futures markets through its activities in the relevant market; (10) other means of manipulating futures markets. Article 13. Before the insider information becomes public, the persons who have obtained insider information shall not engage in trading relevant futures and/or derivatives contracts, nor instruct or imply any others to trade relevant futures and/or derivatives contracts, nor disclose obtained insider information to others. Article 14 "Inside information" as used in this Law refers to unpublicized information that may have a major impact on the prices of futures trading or derivatives trading. Inside information on futures trading includes: (1) policies, information or data that are being formulated or have not yet been released by the futures regulatory authorities under the State Council or other relevant departments, which may have major impacts on futures prices; (2) decisions made by futures trading venues and futures settlement organizations that may have a major impact on futures trading prices; (3) financial status or trading trends of the members and traders of futures trading venues; (4) significantly abnormal trading information in the relevant market; (5) other information that has a major impact on the futures price as stipulated by the futures regulatory authority under the State Council. Article 15 An insider who has inside information in this Law refers to any unit or individual who has access to or obtained inside information because of his or her operational, managerial, supervisory or post position. Insiders of futures trading include: (1) relevant personnel of futures trading institutions, futures trading venues, futures settlement organizations and futures services organizations; (2) staff members of the futures regulatory authority of the State Council and other relevant departments; (3) other units and individuals who is capable of obtain inside information as specified by the futures regulatory authority under the State Council. Article 16 No unit or individual is allowed to fabricate or spread false or misleading information to disturb normal operations of the futures market or derivatives markets. Administrators and employees of the futures brokerage firms, futures exchanges and futures clearing institutions, futures services organizations; administrators and employees of the entities which organize and operate trading places for derivatives; administrators and employees of the futures and derivatives industry associations, the regulatory bodies under the State Council and the departments authorized by the State council, are prohibited to make false statements or provide misleading information during the futures and derivatives trading and related activities. Information on futures markets and derivatives markets disseminated by various media shall be truthful and objective，misleading of such information shall not be allowed. The media and their staff engaged in reporting futures market and derivatives market information shall not engage in futures trading and derivatives trading or related activities that conflict with their job responsibilities. Section 2 Futures Trading Article 17 The listing of futures contracts and standardized options contracts shall conform to the provisions of the futures regulatory authority under the State Council, and shall be reported to the futures trading venues for registration with the futures regulatory authority under the State Council according to law. Suspension, resumption or termination of listing of futures contract types and standardized options contract types shall conform to the provisions of the futures regulatory authorities under the State Council, be decided by the futures trading venues and filed with the futures regulatory authorities under the State Council. Listed futures contract and standardized options contract varieties should have economic values, shall not be easily to be manipulated and conform to the public interests. Article 18 The real-name account system shall be adopted in futures trading. A trader wishes to engaged in futures trading shall apply for opening an account with his or her own name by holding a legal certificate certifying his identity. No unit or individual may, in violation of regulations, lend its own futures account or borrow another's futures account to engage in futures trading. Article 19 Only the members of the futures trading venues or other participants approved by the Futures Regulatory Authority under the State Council shall be allowed to trade futures at the futures trading venues. Article 20 Where an investor entrusts a futures brokerage institution to conduct trading, trading instructions may be given in writing, by telephone, self-service terminals, or through the Internet. Trading orders shall be clear, specific and comprehensive. Article 21 Where a programmed trading is carried out by automatically generating or issuing trading orders through computer programs, it shall conform to the provisions of the futures regulatory authority under the State Council and shall be reported to a futures trading venues. The programmed trading shall not affect the system security or normal trading order of the futures trading venues. Article 22 The margin system shall be adopted in futures trading. A futures settlement organization shall collect the margin from the settlement participants, and the settlement participants shall collect the margin from the traders. Futures margin is used for settlement and to ensure the performance of a contract. Accepted margin includes cash, highly liquid securities such as Treasury bonds, stocks, fund shares and standard warehouse receipts, as well as other assets stipulated by the futures regulatory authorities under the State Council. If securities are used as margin, such security may be pledge or guaranteed by other means according to law. The forms and proportion of the margin collected by futures settlement organizations and settlement participants shall conform to the provisions of the futures regulatory authority under the State Council. Where trader trades a standardized options contract, the seller shall pay margin and the buyer shall pay premium. The term "premium" as mentioned in the preceding paragraph refers to the funds paid by the buyer for the purchase of a standardized options contract. Article 23 a position limit system shall be implemented in futures trading to prevent risks of excessive concentration of contract positions. Those engaged in risk management activities such as hedging may apply for exemption of positions limits. Measures for the administration of position limits and hedging shall be formulated by the futures regulatory authority under the State Council. Article 24 Futures trading shall implement the reporting management system for actual control relations of traders. A trader shall, in accordance with the provisions of the futures regulatory authority under the State Council, report the actual control relationship to a futures trading institution or futures trading venue. Article 25 Fees for futures transactions shall be reasonable, fee items, fee standards and administrative measures shall be made public. Article 26 the trading results of a transaction conducted in accordance with the business rules formulated by a futures trading venue according to law shall not altered except otherwise stipulated by the paragraph 2 of Article 89 of this Law. Article 27 The members and traders of a futures trading venue shall, in accordance with the provisions of the futures regulatory authority under the State Council, report the important matters related to trading, positions held and margin. Article 28 No unit or individual may use credit funds or government funds to conduct futures trading in violation of regulations. Article 29 Futures trading institutions, futures trading venues, futures settlement organizations, futures Service organizations and their employees shall timely report to the futures regulatory authority under the State Council any prohibited trading acts discovered. Section 3 Derivatives Transactions Article 30 The venues established according to law may organize and carry out derivatives transactions upon examination and approval by the departments authorized by the State Council or the futures regulatory authorities under the State Council. The trading rules formulated by the venues which organize derivatives trading shall fairly protect the legitimate rights and interests of all the parties involved in the trading and prevent market risks, shall be submitted to the department authorized by the State Council or the futures regulatory authorities under the State Council for approval. Article 31 When a financial institution intents to conduct derivatives trading business, it shall obtain approval or approval or authorization in accordance with the law, fulfill the obligations of proper management of the traders and comply with provisions by the State for its supervision and administration. Article 32 Where the main agreement is adopted in derivative transactions, the main agreement, all supplementary agreements under the Main Agreement and the agreements made by the two parties in respect of specific transactions shall constitute a complete and single agreement between the two parties and shall be legally binding. Article 33 The templetes for the Master Agreement and other contracts stipulated in the Article 32 of this Law shall be submitted for records in accordance with the provisions of the department authorized by the State Council or the futures regulatory authorities under the State Council. Article 34 To secure the performance of derivatives transactions, means of pledges in accordance with law may be provided. Article 35 Where a derivative transaction is conducted in the form of a Master Agreement in accordance with the law, the transaction may be terminated in accordance with the provisions of the agreement and all profits and losses under the agreement shall be settled on a net basis in case of any agreed circumstances. Net-clearing settlement conducted in accordance with the provisions of the preceding paragraph shall not be suspended, invalid or canceled due to either party in the transaction enters into bankruptcy proceedings according to law. Article 36 The department authorized by the State Council and the futures regulatory authority under the State Council shall establish a market database on derivatives transactions, collect, preserve, analyze and manage information on the subject matter, trading scale and counterparty of the derivatives transactions in a centralized manner, and timely disclose relevant information to the market in accordance with regulations. Specific rules shall be formulated by the department authorized by The State Council and the futures regulatory authority under the State Council. Article 37 Where derivatives transactions are settled centrally by a department authorized by the State Council or a settlement organization approved by the futures regulatory authority of the State Council as a central counterparty, netting settlement to be terminated according to law. Settlement assets shall be used first for settlement and delivery and shall not be sealed up, frozen, distrained or enforced. Prior to the completion of settlement and delivery, no one may use it. The centralized settlement conducted according to law shall not be suspended, invalid or canceled because either party to the settlement enters into bankruptcy proceedings according to law. Article 38 Specific measures for the regulation, supervision and administration of derivatives trading and related activities shall be formulated by The State Council in accordance with the principles of this Law.
