CFFEX Notice〔2022〕 No.40
All member entities,
To regulate the trading of equity index options contracts, maintain orderly market operations, and protect the legitimate rights and interests of market participants, China Financial Futures Exchange (the “Exchange”) hereby announces the following requirements on the reporting of trading information, which shall come into effect from July 22, 2022.
I. Reporting Threshold for Clients
1. A client with ten (10) or more order submissions per second in a single equity index options contract is required to report relevant information to the Exchange through its carrying futures-company member. The count of order submissions shall be the sum of all buy orders, sell orders and cancellation orders.
2. Orders of the same client shall be aggregated across different futures-company members. Cancellation of orders resulting automatically from FOK/FAK orders shall be included in the count of order submissions. Orders resulting from market making shall be excluded.
II. Reporting Requirements
1. If a client reaches the reporting threshold, the Exchange will notify its carrying futures-company member, who shall then notify the client in a timely manner. The client shall report relevant information to the Exchange through its carrying member to fulfill its reporting obligations and ensure compliance.
2. Information to be reported includes basic client information, software information, trading strategies, and risk control measures, among others. The Exchange may require additional information from the client based on its trading activities and the information already received. Once submitted, relevant information is valid for six (6) months.
3. Futures-company members are required to fill out and upload the Equity Index Options Contracts Trading Information Reporting Form through CFFEX Participant Service Platform within five (5) trading days upon receiving the notice from the Exchange. Uploads made by 3:00 p.m. on each trading day shall be considered as reported on that trading day.
4. A client who reaches the reporting threshold shall provide its futures-company member with a signed or sealed hard copy of the Reporting Form, which shall be retained by the futures-company member for possible future inspection.
5. The Exchange will review the materials submitted by a futures-company member, and may require additional information or explanation if such materials are considered incomplete or dubious. In this case, the futures-company member shall make a timely re-submission after revision or supplement is made as instructed.
III. Management of Reporting
1. If a client who reaches the reporting threshold fails to report to the Exchange through its futures-company member within five (5) trading days, for the first occurrence, the Exchange will issue an alert via telephone to the client’s carrying member; for the second occurrence, the Exchange will add the client to the regulatory watch list; for the third occurrence or more, the Exchange may take such measures as requiring a written undertaking and suspending the opening of new positions, among others. Serious violations will be handled in accordance with the Measures of China Financial Futures Exchange on Dealing with Violations and Breaches.
2. If a client refuses to provide information, fails to provide information as required, or provides false information, depending on the severity of the circumstance, the Exchange may take such measures against the client as requiring to report on the situation, requiring a cautionary interview, requiring a written undertaking, or suspending the opening of new positions.
3. Futures-company members shall understand the importance of reporting trading information on equity index options, fulfill their management duties, enhance the monitoring of clients’ trading activities in equity index options, and establish mechanisms to prevent, identify, and resolve possible extraordinary situations involving clients’ abnormal trading activities, so as to safeguard the orderly trading of equity index options.
4. If a futures-company member fails to fulfill its duties with diligence, depending on the severity of the circumstance, the Exchange may take such measures as verbal reminder, written astonishment, cautionary interview, or restricting or suspending business activities, among others.
5. The Exchange may adjust the reporting threshold, requirements, method and time of reporting, and the effective date of this Notice based on market conditions.
This Notice shall come into effect on July 22, 2022. The Notice on the Reporting of Trading Information on CSI 300 Index Options (released on December 18, 2019) shall be automatically abolished.