The legal system standardizing and adjusting the rights and obligations of all futures market participants constitute the legal framework of China’s futures market. In terms of legal force, so far, there has been no code of futures especially and systematically regulating and adjusting the rights and obligations of all futures market participants and formulated by China’s highest legislature National People’s Congress (NPC) and its Standing Committee. Relevant content in the “General Principles of Civil Law”, the “Company Law”, the “Contract Law”, the “Criminal Law” and other laws standardizes and regulates the futures market from different aspects.
The system of China’s futures laws and regulations is comprised of the administrative regulations formulated by the State Council and the departmental rules established by the China Securities Regulatory Commission (CSRC), the competent authority of China’s futures market. The “Provisional Regulations on Administration of Futures Trading” (Regulations) published by the State Council in 1999 is administrative regulations standardizing the futures market in a systematic manner and will become the foundation for formulating the “Futures Law” in future after further amendment and perfection according to the development of futures market. The “Regulations” reiterates the centralized and unified management mode of futures market and clarifies the regulatory status of the CSRC in centralized and unified management of futures market.
To implement the “Regulations”, the CSRC, the regulator of futures market, formulated the supporting “Measures on Futures Exchange Management”, the “Measures on Administration of Futures Brokerage Companies”, the “Measures on Administration of Qualification of Futures Practitioners” and the “Measures on Administration of Qualification of Senior Managerial Personnel of Futures Brokerage Companies” (all of which were revised in 2002), and developed the “Measures on Administration of Overseas Hedging Business of State-owned Enterprises” together with the former State Economic and Trade Commission and Ministry of Foreign Trade and Economic Cooperation, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange, thus forming a complete laws and regulations system for all parties and links of futures market.
Besides, the judicial interpretations released by the Supreme People’s Court play an indirect regulatory role for futures market. The “Regulations on Issues concerning Hearing of Futures Dispute Cases” (Fa Shi [2003] No. 10; hereinafter shortened as “Judicial Interpretation for Futures”) released in June 2003 is the most systematic judicial interpretation for futures at present and plays a crucial regulatory role on futures market.
Moreover, in terms of self-regulation, the trading rules and self-regulatory rules established by futures associations and exchanges are an integral part of the system of laws and regulations of futures market.
This column is based on the contracts and exposure drafts of relevant rules and subject to the changes of the contracts and relevant rules officially announced. The content of this column is only for the purpose of introducing the basic knowledge of stock index futures and can not be regarded as the basis for investment decision. The website and the owner of the website shall not bear any responsibility for the losses caused by investment decisions based on the content in this column.