Chapter III Futures clearing and delivery Article 39 Futures trading shall implement the daily mark-to-market system. Within the time specified by the futures trading venue, a futures settlement organization（FSO）shall settle the trades held by the settlement participants according to the settlement price on the same day. The settlement participants shall settle the futures trader’s accounts according to the settlement results issued by the futures settlement organizations. The settlement results shall be timely notified to the settlement participants and the traders on the same day. Article 40 The margin and premium, etc. collected by a futures settlement organization or a settlement participant shall be separated from its own assets and and deposited in the special accounts at the futures margin depository organization（FMDO）in accordance with the provisions of the futures regulatory authority under the State Council, and shall be managed separately. Misappropriation of the margin or premium is illegal and prohibited. Article 41 Where the margin of a settlement participant does not meet the standards prescribed in the business rules of the futures settlement organization, the futures settlement organization shall notify the settlement participant to increase the margin or liquidate the position within a specified time according to the business rules. If a settlement participant fails to increase margin or liquidate the position voluntarily within the specified time, the futures settlement organization shall notify the futures trading venue to forcibly liquidate the position. If the margin of the trader does not meet the agreed standards between the settlement participants and the trader, the settlement participants shall notify the trader to increase the margin within the agreed time or liquidate the position voluntarily. If a trader fails to increase margin or liquidate his or her position within the agreed time, he or her position shall be forcibly liquidated according to the agreement. Where a futures settlement organization or a settlement participant forcibly liquidate the position of a trader in accordance with the provisions of the preceding two paragraphs with securities or other securities as the margin, it may process the securities etc., collected as margin accordingly. Article 42 Where a settlement participant defaults in the settlement process, a futures settlement organization shall, in accordance with business rules, use the margin and the settlement guarantee fund（SGF）of the settlement participant, as well as the risk reserve fund（RRF）and its own funds to complete the settlement process. Where a futures settlement organization completes settlement process with its risk reserves fund and its own funds, it may have the right to recourse against the settlement participant according to law. If a trader breaches a contract in the settlement process, the settlement participant entrusted by the trader shall use the margin of the trader, the risk reserve fund of the settlement participant and its own funds to complete the settlement process in accordance with the contract. Where a settlement participant completes the settlement process with its risk reserve fund and its own funds, it may have the right to recourse against such trader according to law. The term "settlement guarantee fund"（SGF）as mentioned in this Law refers to the funds paid by the settlement participant to the futures settlement organization in order to guarantee the contract performance. Article 43 The assets such as margin, premium, settlement guarantee fund and risk reserve fund collected and/or withdrawn by a futures settlement organization in accordance with its business rules shall have priority used in the process of settlement and delivery, and shall not be sealed up, frozen, withheld or enforced by someone else（any unit or person）. Prior to the completion of settlement and delivery process, no one may use the margin colllected to guarantee performance of the contract and delivery，nor the deliverable property which is entered into the delivery process. Settlement and delivery conducted according to law shall not be suspended, invalidated or canceled because either party involved in settlement process enters bankruptcy proceedings according to law. Article 44 When a futures contract expires, the trader shall close his or her open position at maturity through physical delivery or cash settlement. At the time specified in the standardized option contract, the buyer of the contract has the right to buy or sell the subject matter at the agreed price or settle the cash difference according to the agreed price, and the seller of the contract shall perform the corresponding obligations according to the agreed contract terms. The exercise of standardized option contracts shall be organized by futures settlement organization. Article 45 Where a futures contract takes physical delivery, the futures settlement organization shall be responsible for organizing the delivery of payments for goods, standard warehouse receipts, or other certificates of titlement of the subject matters of the contracts. If a futures contract is settled in cash, the futures settlement organization shall, on the basis of the settlement price, settle the profits and losses of the two parties holding the futures contract. The standard warehouse receipt（SWR） in this Law refers to the standardized Pick-up-the-goods Credentials（PGC）issued by the delivery warehouse and registered at the futures trading venues. Article 46 Physical delivery of futures trading shall be carried out at the delivery warehouses, delivery ports designated by a futures trading venue，or at the other places that meet the requirements of a futures trading venue. Physical delivery may not limit the total amount of delivery. Where physical delivery is made by means of documents other than the standard warehouse receipt or by other means, the futures trading venue shall clearly specify the rights and obligations of the delivery parties. Article 47 Where a settlement participant breaches the contract during delivery, a futures settlement organization shall have the right to dispose of the settlement participant's standard warehouse receipt and other certificates of titlement of the subject matters of the contracts. If a trader defaults in the delivery process, the settlement participant shall have the right to dispose of the trader's standard warehouse receipt and other certificates of titlement of the subject matters of the contracts. Article 48 A futures business organization（FBO）that does not meet the requirements of a settlement participant may entrust a settlement participant to settle accounts on behalf of its clients. The rights and obligations relationship between futures business organization, settlement participants and traders that do not meet the requirements of settlement participants shall be governed by reference to the provisions of this Chapter on rights and obligations between settlement participants and traders.
Chapter IV Futures Traders Article 49 The futures trader refers to any natural person, legal person or non-legal entities engaged in futures trading pursuant to this Law and responsible for the trading results. Unless otherwise provided for by the futures regulatory authority of the State Council, the futures trader shall entrust a futures business organization to conduct futures trading. Article 50 When providing services to the trader, a futures business organization shall, in accordance with relevant regulations, fully understand the trader's basic information, property status, financial assets status, trading knowledge and experience, professional ability and other relevant information; truthfully explain the important contents of the service and fully reveal the trading risks; provide services that match the trader's conditions. When participating in futures trading and receiving services, the trader shall, in accordance with the expressed requirements by a futures business organization, provide true information listed in the preceding paragraph. If the trader refuses to provide or fails to provide information as required, the futures business organization shall inform the trader of the consequences and refuse to provide services in accordance with regulations. Where a futures business organization violates the provisions of paragraph 1 and causes losses to the traders, it shall be liable for compensation accordingly. Article 51 The traders may be classified into ordinary traders and professional traders on the basis of such factors as property status, financial assets status, trading knowledge and experience, and professional ability. The standards for professional traders shall be prescribed by the futures regulatory authority of the State Council. Where a dispute arises between an ordinary trader and a futures business organization, the futures business organization shall prove that its conduct complies with laws, administrative regulations and the provisions of the futures regulatory authority under the State Council, and that there is no misdirection or fraud. If the futures business organization cannot prove it, it shall bear the corresponding liability for compensation. Article 52 Legal persons and non-legal entities involved in futures trading shall establish internal control systems and risk control systems appropriate to the type, scale and purpose of the futures contracts its traded. Article 53 Employees of futures business organization, futures trading venues and futures settlement organization, staff members of the futures regulatory authority and futures industry association under the State Council, and other personnel prohibited from participating in futures trading by laws, administrative regulations and the futures regulatory authority under the State Council shall not engage in futures trading. Article 54 A trader shall have the right to inquire his/her entrustment records, transaction records, margin balance and other important information related to the services he/she receives. Article 55 A futures business organization, a futures trading venue, a futures settlement organization, a futures service organization and its staff shall keep the information of traders confidential according to law and shall not illegally buy, sell, provide or publicize the information of the traders. Futures business organization, futures trading venues, futures settlement organizations, futures service organizations and their staff members shall not divulge the trade secrets they know. Article 56 Where a dispute arises between a trader and a futures business organization, both parties may apply to the futures industry association for mediation. Where a dispute arises between an ordinary trader and a futures business organization and a request for mediation is made, the futures business organization shall not refuse the request. Article 57 When a trader brings a civil action for futures compensation such as market manipulation or insider trading, if the object of action is the same category and there are a large number of parties involved, he/she may elect representatives to litigate according to law. Article 58 The State establishes a Futures Trader Guarantee Fund. Specific measures for the raising, managing and using of the futures trader guarantee fund shall be formulated jointly by the futures regulatory authority of the State Council and the financial department of the State Council.
