To further improve self-regulation in the financial futures market and strengthen the investigation and handling of violations and breaches, China Financial Futures Exchange (CFFEX) released the amended Measures of China Financial Futures Exchange on Dealing with Violations and Breaches (the “Measures”) on November 19, which improved and adjusted provisions on application scopes, violation acts, and handling measures. The Measures will take effect on the day of release.
The investigation and handling of violations is critical to maintaining an orderly financial futures market, protecting the legitimate rights and interests of investors, and ensuring market functioning. In recent years, under the guiding principles of building a comprehensive rules and regulations system, non-intervention of normal market activities, and zero tolerance for violations, CFFEX has dealt with a number of violations that disrupt market order such as pre-arranged trades and spoofing, and achieved positive results. This year, in response to the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law printed and issued by the General Office of the CPC Central Committee and the General Office of the State Council, CFFEX has taken multiple measures to strengthen the investigation and handling of violations in the financial futures market under the leadership of the China Securities Regulatory Commission (CSRC).
The amendments of the Measures include: (1) expanding the scope of application by expressly include other market participants such as market makers; (2) supplementing and improving provisions on specific violation acts; members’ breach of member management rules and trading limit, and market makers’ breach of market-making, information management, or system management rules, and acts that damage the reputation of CFFEX and disrupt orderly trading by various means are newly identified as violations; provisions on acts that affect trading order and violate position management rules are improved; and provisions on acts that violate Actual Control Accounts management rules are further clarified; (3) modifying and adjusting self-regulatory measures to effectively raise the cost of violations; and (4) improving the remedy procedures and revising provisions on ruling and enforcement, and dispute mediation.
Next, under the leadership of the CSRC and in line with the CSRC’s requirements of “Four Awes and One Synergy”, CFFEX will continue to perform frontline supervisory duties by cracking down on violations in the financial futures market, so as to maintain a fair, impartial, and orderly market and protect the legitimate rights and interests of investors.
