December 11, 2020, China Financial Futures Exchange (CFFEX) releases the Detailed Clearing Rules of China Financial Futures Exchange (Amended) and the Guidelines of China Financial Futures Exchange on Using China Government Bonds as Margin (Amended). The amended rules will take effect on December 14, 2020.

Since China government bonds (CGBs) was accepted as margin by CFFEX nearly six years ago, relevant business operation has been running smoothly, the market scale has been growing steadily, and the transaction cost has been effectively reduced, all of which has been widely acknowledged by various parties in the market. In order to strengthen the risk management framework against default, under the overall guidance of the China Securities Regulatory Commission (CSRC), and after extensive researches, consultations and studies, CFFEX further improves the disposal mechanism of CGBs posted as margin to better suit the tiered-settlement system of the financial futures market. The disposal mechanism is not only a guarantee measure against default or to enhance efficiency, but also an improvement on the Exchange’s clearing rules regarding CGBs as margin.

After officially implements the revised detailed clearing rules and business operation guidelines, CGBs could be disposed by auctions, negotiated sale and regular sale through the collateral disposal platform of China Central Government Securities Depository and Clearing Co., Ltd. The industry believes that it will significantly improve the disposal efficiency of CGBs posted as margin and enhance CFFEX's ability to quickly and effectively deal with default risk of Clearing Members.

Next, CFFEX will continue to fully implement the CSRC’s principle of "Four Awes" and "One Synergy", improve the relevant rules and market operational efficiency, optimize market services, enhance risk management capabilities, cooperate with all parties in the market to further promote the coordinated development of the financial market, and effectively serve the real economy.