Futures in China
Introduction 2014-06-23
The Zhengzhou Commodity Exchange (ZCE) is the first experimental futures market approved by the State Council. Being one of the four futures exchanges in China, the ZCE is under the vertical management of China Securities Regulatory Commission.
The ZCE performs its functions according to Futures Trading Management Ordinance, Futures Exchanges Regulation and implements self-regulation in accordance with Zhengzhou Commodity Exchange Constitution, Zhengzhou Commodity Trading Rules. The ZCE abides by the principle of openness, fairness, justness and good faith, provides a marketplace with associated facilities and services for the futures trading and regulates the futures trading.
The ZCE adopts membership system. The General Meeting is the governing body of the Exchange and consists of all members. Being the standing body of the General Meeting, the Board of Directors has seven special committees, including Supervision Committee, Trading Committee, Delivery Committee, Finance Committee, Intercession committee, Member Qualification Examination Committee and Technology Committee. At the end of 2009, 215 members, coming from 27 provinces, municipalities and autonomous regions in China, had been registered. Among the total, futures company member (173) accounts for 80%, non-futures company (42) accounts for 20%.
The General Manager is the legal representative of the Exchange. According to the needs of business, the ZCE sets up 16 inner departments, including General Office, R&D Department, Marketing Department, Marketing Department, Trading Department, Delivery Department, Clearing Department, Market Surveillance Department, Media Relations and Information Department, Legal Affairs Department, IT Department, IT Department , Finance Department, HR Department, Internal Audit Office and Administration Department.
The ZCE adheres to standardized operation, strengthens the market surveillance, safely organizes the futures trading and deepens the market functions. At present, the functions and roles of the listed products on ZCE in promoting the economic development of the related industries have been recognized by all sectors of the society. The listed products on ZCE includes wheat (involving strong gluten wheat and hard white winter wheat), cotton, white sugar, pure terephthalic acid, rapeseed oil and early long-grain nonglutinous rice.
The ZCE carries out some futures trading systems such as Margin Requirement System, Daily Price-limit System, Mark-to-the-market System, Physical Delivery System and so on. It actively adapts to market demands, Constantly optimizes system arrangements, updates regulatory philosophy, enriches regulatory means, controls and resolves market risks timely and ensures the market operates smoothly.
The ZCE has fully functional electronic system, including trading, settling, delivery, risk control, news release, member services and so on. The transaction order may be directly input by the members and investors through the internet and the long-distance transaction system. The information of trading on ZCE has been released through Reuters, Bloomberg, Shihua and so on. The ZCE pays great attention to international communion and cooperation with the foreign futures exchanges. It joined the International Options Market Association in 1995 and signed the Memorandum of Understanding successively with Kansai Agricultural Commodity Exchange, Chicago Mercantile Exchange, Tokyo Grain Exchange, Multi-commodity Exchange of India, Ltd., Montreal Exchange, Abuja Securities and Commodity Exchange and NYSE Euronext Group. The ZCE establishes information exchange mechanism with 8 exchanges and institutions, exchanges market information regularly, further expands influence of ZCE in international market.
Adhering to the principle of openness, fairness and justness and unswervingly keeping to the road of scientific development as core concept, keeping honesty, aggressiveness, security and efficiency as basic purpose, bringing market functions serving real economy into full play as direction, ZCE will strengthen the construction of the market-based fundamental systems, perfect risk prevention mechanism, reinforce market front-line supervision, guarantee the safety of information technology systems, keep to improving the market performance quality and development quality and work hard to make ZCE an modernized futures exchange with importance and influence both in the internal and international markets.