The first special law in the futures industry brings multiple benefits
Recently, the 34th meeting of the Standing Committee of the 13th National People's Congress voted and passed the "Futures and Derivatives Law of the People's Republic of China" (hereinafter referred to as the "Futures and Derivatives Law"), which will come into force on August 1 this year. .
This is China's first special law to regulate futures trading and derivatives trading.
The relevant person in charge of the China Securities Regulatory Commission said that the "Futures and Derivatives Law" is based on the actual situation of the futures market and derivatives market, and has raised the mature and reliable system that has been tested in practice into law, consolidating the achievements of reform and development, and at the same time accurately grasping the market development trend , carry out some major institutional reforms forward-looking, and reserve sufficient institutional space for market innovation and development.
Consolidate the institutional foundation of the futures market
Since the Zhengzhou grain wholesale market piloted futures trading in 1990, China's futures market has grown from nothing to a large one, with continuous improvement of the variety system, steady expansion of the market scale, and gradual increase in international influence.
By the end of 2021, the number of listed futures options has reached 94, including 84 commodities, covering many important fields related to the national economy and people's livelihood such as energy, grain, and metals.
In 2021, the trading volume of the national futures market will reach a new record high, and the trading volume ranking of futures exchanges will also rise steadily in the global on-exchange derivatives market.
However, for a long time, China's futures industry has mainly relied on the administrative regulations of the "Futures Management Regulations", and the over-the-counter derivatives market has been regulated by relevant departmental regulations.
This does not match the development of the industry and the market.
The effective functioning of the capital market must be based on a scientific and complete legal system.
By the end of 2021, there will be about 2,000 laws, administrative regulations and regulatory documents, judicial interpretations and policy documents, regulations and normative documents related to the capital market, covering various aspects, and generally achieving a law to abide by and rules to follow follow.
Yi Huiman, chairman of the China Securities Regulatory Commission, said that the introduction of the "Futures and Derivatives Law" "effectively filled the gap in the construction of the rule of law in the capital market, and the 'four beams and eight pillars' of the legal system in the capital market have been basically completed."
According to reports, the "Futures and Derivatives Law" has 13 chapters and 155 articles, and has made institutional arrangements to promote the functioning of the futures market.
First of all, it is clearly stipulated that the state supports the healthy development of the futures market, and exerts the functions of market price discovery, risk management and resource allocation, and encourages real enterprises to use the futures market to engage in risk management activities such as hedging, and explicitly implements the position limit exemption for hedging.
Secondly, it is specially stipulated that measures should be taken to promote the development of the agricultural product futures market and the derivatives market, and guide the production and operation of domestic agricultural products.
Third, establish a market-oriented product listing mechanism, stipulate the basic conditions for product listing in principle, optimize product listing procedures, enrich futures varieties, improve product structure, and expand the business scope of futures companies. and other business.
"In recent years, the domestic derivatives market has developed rapidly and has great potential, but at the same time, it is characterized by high complexity and difficulty in supervision. In order to effectively prevent and resolve financial risks, it is necessary to implement the requirements that all financial activities should be included in supervision. It is of great significance to impose principled constraints on the derivatives market." The relevant person in charge of the China Futures Association said that the "Futures and Derivatives Law" provides a solid legal guarantee for the healthy development of the futures and derivatives market, and is also conducive to a better futures market. Give play to the three functions of "discovering prices, managing risks, and allocating resources".
Ushering in a new starting point for standardized development
All parties in the market have given positive comments on the significance of the introduction of the Futures and Derivatives Law.
——It not only learns from international best practices, but also fully reflects the characteristics of the Chinese market, which will help give full play to the resource allocation function of the market.
Xu Danliang, president of Founder Mid-Term Futures Co., Ltd., told our reporter that a well-functioning futures market with international influence can provide pricing, hedging and risk management for more energy, agricultural products, precious metals, and core financial assets.
Xu Danliang said, on the one hand, the "Futures and Derivatives Law" fully absorbs the consensus reached at the G20 Pittsburgh Summit, draws on international best practices, and provides regulations for the supervision of the futures market and important financial infrastructure.
On the other hand, the law confirms at the legal level the real-name account system, margin monitoring, "five-in-one" supervision and other regulatory systems with Chinese characteristics that have been explored in the development of China's futures market for more than 30 years.
"This further consolidates the foundation for the construction of the rule of law in the capital market, clarifies the main line of serving the development of the real economy, and prevents from deviating from the real to the virtual and financial idling." Xu Danliang said.
——It is conducive to expanding opening up and enhancing China's right to speak in international commodity pricing.
