In order to implement the requirements of the CPC Central Committee on “creating a standardized, transparent, open, vigorous and resilient capital market and improving the capital market’s basic regulatory framework” and under the coordinated planning of China Securities Regulatory Commission(CSRC), in 2020 China Financial Futures Exchange (the “Exchange”) initiated a systematic clean-up of the rules and regulations and issued the Notice on Abolishing Several Business Rules of China Financial Futures Exchange on February 10, 2021, which announced 69 abolished business rules to improve transparency and serve the financial futures market.
Since the listing of CSI 300 index futures in 2010, the Exchange has continuously improved and optimized its regulatory framework based on business operations, products and market demands, and has formulated and revised its business rules for several tomes. As of February 10, 2021, the Exchange has formulated 29 rules and relevant implementation rules, 14 guidelines and 147 notices. During the time, due to market development and other reasons, several business rules were abolished, replaced or no longer applicable. In order to adapt to the new environment and requirements of market development and regulation and to clarify the implementation status of the business rules, the Exchange has conducted a comprehensive evaluation and analysis of the existing business rules, abolished the business rules that have been replaced or no longer applicable, and made a list of all the rules that have been abolished this time and previously. The clean-up of business rules will help market participants to have a better understanding of the Exchange’s rule system.
Next step, under the leadership of CSRC and guided by the goal of market-based and law-based development and internationalization, the Exchange will accelerate the pace to build a mature rule system for financial futures market, so as to provide a solid legal foundation for the healthy development of the market.
To strengthen frontline supervision of accounts involving actual control relationship (“actual control accounts”), China Financial Futures Exchange (CFFEX) issues on February 5, 2021 the Measures on the Management of Actual Control Accounts of China Financial Futures Exchange (the “Measures”), which will take effect on February 8, 2021. The Guidelines on the Reporting of Actual Control Accounts of China Financial Futures Exchange (Provisional) will be abolished simultaneously.
Compared with the Guidelines, the Measures are of a higher hierarchy in the CFFEX rule structure. Relevant provisions are also optimized to improve coordination with the China Futures Market Monitoring Center (“CFMMC”) in the management of Actual Control Accounts, strengthen comprehensive management, and further clarify the obligations of futures-company members and clients.
Next, in line with the CSRC's requirements of "Four Awes" and "One Synergy", CFFEX will continue to improve its rules and maintain a zero-tolerance policy against violations and breaches, while avoiding interference in normal market activities. CFFEX is committed to fulfilling its duties of frontline supervision, promoting a safe and stable financial futures market and continuously enhancing supervisory effectiveness, so as to further facilitate the functioning of the financial futures market.
“The First Symposium on the Development of Financial Futures Market”, hosted by China Financial Futures Exchange (CFFEX), came to a successful conclusion a few days ago. Against the backdrop of global economic turmoil, this symposium on China’s financial derivatives market however received strong support and active participation from experts and scholars from universities, research institutions and market organizations. After anonymous review, 40 winning papers were announced (see the below table).
CFFEX would like to extend its warmest congratulations to the winning authors! In the future, the Exchange will further promote in-depth research on China’s financial derivatives market under the New Development Principle, and enhance financial derivatives market growth to better serve the national strategy and real economy.
|First Prize||Options Trading and the Cross-Listed Stock Returns: Evidence from Chinese A-H Shares||School of Economics, Zhejiang University||Xingguo Luo|
|A Study on the "Riddle of Pricing" of 50 ETF Options Based on Shanghai Stock Exchange||Dongbei University of Finance and Economics||Yongdong Shi|
|The Informational Role of Option Trading: Evidence from SSE 50ETF Options in China||Wudaokou School of Finance, Tsinghua University||Teng Ma|
|The Impact of Investor Sentiment on the Relationship between CSI 300 Stock Index and Index Futures||School of Economics, Beijing Institute of Materials||Chen Liu|
|Second Prize||A Study of the Extreme Risk Spillover Effect and Early Warning Effect of Stock Index Futures on the Spot Market||School of Economics and Management, Agricultural University of China||Wenchao Liu|
|The Comparability of the U.S.-China Regulatory Regimes in the Futures—A Prerequisite for U.S. Persons to Access the Chinese Futures Exchanges||Georgetown University, US||Jie Yang|
|The Administrative Law Enforcement and Reconciliation of Securities and Futures: Elements Deconstruction and Institutional Reconstruction||Beijing Institute of Financial Derivatives||Jianwei Chen|
|Extreme Market Sentiment Study, Risk Measures and Assistant Investment Management||Jiangxi Ruiqi Futures Company||Jianhui Yang、Rong Yi|
|Nonparametric Option Pricing with Multidimensional Non-arbitrage Constraints||School of Statistics and Mathematics, Zhongnan University of Economics and Law||Qing Li|
|Research on High Frequency Trading Regulation||Xiangcai Securities Institute||Yinqi Zhang|
|Third Prize||The Nature and Role of Financial Derivatives Trading||China Financial Futures Exchange||Shi Sha|
|Experience and Lessons from the International Development of Foreign Exchange Futures Market||Dongfureng Institute of Economic and Social Development, Wuhan University||Zhe Jiang|
|Volatility Spillover Effect of Implied Forward Interest Rate on the Risks of Commercial Banks||School of Economics and Management, Northeastern Normal University||Zhiyang Liu|