Chapter V Futures Trading Institutions Article 59 A futures business organization refers to a futures brokerage firm established in accordance with the Company Law of the People's Republic of China and this Law and other institutions approved by the futures regulatory authorities of the State Council to engage in futures business. Article 60 To establish a futures brokerage firm, the following conditions shall be met and approved by the futures regulatory authority of The State Council: (1) it has the articles of association in conformity with the provisions of laws and administrative regulations; (2) its major shareholders and actual controllers shall have good financial status and good faith records, and their net assets shall not be lower than the standards prescribed by the futures regulatory authority under the State Council, and they shall have no record of major violations of laws and regulations in the recent three years; (3) its registered capital shall not be less than RMB 100 million yuan, and it shall be the paid-in monetary capital; (4) its personnel engaged in futures business shall meet the requirements prescribed in this Law, board member, supervisors and senior managers shall meet the corresponding conditions for appointments; (5) having a sound corporate governance structure, a sound risk management system and a sound internal control system; (6) having qualified business sites, business facilities and information technology systems; (7) other conditions stipulated by laws, administrative regulations and the futures regulatory authority under the State Council. The futures regulatory authorities under the State Council may raise the minimum capital requirements to implement their prudent supervision in accordance with the risk levels of the (company’s) business operations. The futures regulatory authorities under the State Council shall, within six months from the date of accepting the application for the establishment of a futures brokerage firm, assess the application in accordance with its statutory conditions, legal procedures and the principle of prudent supervision, make a decision of approval or disapproval, and notify the the resulus to the applicant. In case of disapproval, reasons shall be given. Article 61 A futures brokerage firm shall indicate "futures" in its title, except as otherwise stipulated by the futures regulatory authority under the State Council. Article 62 A futures company shall obtain the approval from the futures regulatory authority under the State Council for handling the following matters: (1) merger, division, suspension of business, dissolution or application for bankruptcy; (2) change of major shareholders or actual controllers of the firm; (3) change of registered capital and adjust equity structure; (4) change of business scope; (5) other major matters stipulated by the futures regulatory authority under the State Council. the futures regulatory authority under the State Council shall make a decision of approval or disapproval for the matters listed in items (3) and (5) of the preceding paragraph with in 20 days after accepting the application. For other matters listed in the preceding paragraph, the futures regulatory authority under the State Council shall make a decision of approval or disapproval within 60 days from the date of accepting the application. Article 63 A futures brokerage firm may engage in the following futures services business upon approval of the futures regulatory authority of the State Council: (1) futures brokerage services; (2) futures trading consultation; (3) trading as a futures market maker; (4) other futures businesses. A futures brokerage firm engaged in asset management business shall comply with the provisions of 《Securities Investment Funds of the People's Republic of China》 and other laws and administrative regulations. Without the approval from the futures regulatory authority under the State Council, no unit or individual may establish or covertly establish a futures brokerage company, operate or covertly operate futures brokerage business or futures trading consulting business, or use "futures", "options" or other words in its title that may cause confusions or misdirections for business purposes. Article 64 The board members, supervisors and senior managers of a futures brokerage firm shall be honest, have good conducts, be familiar with futures laws and administrative regulations, and have the operational and management skills necessary for performing their duties. The appointment and removal of directors, supervisors and senior managers of a futures brokerage firm shall be reported to the futures regulatory authorities under the State Council for the records. Under any of the following circumstances, he or she shall not hold a post as a board member, supervisor or senior manager of the futures brokerage firm: (1) he or she is prohibited from serving as a board member, supervisor or senior manager of the company as stipulated in《The Company Law of the People's Republic of China》; (2) board members, supervisors and senior managers of futures business organization who have been removed from their posts due to violations of laws or discipline, or persons in charge of futures trading venues or futures settlement organizations who have been removed from their posts less than five years from the date of removal; (3) non of the certified public accountants, lawyers or professionals of other futures services organizations whose certificates have been revoked or disqualified due to violations of law or discipline may service within five years after the revocation or disqualification of his or her certificates. Article 65 A futures business organization shall operate according to law, be diligent, responsible, honest and trustworthy. A futures business organization shall establish and improve its internal control system and take effective segregation measures to prevent conflicts of interest between the business organization and its clients or between different clients. A futures business organization shall handle its futures brokerage business, futures market making business, asset management business and other related businesses separately and its operation shall be segregated, shall not conduct mixed operations. A futures business organization shall establish and implement Anti-Money Laundering Programs according to law. Article 66 Upon soliciting or accepting orders from a trader to carry out futures trading on trader’s behalf, the futures business organization shall sign a entrustment agreement with the trader. The trader shall bear responsibilities for the results of the trading. Futures business organization shall not accept Carte Blanche (full authority) from any trader. Article 67 Where a futures business organization engages in asset management business by accepting customer's entrustment and uses customer's assets for investment, it shall treat each customer's assets under its management fairly and shall not contrary to its fiduciary obligations（受托义务）. Article 68 A futures business organization shall not, in violation of regulations, provide financing or loan guarantee to its shareholders or actual controllers or their affiliates shall not provide loan guarantee to other parties in violation of regulations. Article 69 Personnel of a futures business organization engaged in futures business shall be honest, have good conducts, and possess professional capabilities required to engage in futures business. Personnel of a futures business organization engaged in futures business shall not privately accept clients' entrustment to engage in futures trading. Where a futures business organization's personnel, while carrying out futures business activities, violates the futures trading rules by executing the instructions to the futures business organization to which he or she belongs to or taking advantage of their positions, the futures business organization to which he or she belong shall bear full responsibility. Article 70 The futures regulatory authority under the State Council shall formulate rules for the sustainable operation of futures business organizations; provide rules on the operating conditions, risk management, internal control, margin deposit management, compliance management, risk supervision indicators, related-party transactions, etc., for futures business organizations and their branches. Futures related-party transactions shall comply with the rules of sustainable operation. Article 71 A futures business organization shall, in accordance with regulations, submit its business and financial management information and materials to the futures regulatory authority under the State Council. The futures regulatory authority under the State Council shall have the right to require a futures business organization and its major shareholders, actual controllers and other related parties to provide relevant information and materials within a specified time limit. The information and materials submitted or provided by a futures business organization and its major shareholders, actual controllers or other related parties to the futures regulatory authority of The State Council shall be true, accurate and complete. Article 72 A futures business organization shall submit a written report to the futures regulatory authority under the State Council within five days from the date of the occurrence of any major litigation or arbitration, equity freeze or use for security, or any other major event. The controlling shareholder or actual controller of a futures business organization shall cooperate with the futures business organization in fulfilling the obligations prescribed in the preceding paragraph. Article 73 Where a futures business organization fails to comply with the rules for sustainable operation or has operational risks, the futures regulatory authority under the State Council shall order it to make corrections within a time limit. The regulatory authority under the State Council may impose the following measures based on the actual situation: when a futures business organization fails to correct its business conducts within the time limited, its conducts are seriously endangering the stable operation of the futures business organization，violating the legitimate rights and interests of the trader, or its conducts are being suspected for a serious violation of the rules and regulations and being investigated by the regulatory authorities under the State Council. (1) restricting or suspending certain businesses; (2) stop approving new businesses; (3) restricting the distribution of dividends and the payment of remuneration and welfare to board members, supervisors and senior managers; (4) restricting the transfer of property or establishing other rights on property; (5) ordering the replacement of board members, supervisors, senior managers or responsible personnel of relevant business departments or branches, or limit their rights; (6) restricting the allocation and use of futures business organizations' own funds or risk reserve funds; (7) identifying the board members, supervisors and senior managers who are responsible for related conducts as inappropriate candidates for their posts.; (8) ordering the responsible shareholders to transfer their equity and restrict them from exercising their rights as shareholders. The futures regulatory authorities under the State Council shall, within three days from the date of completion of the inspection, lift the relevant measure taken against the futures business organizations that have been rectified and conform to the provisions of relevant laws and administrative regulations and the requirements of the