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(Adopted on January 21, 2019)
This Guide is formulated to help members of the China Financial Futures Exchange (“the Exchange”) and their clients make preparations for using China government bonds (CGBs) as futures margin.
(I) Member Preparation
1. Opening a Dedicated Bonds-As-Margin Account
To use CGBs as futures margin, a member shall open a Dedicated Bonds-As-Margin Account at China Central Depository & Clearing Co., Ltd. (CCDC) in accordance with the CCDC Pledged Bonds Management Services Guide (Services Guide) (see details on CCDC’s website).
2. Applying to CCDC for Eligibility
A member intending to use CGB as futures margin shall inform CCDC of its intent in advance and submit an eligibility application in the manner prescribed in the Services Guide.
3. Reporting to the Exchange the Member’s CGB Depository Account
A member should additionally report to the Exchange the information on the member’s Dedicated Bonds-As-Margin Account by submitting the following materials: (1) CFFEX Member Application Form for Using Securities as Margin (Annex 2-1); (2) a photocopy of the Account Opening Notice issued by CCDC and affixed with the member’s common seal or other supporting materials; and (3) photocopies of the certificates used to open the account affixed with the member’s common seal.
(II) Client Preparation
1. Applying to CCDC for Eligibility
To use CGB as futures margin, a client shall inform CCDC of its intent in advance and submit an eligibility application in the manner prescribed in the Services Guide.
2. Reporting to CFFEX the Client’s CGB Account
A client should additionally report to CFFEX the information on its depository account for using CGBs as futures margin by submitting the following materials through its carrying member: (1) CFFEX Client Application Form for Using Securities as Margin (Annex 2-2); (2) a photocopy of the Account Opening Notice issued by CCDC and affixed with the client’s seal or other supporting materials; (3) photocopies of the certificates used to open the account affixed with the client’s seal; and (4) other materials required by CFFEX.
II. Deposit and Withdrawal of CGBs
Before depositing or withdrawing any CGBs, a client shall submit to the Exchange a duly completed CFFEX Application Form for Securities Deposit and Withdrawal (Annex 2-3) through its carrying member. CGBs shall be collateralized and released according to the procedures provided in the Services Guide.