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China Securities Regulatory Commission Issues Administrative Measures for Supervision of Derivatives Trading to Prevent Market Risks
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The China Securities Regulatory Commission (CSRC) has issued the "Administrative Measures for the Supervision and Administration of Derivatives Trading (Trial)", further clarifying the primary institutional rules of the derivatives market. The Measures are of significant importance in regulating derivatives trading activities, preventing risks in the derivatives market, promoting the steady, healthy and orderly development of the derivatives market, and protecting the legitimate rights and interests of traders. They will also help further leverage the positive role of derivatives trading in risk management, resource allocation, and serving the real economy. The Measures set out provisions covering derivatives trading and settlement, derivatives traders, derivatives operating institutions, derivatives market infrastructure, supervision and administration, and legal liabilities. Key aspects include clarifying the scope of regulation; defining the functional positioning of the derivatives market in risk management, resource allocation, and serving the real economy; specifying the basic principles that all parties participating in derivatives trading and related activities must follow, and prohibiting illegal or non-compliant conduct through derivatives trading; standardizing derivatives trading and settlement; strengthening investor protection by clarifying suitability standards and imposing real-name account requirements for derivatives trading. In addition, the Measures enhance supervision of derivatives operating institutions by specifying internal control and risk management requirements. Securities firms and futures companies applying to conduct derivatives trading business must meet administrative licensing conditions, including maintaining net capital of not less than RMB500 million for the most recent six consecutive months. The CSRC may, in accordance with prudent regulatory principles, adjust the minimum net capital requirement, leaving room to impose higher standards on relevant institutions based on regulatory needs. The Measures also strengthen supervision of derivatives market infrastructure and clarify supervisory responsibilities and legal liabilities. The Measures will come into effect on November 16 this year. From the implementation date, all relevant entities engaging in derivatives trading and related activities must comply with the Measures. Non-compliant entities are prohibited from undertaking new business, and existing business must be wound down upon maturity. Specific arrangements for administrative licensing of derivatives trading business will be further clarified by the CSRC separately. (jl/da) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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