rules for continuous operation. Where a futures business organizations had been rectified but did not meet the requirements of the rules for sustainable operation and its business operation has been seriously affected, the futures regulatory authorities under the State Council shall have the rights to revoke parts or all of its futures business licenses and/or close down parts of or all of its branches. Article 74 Where a futures business organization conducts illegal operations or has major risks that seriously endanger the order of the futures markets or harm the interests of traders, the futures regulatory authority under the State Council may take such supervisory and administrative measures as ordering the futures business organization to halt its business operation for rectification, or appoint another institution to manage or take over its business operations. Where a futures business organization falls under the circumstances specified in the preceding paragraph, upon approval of the futures regulatory authority under the State Council, it may take the following measures against the board members, supervisors, senior managers and other persons who are directly responsible for the futures business organization: (1) to decide and notify the immigration authorities to prevent them from leaving the country according to law; (2) to apply to judicial organization to prohibit transfer, demise or dispose its property by other means, or establishing other rights on its property. Article 75 Where a shareholder of a futures business organization commits any act of making false capital contribution or withdrawing capital contribution, the futures regulatory authority under the State Council shall order to rectify his or her act within the prescribed time limit and may order him to transfer the equity he holds in the futures business organization. The futures regulatory authority under the State Council may restrict the shareholder's rights before the shareholder rectify his or her illegal acts and transfers the equity he or she holds in the futures business organization in accordance with the requirements of the preceding paragraph. Article 76 Where a futures business organization falls under any of the following circumstances, the futures regulatory authority of the State Council shall go through formalities to revoke its relevant business license according to law: (1) its business license is revoked according to law; (2) failing to start business for more than three months after its establishment without justifiable reasons, or suspending its business operation for more than three consecutive months after its establishment without justified reasons; (3) voluntarily submitted an application for cancellation; (4) other circumstances under which the administrative license shall be canceled as stipulated in the Administrative License Law of the People's Republic of China and the futures regulatory authority under the State Council. A futures business organization shall, before canceling the relevant business license, clear the relevant futures business and return the margin and other assets of the trader according to law. Article 77 the futures regulatory authorities under the State Council may entrust a futures services organization to audit or appraise the financial status, internal control status and asset values of a futures business organization when it deems necessary. Specific measures shall be formulated by the futures regulatory authorities of the State Council in conjunction with relevant competent departments. Article 78 Futures business organizations are prohibited from engaging in any of the following acts that harm the interests of traders: (1) promise the trader that the trader’s principle will be shielded from any losses or that the trader will obtain a minimum returns; (2) agree with the trader to share profits and risks; (3) trading futures in violation of the trader's authorization; (4) concealing important matters or using other improper means to trick traders into trading; (5) providing trading suggestions to traders based on false or uncertain material information; (6) providing false transaction returns to the trader; (7) failing to place the trader's trading orders at the futures trading venue; (8) misappropriating trader’s margin; (9) failing to open a margin account with the futures margin depository organization in accordance with regulations, transferring trader’s margin in violation of the regulations; (10) taking advantage of the convenience of providing services to the trader to obtain improper benefits or shift risks; (11) other acts that may impair the rights and interests of the trader.
Chapter VI Futures Trading Venues Article 79 A futures trading venue shall follow the principle of giving priority to public interests, provide places and facilities for futures trading, organize and supervise futures trading, maintain the fairness, order and transparency of the market and practice self-regulation. Article 80 The establishment, alteration or dissolution of a futures exchange shall be subject to the approval of the futures regulatory authority under the State Council. Articles of association shall be formulated for the establishment of a futures exchange. The formulation and amendment of the articles of association of a futures exchange shall be subject to the approval of the futures regulatory authority under the State Council. Article 81 A futures exchange shall indicate in its name with such words as "Commodity Exchange" or "futures exchange". No other entity or individual may use a futures exchange or any other name that may cause confusion or misleading. Article 82 A futures exchange may adopt membership system or corporate system as its organizational form. The organization structure of the membership system shall be prescribed in the articles of association of the futures exchange. Article 83 A futures exchange shall formulate relevant business rules in accordance with laws, administrative regulations and the regulation stipulated by the futures regulatory authority under the State Council. Specifically, formulation and amendment of trading rules shall be submitted to the futures regulatory authority of The State Council for approval. The business rules of a futures exchange shall reflect the principle of fairly protecting the legitimate rights and interests of its members, traders and other market-related parties. Futures trading and related activities in a futures exchange shall be governed by the business rules formulated by the futures exchange according to law. In case of violation of business rules, the futures exchange shall impose disciplinary sanctions or take other self-regulatory measures against the persons violated the rules. Article 84 The chief of a futures exchange shall be nominated or appointed or removed by the futures regulatory authority under the State Council. Any person who was described in 《 The Company Law of the People's Republic of China》as not suitable to be The chief of may not be a board member, supervisor or senior manager of a company, or any person who is under any of the circumstances described below shall not be a chief of a futures exchange: (1) Five years have not lapsed from the day when a board members, supervisor or senior manager of futures business organizations or a chief of a futures exchange or a or a futures settlement organization removed from his or her post because of violation of laws or disciplines; (2) Five years have not lapsed from the day when a lawyer, certified public accountant or professional of other futures services organization had his or her business licence or qualification revoked because of his or her violation of the laws or disciplines. Article 85 A futures exchange shall, in accordance with this Law and the provisions of the futures regulatory authority under the State Council, strengthen risk control over trading activities and supervision and administration over members and staff of the exchange, and perform the following duties according to law: (1) To provide trading places, facilities and services for providing; (2) to design futures contracts and standardized options contracts and arrange listing of futures contracts and standardized options contracts; (3) real-time monitoring of futures trading and its risks; (4) to exercise self-regulation over its members, traders and futures services organizations, etc. in accordance with the articles of association and business rules; (5) to carry out trader education and market cultivation; (6) other duties prescribed by the futures regulatory authority under the State Council. A futures trading venue shall not directly or indirectly participate in futures trading. Without the approval of The State Council, futures trading venues shall not engage in trust investment, stock investment, non-self-use real estate investment and other businesses unrelated to their duties. Article 86 The revenue of a futures exchange shall be managed and used in accordance with the relevant regulations set by the State, but shall first be utilized to ensure the operation and improvement of futures trading sites and facilities. Article 87 A futures trading venue shall strengthen monitoring of the risks of futures trading. In case of any abnormal situation, a futures trading venue may take the following emergency measures independently or jointly with a futures settlement organization according to business rules and immediately report the incident to the futures regulatory authority under the State Council: (1) adjusting the margin; (2) adjusting the daily limits; (3) adjusting the trading limits or position limits of the members and the traders; (4) restricting the opening of positions; (5) forced liquidation of positions; (6) suspending the trading temporarily; (7) other emergency measures. After the abnormal situation disappears, the futures trading venue shall cancel the emergency measures in time. Article 88 A futures trading venue shall publish real-time futures trading quotations, and make a futures market quotation table according to the trading day and publish it. The rights and interests of futures trading quotations shall be possessed by futures trading venues. No unit or individual may issue futures trading quotations without a permission from the futures trading venue. Futures trading venues shall not release price forecast information. The futures trading venues are obliged to provide market information in accordance with the regulations set forth by the futures regulatory authority under the State Council. Article 89 When an emergency situation which affects the normal operation of the futures trading occurs, the futures exchange venue may take necessary measures in accordance with this Law and business rules to maintain normal order of the operation and fairness of the market, and it shall timely report the incident to the futures regulatory authority under the State Council. When the settlement prices and the delivery conditions resulted from the above mentioned emergency situation which was causing a significantly abnormal trading results, are creating major impacts on normal order of the trades and damaging fairness of the market, the futures trading venues may revoke the transactions and take necessary measures in accordance with its business rules. It shall timely report the incident to the futures regulatory authority under the State Council, and make a public announcement accordingly. Article 90 A futures trading venue shall not be liable for civil compensation for losses caused by the measures it took in accordance with the provisions of Article 87 and 89 of this Law, except it caused a major fault.