|Research on the Information Transmission Mechanism between Stock Index Futures Market and Spot Market||East Securities Derivatives Institute||Xiaohui Li|
|The Application of the China Government Bond Futures in International and Domestic Commercial Banks and Insurance Institutions||Guangfa Futures Company||An Hu|
|The Application of Financial Derivatives on the Investment of Insurance Capital Equity||East Securities Derivatives Institute||Sheng Xie|
|A Discussion on Perfecting the Adjustment Scope of Futures Law in China||Foreign Exchange Division, China Financial Futures Exchange||Daoyun Liu|
|A Study on the Mechanism of How China Government Bond Futures Promoting the Transformation of Monetary Policy under the New Reality||School of Accounting, Shanghai University of Finance and Economics||Chao Huang|
|The Experiences of Overseas Insurance Institutions’ Participation in the Interest Rate Derivatives Market||Trading Division, China Financial Futures Exchange||Fei Zhang|
|An Analysis on the Price Discovery Function of Domestic Financial Derivatives Market during the Epidemic period||Department of Actuarial Science, University of Illinois, Urbana-Champaign||Lijie Hou|
|Recognition Prize||Speed up the establishment of foreign exchange futures market and improve the modern futures market system||Hongye Futures Company||Huiqian Zhang|
|Risk Premium Analysis of Offshore Foreign Exchange Options||Nanhua Futures Company||Ying Wang|
|Financial Derivatives and Global Capital Competition||China Financial Futures Exchange||Shi Sha|
|The Impact of Coronavirus on China's Financial Futures Market||Maike Futures Company||Jinjin Rong|
|Developing the Foreign Exchange Derivatives Market and Promoting the RMB Exchange Rate Reform||Zhongxin Futures Company||Jing Zhang|
|A Study on Price Discovery and Volatility Overflow of China Stock Index Futures Based on Epidemic and Non-epidemic Period||Shenzhen Securities Information Co., Ltd||Huiting Liu|
|International Experience and Lessons of How to Use Interest Rate Derivatives in Pensions||Huaan Futures Company||Xiaojun Cao|
|The Evaluation of Using Financial Futures in Risk Management of Fund Products||Zhongxin Futures Company||Ge Zhang|
|The Innovation of China Government Bond Options and the Functioning of Bond Market Under the Background of Interest Rate Liberalization||Options Division, China Financial Futures Exchange||Xin Yu|
|Research on the Application and Prospect of China Government Bond Futures in Commercial Banks||Bank of China Shanghai Headquarters Financial Markets, Bank of China||Meilin Ye|
|How effective is the RMB Market Sentiment Index?||Nanhua Futures Company||Chaosheng Dai|
|The Promotion and Influence of Stock Index Futures on the Real Economy from the Perspective of Equity Financing Risk Management||Yide Futures Company||Chang Chen|
|Does Our Market Need High Frequency Trading? —— Let History Tell the Future||Institute of International Finance and Trade, Shanghai Foreign Studies University||Lu Li|
|The Legal Regulation of "Too Big to Fail" CCP in the Context of Center Clearing of OTC Derivatives||School of Economics, Southwest University of Political Science and Law||Qian Liu|
|The Performance and Function of Financial Futures Options Market in the Coronavirus Pandemic||Wukuang Jingyi Futures Company||Yixing Wang|
|Futures Industry Association (FIA) Paper on the Necessity, Path and Related Issues of Opening the Financial Futures Market||FIA||-|
|The Performance and Price Discovery Function of Stock Index Futures Market in the Coronavirus Pandemic||Lu Securities Futures Institute||Weiyan Song|
|The Market Performance and Functioning of Financial Futures Options during the Epidemic Period||Haitong Futures Company||Liwei Tao|
|The Application Analysis of Foreign Exchange Derivatives||Tonghui Futures Company||Jian Zhang|
|Commercial Banks' Participation in the China Government Bond Futures Market Serves the Real Demands||Xinhu Futures Company||Mingyu Li|
On July 15, 2020, China Financial Futures Exchange (CFFEX) signed a strategic cooperation agreement with Shanghai Pudong Development Bank (SPD Bank).
“To implement the major strategic decisions of the CPC Central Committee, CFFEX is striving to make progress in developing China’s financial futures market and building Shanghai into an international financial center. Founded in Shanghai, SPD Bank has been dedicated to the healthy development of China’s financial market since its inception. Through this agreement, CFFEX and SPD bank will explore mutually beneficial Win-Win cooperation through complementary development between the financial futures market and other financial factor markets.” a CFFEX official said.
Next, following the principles of "integrity, equality, reciprocity, long-term cooperation and common development", CFFEX and SPD Bank will carry out close and pragmatic cooperation in business innovation, customer service, international development and joint party building, in order to jointly promote the well-functioning and steady development of the financial futures market, and serve the real economy at greater depth and breadth.
The European Securities and Markets Authority (ESMA) recently published an updated opinion on post-trade transparency under MiFID II and MiFIR and its annexed list covering the post-trade transparency assessment results of 136 third-country trading venues (TCTVs) (https://www.esma.europa.eu/press-news/esma-news/esma-updates-transparency-and-position-limit-opinions-3rd-country-venues). Based on its assessment, ESMA has concluded that China Financial Futures Exchange (CFFEX) meets all the relevant criteria and is therefore added to the positive list concerning TCTVs post-trade transparency assessment. European Union investment firms concluding transactions on TCTVs included in the positive list are relieved from the obligation to make those transactions post-trade transparent via an approved publication arrangement (APA).
In recent years, under the leadership of the CSRC, CFFEX has been benchmarking itself to international principles and best practices, and continuously improving its capability to serve investors at home and abroad. Next, CFFEX will continue to follow the latest international standards and enhance its global influence, thus contributing to the development of the international financial center in Shanghai and the further opening-up of China’s financial market.