Since DCE's palm olein futures were identified as a specific domestic product, it has attracted close attention from domestic and foreign markets. Clients who can participate in the trading and delivery of DCE palm olein futures, and whether overseas brokerage institutions can provide overseas traders with brokerage services for trading DCE palm olein futures has become the focus of heated discussions in the market. In this regard, the relevant person in charge of DCE explained the relevant rules for introducing foreign traders to participate in palm olein futures.

According to reports, DCE's introduction of foreign traders to participate in palm olein futures uses the current methods of specific domestic varieties such as iron ore (888, 9.50, 1.08%) in terms of trading, settlement, and risk control. Regarding the delivery system, the current handling of individual customers’ positions held in the delivery month will not be changed, and relevant regulations have been added that corporate customers who cannot receive or issue value-added tax invoices cannot deliver. In this regard, the person in charge said that if the unit customer cannot issue or receive value-added tax invoices, it will break the value-added tax deduction chain and increase the counterparty's delivery cost. In order to effectively protect the rights and interests of traders and maintain fairness and justice in the market, this provision has been added to the relevant rules for introducing foreign traders to participate in palm olein futures.

In order to clarify the qualifications of customers to participate in the delivery, DCE has added a verification link for the delivery qualifications of domestic and foreign corporate customers, which will be implemented on the date of implementation of the rules. The specific requirements are that corporate customers who have participated in the delivery of DCE palm olein futures before December 2020 (including) can directly participate in the delivery without submitting qualification certificates; those who have not participated in the delivery of DCE palm olein futures, if corporate customers have delivery requirements, they can provide legal and valid qualification certificates to the exchange through members when they submit the application for standard warrants EFP or before 14:30 of the one-time delivery and settlement date. Corporate customers who have not submitted their qualification certificates within the specified time and are matched under the one-time delivery process shall be deemed not qualified to receive or issue value-added tax invoices, and shall be handled in accordance with the relevant provisions of “Measures for the Dalian Commodity Exchange Delivery Management”. In addition, in order to ensure that customers with delivery requirements can submit delivery qualification certificates in a timely manner, the exchange will remind customers who do not have delivery qualifications through before entering the delivery month and before the last trading day.

DCE will also take corresponding measures for corporate clients who violate the above regulations. The rules require that the positions of customers of palm olein futures contracts that cannot receive or issue value-added tax invoices are matched under the one-time delivery process. The exchange will calculate 20% of the contract value at the delivery settlement price after the market closes on the delivery day. The fine is paid to the other party. If both parties to the match are non-deliverable customers, the Exchange will impose a fine of 20% of the contract value calculated on the delivery settlement price on both parties, and no longer pay the other party.

After the introduction of foreign traders, foreign brokerage institutions can provide foreign traders with brokerage services for trading DCE palm olein futures, but they should also comply with the relevant rules of the exchange. Therefore, DCE also conducts business rules for palm olein products. Correspondingly, overseas brokerage institutions have been revised and added as market participants who shall comply with the "Detailed Rules for the Palm Olein Futures Business of Dalian Commodity Exchange".

Market participants said that palm olein futures is one of the agricultural products that DCE can perform best. Participants such as industrial enterprises and institutional investors are relatively mature, and the rules and systems for trading, clearing, risk control, and delivery are relatively complete. This rule revision has made better institutional preparations for the introduction of foreign traders to participate and laid a solid institutional foundation for opening up. (Sina Finance)