Chapter VII futures settlement organizations Article 91 A futures settlement organization refers to a legal person established according to law to provide settlement and delivery services for futures transactions and to exercise self-regulation. Futures settlement organizations include futures trading venues with internal settlement departments, independent futures settlement organizations and securities settlement organizations approved by the futures regulatory authority under the State Council to engage in futures settlement and delivery related to securities businesses. Article 92 The establishment, alteration or dissolution of an independent futures settlement organization shall be subject to the approval of the futures regulatory authority under the State Council. To establish an independent futures settlement organization, the following conditions shall be met: (1) it shall have a good financial condition and the minimum registered capital shall conform to the provisions of the futures regulatory authority under the State Council; (2) having senior management personnel with professional knowledge and business experience; (3) having a sound governance structure, internal control system and risk control system; (4) having required business space, information technology systems and other facilities related to the settlement of futures transactions; (5) other conditions stipulated by the futures regulatory authority under the State Council. A futures trading venue that assumes the functions of a futures settlement organization shall meet the conditions prescribed in paragraph 2 of this Article. The futures regulatory authority under the State Council shall conduct an inspection in accordance with the principle of prudent supervision and make a decision of approval or disapproval within six months （after receiving the application）. Article 93 As an intermediary between buyer and seller, a futures settlement organization shall net-clear the trades, provide centralized guarantee for the transactions. Article 94 A futures settlement organization shall perform the following duties: (1) to settle the trading accounts and regulate the delivery process; (2) to exercise self-regulation over traders, futures business organizations, futures service organizations and settlement participants of non-futures business organizations in accordance with the articles of association and business rules; (3) to provide information/inquiry services in relation to the settlement and delivery of futures transactions; (4) other duties prescribed by the futures regulatory authority under the State Council. Article 95 A futures settlement organization shall, in accordance with the provisions of the futures regulatory authority under the State Council, stipulate in its business rules on such matter as settlement participant systems, risk control systems, information security management systems, violation and breach handling systems, emergency handling and temporary handling measures. The formulation and amendments of the articles of association and business rules of a futures settlement organization shall be subject to the approval of the futures regulatory authority under the State Council. The participating parties in futures settlement shall abide by the business rules formulated by a futures settlement organization. The formulation and implementation of the business rules of a futures settlement organization shall be in line with and coordinated with the relevant systems of a futures trading venue. Article 96 A futures settlement organization shall establish a liquidity management system to ensure steady operation of settlement activities. Article 97 The provisions of Article 84, Paragraph 2 of Article 85, Paragraph 3 and Paragraph 4 of Article 86, and Paragraph 3 and Paragraph 4 of Article 88 of this Law shall apply to the independent futures settlement organizations and the securities settlement organizations approved to engage in settlement and delivery of the futures transactions.
Chapter VIII Futures Services organizations Article 98 Those futures services organizations such as accounting firms, law firms, asset appraisal institutions, the futures margin depository organizations（FMDO）, delivery warehouses and information technology services organizations, etc, shall diligently fulfill their duties, provide services for futures trading and related activities in accordance with the relevant business rules, and provide relevant information in accordance with the requirements of the futures regulatory authority under the State Council. Article 99 Where the futures services organizations such as accounting firms, law firms, asset appraisal institutions accepts entrust by the futures business organizations, futures exchange, futures settlement organizations to issue the audit report, legal opinions or other documents, shall verificate and validate the truthfulness, accuracy and completeness of the contents of the documents . Article 100 Delivery warehouses include delivery warehouses and delivery factories, etc. designated as delivery points. The relevant services which a delivery warehouse provides for delivery of futures contracts shall be in accordance with the conditions described by the futures trading venue. The futures trading venue shall sign an agreement with the delivery warehouse to clarify the rights and obligations of both parties. The delivery warehouses shall not have any of the following behaviors: (1) issuing false warehouse receipts (2) in violation of the business rules of a futures trading venue, restricting commodities in the delivery process from entering and exiting the delivery warehouse; (3) divulging business secrets related to futures transactions; (4) participating in futures trading in violation of relevant state regulations; (5) other acts in violation of the provisions of the futures regulatory authority under the State Council. Article 101 An organization providing information technology services for futures trading and related activities shall abide by the information security related technical management rules and standards set forth by the State and report to the futures regulatory authority under the State Council for the record. The futures regulatory authority under the State Council may, according to law, require the information technology services organization to provide the relevant materials in regards to the information technology system specified in the preceding paragraph.
Chapter IX Futures Industry Association Article 102 The futures industry association（here after referred to as FIA）is a self-regulatory organization in the futures industry and the legal person as a social organization. Futures business organizations shall join FIA. Futures services organizations may join FIA. Article 103 The authority of FIA is the General Assembly. The articles of association shall be formulated by General Assembly and submitted to the futures regulatory authority of The State Council for the record. FIA shall have council. Members of the council are elected in accordance with the articles of the association. Article 104 FIA shall perform the following duties: (1) formulate and implement self-discipline rules for the industry, supervise and inspect business activities of its members and the practicing behaviors of its employees, and give disciplinary sanctions or implement other self-discipline measures to those who violate laws, administrative regulations, and relevant state regulations, association articles and self-discipline rules; (2) to mediate disputes between members and between members and traders; (3) safeguard the legitimate rights and interests of the members according to law and report the suggestions and requirements of the members to the futures regulatory authority under the State Council; (4) organize business training for futures trading practitioners and facilitate business exchanges among its members; (5) educate its members and futures trading practitioners in the futures trading to abide by futures laws, regulations and policies, organize programs for the construction of integrity in the industry, and build an incentive and restraint mechanism for integrity in the industry; (6) carry out trader education and protection work, urge members to implement trader appropriate management system and carry out promotional activities for the futures market; (7) implement the self-regulated management on the information security work to its members, urge its members to implement the relevant provisions and technical standards of the national and industrial information security; (8) organize members to conduct research on the development, operation and related contents of the futures industry, collect, sort out and release futures related information, provide member services, organize industry exchanges, and guide the innovation and development of the industry; (9) other duties prescribed by the articles of association.