Zhou Xin, a partner at King & Wood Mallesons, believes that China is a major buyer of global commodities, but has a weak voice in the international pricing of commodities, which is largely related to the low level of internationalization of China's futures market.
"Overseas investors attach great importance to the level of laws and regulations in the supervision of the futures market. In the past, the situation of 'there are only regulations and rules, no special laws' has invisibly increased the risk of China's futures market in the minds of overseas investors. Therefore, domestic and foreign investors have been looking forward to China's futures and derivatives industry has an exclusive basic law. The promulgation of the "Futures and Derivatives Law" provides a solid legal foundation for China's futures market to further integrate with international standards. It is foreseeable that the internationalization of the futures market Development will enhance China's right to speak in international commodity pricing." Zhou Xin told this reporter.
——Further standardizing the behavior of futures business institutions will promote China's futures companies to become bigger and stronger.
In the opinion of Ma Wensheng, chairman of Xinhu Futures Co., Ltd., the passage of the "Futures and Derivatives Law" marks that China's futures market has ushered in a new starting point for standardized development, which has brought multiple benefits to the entire market and the real economy.
Ma Wensheng told this reporter that the promulgation of the "Futures and Derivatives Law" means that domestic futures operating institutions have greater responsibilities and higher compliance requirements for operation, "This will help futures operating institutions to further strengthen their own Manage, enhance professionalism and service capabilities.”
Better serve the real economy
Economy is the body, finance is the blood, and the two coexist and prosper.
The "Futures and Derivatives Law" clarifies the legislative principles for serving the real economy, restricts excessive speculation, and encourages real enterprises to use the futures market to engage in risk management activities such as hedging. The ability to serve the real economy.
In the past few days, relevant exchanges and market players have expressed that they will serve the real economy and improve their own business in combination with the content of the "Futures and Derivatives Law".
Some focus on "agriculture, rural areas and farmers", actively designing new varieties and launching new services.
The relevant person in charge of Zhengzhou Commodity Exchange told this reporter that Zhengzhou Commodity Exchange has listed 14 futures varieties and 3 options varieties in the agricultural field, accounting for 51.85% of all agricultural futures varieties in China, covering grain, cotton, oil, sugar, fruit and other fields.
The Futures and Derivatives Law has brought new development opportunities for agricultural futures and derivatives.
"For example, in recent years, the price of oil and oil has fluctuated greatly, and the market players in the peanut and rapeseed oil industry are facing great uncertainty in production and operation. We have launched options for peanut and rapeseed oil, which form a synergy with the existing futures options and become the main body of the relevant industry. Provide more abundant, refined and flexible risk management tools and strategies. For another example, on April 22, we launched the 2022 'insurance + futures' pilot to improve the ability of new agricultural business entities such as agriculture-related enterprises and farmers' professional cooperatives to resolve market risks. ability." The person in charge introduced.
Some focus on the energy sector to help enterprises improve their risk management level and ability to ensure supply.
The relevant person in charge of Dalian Commodity Exchange said that it will strictly follow the listing conditions stipulated in the "Futures and Derivatives Law", and launch more futures varieties that meet the needs of the national economy.
On April 26, DCE and Sinochem Energy Co., Ltd. signed a strategic cooperation agreement to jointly promote the research and development of energy derivatives, delivery warehouses, market cultivation and other aspects, including research and establishment of on-site and off-site delivery warehouses, increase Expand the delivery brand to facilitate the in-depth participation of relevant companies in futures and options hedging, physical delivery, etc.; promote the research and development and market research and demonstration of energy derivatives such as sulfur, petroleum coke, and pure benzene.
Some focus on strengthening their own management and operation level.
Zhang Zhen, general manager of Tianfeng Futures Co., Ltd., said that at present, China's futures operating institutions have a situation of strong business unity and serious homogeneous competition.
The "Futures and Derivatives Law" has added futures market-making transactions to the scope of business, which is conducive to futures business institutions to expand their business scope.
"In recent years, we have formed strong research capabilities in the six major sectors of energy and chemical industry, non-ferrous metals, and agricultural products. The development of brokerage business has also reached new highs, and the scale of customer rights and interests has exceeded 10 billion yuan. Next, we will innovate risk management. tools to provide escort services for customers in the non-ferrous metals and other related industrial chains." Zhang Zhen told this reporter.
The relevant person in charge of the China Securities Regulatory Commission said that the next step will be to earnestly study and implement the "Futures and Derivatives Law", continuously improve the level of supervision and law enforcement, and give full play to the "Futures and Derivatives Law" in promoting market reform, maintaining market order, and promoting market functions. Play an active role in other aspects to better serve the high-quality development of the real economy.
Wang Junling