Chapter X Supervision and Administration Article 105 The futures regulatory authority under the State Council shall supervise and administer the futures markets according to law, maintain the openness, fairness and impartiality of the futures markets, guard against systemic risks, safeguard the legitimate rights and interests of traders and promote the healthy development of the futures markets. The futures regulatory authority under the State Council shall perform the following duties in accordance with law in the supervision and administration of the futures markets: (1) formulate rules and regulations related to supervision and administration of futures markets, conduct examination, provide approval, audit and registration according to law, and keep records of its activities; (2) supervise and administer futures trading and related activities such as listing, trading, settlement and delivery, etc; (3) to supervise and administer the futures business activities of relevant market participants such as futures business organizations, futures trading venues, futures settlement organizations, futures service organizations and settlement participants of non-futures business organizations; (4) formulate the codes of conduct for the futures practitioners and supervise their implementation; (5)supervise and inspect disclosure of the futures trading information; (6) safeguard the legitimate rights and interest of traders and carry out trader education; (7) investigate and inflict penalties against illegal activities in the futures trading; (8) monitoring, preventt and control the risks in the futures markets; (9) supervise the financial technology and information security of the futures industry; (10) guide and supervise the self-regulatory activities of the Futures Industry Association; (11) carry out other duties as prescribed by laws and administrative regulations. The futures regulatory authority under the State Council may, when necessary, establish representative offices to perform supervisory and regulatory functions as authorized. Article 106 The futures regulatory authority under the State Council has the right to take the following measures to perform its duties according to law: (1) conduct on-site inspection to the futures business organizations, futures trading venues and futures settlement organizations, and require them to submit relevant materials such as financial accounting, business activities and internal control; (2) conduct on-site inspections where illegal activities are suspected and collect evidence.; (3) question the parties and units and individuals related to the incident under investigation, and demand them to make explanations on the matters related to the incident under investigation, or to submit documents and data related to the incident under investigation in a designated manner; (4)examine and make copies of such documents as property rights registration records and communication records related to the incident under investigation; (5) examine and make copies of the futures trading records, financial accounting materials and other related documents and materials of the parties concerned and the persons and work units under investigation. These documents and materials may be sealed or detained if there is a reason to believe they may be transferred, hidden or damaged; (6) those materials and documents including the margin accounts, bank accounts and other account information with functions of payment, custody and settlement, etc. of the parties concerned and the work units and individuals under investigation, may be copied.; Where there is evidence proving that illegal funds and other assets involved have been or may be transferred or concealed, or important evidence has been concealed, forged or damaged, they may be frozen or sealed up for a period of six months with the approval of the principal person in charge of the futures regulatory authority under the State Council or another person in charge authorized by principal person in charge. If an extension is needed for special reasons, the time limit for each extension shall not exceed three months, and the maximum time limit shall not exceed two years; (7) when investigating major illegal acts such as market manipulation or insider trading with the approval of the principal person-in-charge of the futures regulatory authority under the State Council or other person-in-charge authorized by the authority, the trading activities of the parties involved in the incident under investigation may be restricted, but the restriction period shall not exceed more than three months; If the case is complicated, an extension of three months may be granted; (8)identify and notify the immigration authorities to prevent persons suspected of violating the law, supervisors of units suspected of violating the law and other persons directly responsible from leaving the country according to law. In order to prevent risks in the futures markets and maintain the market order, the futures regulatory authority under the State Council may take measures such as issuing correction orders, conduct administrative talks and issuing warning letters, etc. Article 107 Where the futures regulatory authority under the State Council shall carry out supervision, inspection or investigation in accordance with its functions and duties, there shall be at least two persons involved in supervision and inspection and investigation; they shall produce law enforcement certificates and relevant law enforcement documents for inspection, investigation or inquiry. If the supervision, inspection or investigation personnel are less than two or fail to produce their law enforcement certificates or relevant law enforcement documents, the unit or individuals under inspection or investigation shall have the right to refuse to be investigated or inspected. Article 108 The staff of the futures regulatory authority under the State Council shall handle matters according to law, be loyal to their duties, be fair and honest, shall not disclose the State secrets or the commercial secrets of the parties concerned, and may not seek illegitimate gains by taking advantage of their positions. Article 109 The futures regulatory authority under the State Council shall perform its duties according to law, and the units and individuals under inspection or investigation shall cooperate by giving truthful explanations or providing relevant documents and materials, and shall not refuse, obstruct or conceal any subject matters. The futures regulatory authority under The State Council and other relevant departments shall establish a coordinated mechanism for supervision and administration, such as information sharing. When the futures regulatory authority under the State Council performs its duties and conducts supervision, inspection or investigation according to law, the relevant departments shall cooperate. Article 110 Any unit or individual shall have the right to report any illegal or irregular acts in futures trading to the futures regulatory authority under the State Council. Where the clues of real-name reports suspected for major violations against laws and regulations are verified, the futures regulatory authority under the State Council shall reward the informant in accordance with regulations. The futures regulatory authority under the State Council shall keep the identity of the whistle blower confidential. Article 111 These rules, regulations and supervision and administration systems formulated by the futures regulatory authority under the State Council shall be made public according to law. The futures regulatory authority under the State Council shall, on the basis of the investigation results, make its decision on penalties against illegal futures acts public. Article 112 During the investigation against the unit or individual suspected for violating the futures law, if the parties under the investigation applied in writing promising to rectify the suspected illegal activities within the time limit specified by the futures regulatory authority under the State Council, compensate the traders concerned for their losses, eliminate the damage and adverse effects inflicted upon, the futures regulatory authority under the State Council may decide to suspend the investigation. If the party under investigation has fulfilled its commitments, the futures regulatory authority of the State Council may decide to terminate the investigation. If the party under investigation fails to fulfill his commitments or is under other circumstances as stipulated by the State Council, the investigation shall be resumed. Specific measures shall be formulated by The State Council. If the futures regulatory authority under the State Council suspends or terminates the investigation, relevant information shall be disclosed in accordance with regulations. Article 113 The futures regulatory authority under the State Council shall, in accordance with law, compile reports on actual compliance of the futures markets to this Law, and file it into the integrity archives. Article 114 Where the futures regulatory authority under the State Council performing its duties according to law, discovered illegal activitives which may constitute crimes, it shall handover the case to the judicial organ. If a public servant is suspected of violating the law or committing a crime while he or she is in the office, he or she shall be handed over to the prosecutor’s office for prosecution. Article 115 The futures regulatory authority under the State Council shall establish and improve the monitoring and surveillance system of the futures markets, and strengthen the monitoring and control of margin safety through specialized agencies. Article 116 In order to guard against risks in trading and settlement, futures business organizations, futures settlement organizations and settlement participants of non-futures business organizations shall draw, manage and use risk reserves fund from their business revenues in accordance with the provisions set by the futures regulatory authority under the State Council and the financial department under the State Council. Article 117 Futures business organization, futures trading venue, futures settlement organization, futures services organization and non-futures settlement participants shall properly preserve all the business related materials and information to their business operations in accordance with the regulations. No one may disclose, conceal, forge, alter or damage them. The retention period of information and materials of settlement participants of futures business organizations, futures trading venues, futures settlement organizations and non-futures business organizations shall not be less than 20 years; the retention period of the information and materials of the futures services organization shall not be less than 10 years.
Chapter XI Cross-border Transactions and Regulatory Collaborations Article 118 Where an overseas futures trading venue plans to provide domestic units or individuals with direct access to its trading systems to receive its trading services, it shall apply to the futures regulatory authority under the State Council for registration, and accept the supervision and administration of the authority, unless otherwise provided for by the authority. Article 119 Where the futures contracts, futures options contracts and derivative contracts listed at overseas futures trading venues are settled by linking to the price of the domestic futures trading venues, they shall comply with the provisions of the futures regulatory authority under the State Council. Article 120 Where a domestic entity or individual engages in overseas futures trading shall entrust a domestic futures business organization with the qualifications for overseas futures brokerage business to trade overseas futures, except as otherwise stipulated by the State Council. Where a domestic futures business organization entrusts an overseas futures business organization to engage in overseas futures trading, the overseas futures business organization shall apply for registration with the futures regulatory authorities under the State Council and accept the supervision and administration by the futures regulatory authority under the State Council, except as otherwise provided for by the futures regulatory authorities under the State Council. Article 121 Where an overseas futures exchange venue establishes a representative office within the Chinese territory, it shall report to the futures regulatory authority under the State Council for the records. Representative offices of overseas futures trading venues and their staff members shall not engage in or covertly engage in any business activities. Article 122 Where overseas institutions engage in marketing, promotion and solicitation in China for the futures markets shall obtain approvals from the futures regulatory authorities under the State Council. The relevant provisions of this Law shall apply. The domestic institution representing overseas entities to engage in marketing, promotion and solicitation in China for the futures markets shall obtain the approvals from the futures regulatory authority under the State Council. No entity or individual may engage in futures market marketing, promotion or solicitation for the futures markets in violation of the provisions of the preceding two paragraphs. Article 123 The futures regulatory authority under the State Council may establish a supervision and administrative cooperation mechanisms with overseas futures regulatory authorities, or join international organizations to carry out cross-border supervision and administration. Where the futures regulatory authority under the State Council provides assistance at the request of an overseas futures regulatory authority, it shall abide by the provisions of the State laws and regulations and the principle of reciprocity, and shall not divulge state secrets or harm the interests of the State or the public. Article 124 The futures regulatory authority under the State Council may, in accordance with the regulatory cooperation arrangements reached with the overseas futures regulatory authorities, accepts requests from the overseas futures regulatory authorities, conduct investigation and evidence collection on its behalf according to the jurisdiction and procedures prescribed in this Law. The overseas futures regulatory authorities shall provide relevant case materials and explain that it is investigation the case that the defendant was suspected for violating the local futures laws and regulations where the plantiff resides. An overseas futures regulatory agencies shall not directly conduct investigations and collect evidence within the territory of the People's Republic of China. Without consents of the futures regulatory authority under the State Council and the relevant competent departments under the State Council, no unit or individual may, without authorization, provide documents and materials related to futures business activities to the overseas regulatory agency. The futures regulatory authority under the State Council may, in accordance with the regulatory cooperation arrangements reached with the overseas futures regulatory authorities, request the overseas futures regulatory authorities to conduct investigation and collect evidence.
Chapter XII Legal Liabilities Article 125 Whoever, in violation of the provisions of Article 12 of this Law, manipulated a futures market or a derivatives market shall be ordered to make corrections, his of her illegal gains shall be confiscated, and he shall be fined for an amount between one and ten times of his or her illegal income; If there is no illegal income or the illegal income is less than one million yuan, a fine of between one million yuan and ten million yuan shall be imposed. Where a unit manipulates a market, the chief-in-charge and other persons directly responsible shall also be warned, and a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed. Where the market manipulation causes losses to the traders, those who manipulated shall be liable for compensation according to law. Article 126 Whoever, in violation of the provisions of Article 13 of this Law, engages in insider trading shall be ordered to make corrections, his illegal earnings shall be confiscated, and a fine of not less than one time but not more than ten times his illegal income shall be imposed; If there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed. Where a unit engaged in insider tradings, the chief-in-charge and other persons directly responsible shall also be warned and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. Any staff member of the futures regulatory authority under the State Council, any department authorized by the State Council, any futures trading venue or a futures settlement organization which engaged in insider tradings shall be given a heavier punishment. Where insider trading causes losses to traders, those who inflicted the inside trading shall be liable for compensation according to law. Article 127 Whoever, in violation of the provisions of the first and third paragraphs of Article 16 of this Law, fabricates or disseminates false or misleading information to disrupt the futures markets or derivatives markets, his or her illegal income shall be confiscated and he or she shall be fined for an amount between one and ten times his illegal income; If there is no illegal income or the illegal income is less than 200,000 yuan, a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. The persons-in-charge and other persons directly responsible shall also be warned, and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Whoever, in violation of the provisions of Paragraph 2 of Article 16 of this Law, makes false statements or gives misleading information in futures trading or derivatives trading shall be ordered to make corrections and imposed a fine of not less than 200,000 yuan but not more than two million yuan; Those who are state functionaries shall also be given sanctions according to law. Where any media or person reporting the futures or derivatives market information, in violation of the provisions of the third paragraph of article 16 of this law, engage in futures and/or derivatives trading in the conflicts of interest against his or her job responsibilities, his or her illegal income shall be confiscated, and a fine of less than the some amount of his or her illegal income shall be imposed. In case of no illegal income were recorded or the illegal income was less than 100,000 yuan, a fine of less than 100,000 yuan shall be imposed. Whoever fabricates or disseminates false information about futures or derivatives trading or misleading information on futures or derivatives trading, thus causing losses to traders, shall be liable for compensation according to law. Article 128 Whoever, in violation of the provisions of paragraph 2 of Article 18 of this Law, lends his own futures account or borrows another's futures account to engage in futures trading shall be ordered to make corrections, given a warning and may be fined not more than 500,000 yuan. Article 129 Whoever, in violation of the provisions of Article 21 of this Law, affects the systems security or the normal trading order of a futures trading venue by adopting program trading shall be ordered to make corrections and be fined for an amount between 500,000 yuan and RMB five million yuan. The chief directly responsible and other persons directly responsible shall be given warnings and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Article 130 Whoever, in violation of the provisions of Article 27 of this Law, fails to report the relevant major issues shall be ordered to make corrections, given a warning and may be imposed a fine of not more than one million yuan. Article 131 Article131 Where any personnel who are prohibited to participate in futures trading by laws, administrative regulations or the regulations set forth by the futures regulatory authority under the State Council, in violation of the provisions of the Article 53 of this law, engaged in futures trading directly or by using an assumed name, or other person's name, he or she shall be order to correct and given a warning, his or her illegal income shall be confiscated, and a fine of more than 50,000 yuan but less than 500,000 yuan shall be imposed. Those who are the State functionaries shall also be given sanctions according to law. Article 132 Where a futures brokerage company is illegally established or engaged in relevant futures businesses without approval, it shall be ordered to close down, its illegal income shall be confiscated, and it shall be fined for an amount between one and ten times of its illegal income; If there is no illegal income or the illegal income is less than one million yuan, a fine of between one million yuan and ten million yuan shall be imposed. The chief directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. Article 133 Where a futures company fraudulently obtained the license to establish of a futures company, the approval for alteration of major matters or the license to establish a futures business organization by submitting false application documents or resorting to other fraudulent means, the relevant license shall be revoked, the illegal earnings shall be confiscated, and a fine of between one and ten times the illegal income shall be imposed. Article 133 Where any organization fraudulently obtained the license to establish a futures brokerage company, the approval to make alterations on major matters, or the license to establish a futures business organization by submitting false application documents or resorting to other fraudulent means, the relevant licenses shall be revoked, its illegal income shall be confiscated, and a fine of one and ten times of its illegal income shall be imposed. If there is no illegal income or the illegal income is less than 200,000 yuan, a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. The Chief of the organization directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. Article 134 Where a futures business organization violates Article 40, 62, 65, 68, 71 or 72 of this Law, it shall be ordered to make corrections, given warnings, its illegal income shall be confiscated, and it shall be fined for an amount between one and 10 times its illegal income. If there is no illegal income or the illegal income is less than 200,000 yuan, a fine of 200,000 yuan to two million yuan shall be imposed; If the case is serious, it shall be order to suspend its business operations for rectification or its futures business license shall be revoked. The chief of the company directly responsible and other persons directly responsible shall be given warnings and a fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed. A futures business organization shall be liable for compensation in accordance with the law if it has caused losses to traders under any of the illegal circumstances mentioned in the preceding paragraph. Where a major shareholder, actual controller or other associated person of a futures business organization violates the provisions of Article 71 of this Law, he shall be punished in accordance with the provisions of paragraph 1 of this Article. Article 135 Where a futures business organization, in violation of the provisions of Article 50 of this law on traders’ appropriateness management, or in violation of the provisions of the provisions of article 66, engaged in the brokerage business by accepting traders’ full authority（to trade futures on his or her behalf）, or in violation of the Article 78 by damaging interests of the traders, shall be ordered to correct and given warnings; its illegal income shall be confiscated, and a fine of between one and ten times of its illegal income shall be imposed. If there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed; For a severe violation, the relevant business license shall be revoked. The chief of the organization directly responsible and other persons directly responsible shall be given warnings, and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. Where a futures business organization commits any of the acts prescribed in Article 78 of this Law and causes losses to the traders, it shall be liable for compensation in accordance with law. Article 136 In violation of the provisions of Article 11, Article 80 and Article 92 of this Law, where any organization illegally established a futures settlement organizaion or illegally organized futures trading by any other means, its illegal income shall be confiscated and a fine of between one and ten times of its illegal income shall be imposed. If there is no illegal income or the illegal income is less than one million yuan, a fine of between one million yuan and ten million yuan shall be imposed. The Chief of the organization directly responsible and other persons directly responsible shall be given warnings and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. Any Illegal establishment of futures trading venue shall be banned by the people's governments at or above the county level. Those who, in violation of the provisions of Article 30 of this Law, organized derivatives transactions without approval, or those financial institutions in violation of the provisions of Article 31 of this Law, conducted derivatives transactions without approval, shall be penalized in accordance with the provisions of the preceding paragraph. Article 137 Where a futures trading venue or futures settlement organization violates the provisions of Article 17, Article 40 or Paragraph 2 of Article 85 of this Law, it shall be ordered to make corrections, given warnings, have its illegal income confiscated, and be fined for an amount between one and ten times of its illegal income. If there is no illegal income or the illegal income is less than 200,000 yuan, a fine of 200,000 yuan to two million yuan shall be imposed; For a severe violation, it shall be ordered to stop its business operation for rectification. A fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed on the chief of the organization directly responsible or the other persons directly responsible . Article 138 Where a futures trading venue or futures settlement organization released forecasts of the market prices in violation of the provisions of paragraph 3 of Article 88 of this Law, it shall be ordered to make corrections, given warnings, and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. A fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed on the chief of persons and the other persons directly responsible. Article 139 Where a futures services organization, in violation of the provisions of Article 98 of this Law, conducts futures service business without providing relevant materials as required, it shall be ordered to make corrections. A fine of not more than 200,000 yuan shall be imposed. Article 140 Where a futures services organizations such as an accounting firm, law firm, or an asset appraisal institution, in violation of the provisions of article 99 of this law, did not exercise due diligence in business, provide documents with false records or misleading statements or major omissions, shall be ordered for corrections, and its income shall be confiscated, and a fine of the amount between one and ten times of its business income shall be imposed; If there is no business income or the business income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed. The chief in charge directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed. Where a futures Service organization commits any illegal act mentioned in the preceding paragraph and causes losses to others, it shall be liable for compensation according to law. Article 141 Where a warehouse designated as a delivery point by futures trading venue commits any of the acts listed in Article 100 of this Law, it shall be ordered to make corrections, given warnings, its illegal income shall be confiscated, and a fine of between one and ten times of its illegal income shall be imposed. If there is no illegal income or the illegal income is less than 100,000 yuan, a fine of between 100,000 yuan and one million yuan shall be imposed; Where the violations was serious, the futures trading venue shall be ordered to suspend or cancel its approval to be a delivery warehouse for delivery against futures contracts. The chief directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed. Article 142 Where an information services organization violated the provisions of Article 101 of this Law by failing to file the records, it shall be ordered to make corrections and may be a fine of 200,000 yuan or less shall be imposed. Where an information services organization, in violation or provisions of Article 101 of this Law, provided services which did not conform to the technical management regulations and standards of the State and futures industry, it shall be ordered to make corrections, its business income shall be confiscated, and a fine of between one and ten times of its business income shall be imposed; If there is no business income or the business income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than 5 million yuan shall be imposed. The chief in charge directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 200,000 yuan but not more than 2 million yuan shall be imposed. Article 143 Where, in violation of the provisions of Article 116 of this Law, a futures business organization, a futures trading venue, a futures settlement organization or a settlement participant of a non-futures business organization fails to properly withdraw, manage or use the risk reserve fund as required, he or she shall be ordered to make corrections and given warnings. The chief in charge directly responsible and the other persons directly responsible shall be given a warning and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Article 144 Where, In violation of the provisions of article 117, a futures business organization, a futures trading venue, a futures settlement organization, a futures services organization or a settlement participant of a non-futures business organization fails to properly store the documents and data relevant to its business operation according to the regulations, it shall be ordered to make correction, and given warnings, and a fine of not less than one hundred thousand yuan and one million yuan shall be imposed; any person who divulges, conceals, forges, tampers with or damages relevant documents and data shall be ordered to make corrections, given a warning and a fine of not less than 200,000 yuan but not more than two million yuan shall be imposed; If the violation is serious, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed, and the relevant business license shall be suspended or revoked or the relevant business shall be prohibited. The chief in charge directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Article 145 Where an overseas futures trading venue or a futures business organization, in violation of provisions of Article 118 and 120 of this Law, fails to apply registration at the futures regulatory authority under the State Council, it shall be ordered to make corrections, its illegal income shall be confiscated, and it shall be fined for an amount between one and ten times of its illegal income; If there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed. The chief in charge directly responsible and the other persons directly responsible shall be given a warning and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Article 146 Where a domestic units or individuals who violated the provisions of the paragraph one of Article 120 of this Law shall be ordered to make corrections, and given warnings, have their illegal income confiscated and be fined for an amount not less than 100,000 yuan but not more than one million yuan. If the violations are serious, their overseas futures trading shall be suspended. The person-in-charge directly responsible and the other persons directly responsible shall be given a warning and a fine of not less than 50,000 yuan but not more than 500,000 yuan shall be imposed. Article 147 Where a representative office of a foreign futures trading venue established within the territory of China and its staff members engaged in or engaged covertly in any business activities in violation of regulations of Article 121 of this Law, they shall be ordered to make corrections, given warnings, have their illegal income confiscated, and be fined for an amount between one and ten times of their illegal income. If there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed. The chief in charge directly responsible and the other persons directly responsible shall be given warnings and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Article 148 Any institution, in violation of the provisions of the Article 122 of this Law, engaged in marketing, promotion or solicitation activities within the territory of China shall be ordered to make corrections, given warnings, his or her illegal income shall be confiscated, and he or she shall be fined for an amount between one and ten times his illegal income; If there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than five million yuan shall be imposed. The chief in charge directly responsible and the other persons directly responsible shall be given a warning and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed. Article 149 Any person refused or obstructed the futures regulatory authority under the State Council or the departments authorized by the State Council and their staff from exercising their supervisory, inspection and investigation functions and duties according to law shall be ordered to make corrections and a fine of not less than 100,000 yuan but not more than one million yuan shall be imposed, and shall be subject to administrative punishments for violating public security by the security organ according to law. Article 150 Where a person violated laws, administrative regulations or the relevant regulations of the futures regulatory authority under the State Council and the circumstances are serious, the futures regulatory authority under the State Council may ban the person responsible for the acts from entering into the futures markets. The term "banning the the person’s entry into futures market" as mentioned in the preceding paragraph refers to prohibiting a person from trading futures, engages in futures business, accepting any position such as board member, supervisor, senior manager officer or the chief of a futures business organization, futures trading venue or futures settlement organization for a certain period of time or for his or her life time. Article 151 The administrative penalties described in this Law shall be decided by the futures regulatory authority under the State Council and the department authorized by the State Council according to the rule of division of responsibilities designated by regulations set forth by the State Council. Where there are other provisions in laws and administrative regulations, such provisions shall apply. Article 152 Any staff member of the futures regulatory authority under the State Council or of any department authorized by The State Council who fails to perform his or her duties as prescribed in this Law, abuses his or her power, neglected duty, took advantage of the position to seek illegitimate benefits, or divulged the trade secrets of the relevant unit or individual he or her had come to know, shall be investigated for his or her legal responsibilities according to law. Article 153 Whoever commits an offense against this Law shall be investigated and held liable to the criminal liabilities responsibility according to law. Article 154 Where a person committed an offense against this Law, held liable for civil compensation, paying fines and reimbursing illegal income, in case his or her personal property is not sufficient to fulfil all of his or her legal obligations, priority shall be given to compensate the civil liability first.
Chapter XIII Supplementary Provisions Article 155 This Law shall come into force as of August 1, 2022.
Important Notice: English Edition（Draft only for comments）Translated by China Futures Museum（America liaison office）, June 1, 2022 （The Third Revise） Thank you for your comments and amendments to this English translation of the third edition and we are very appreciated if you could email your suggestions at: w_xue_qin@hotmail.com
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