Provisions on the Classified Supervision of Futures Companies (2019 Amendment)

Provisions on the Classified Supervision of Futures Companies

(Issued by the Announcement No. 9 [2011] of China Securities Regulatory Commission on April 12, 2011; revised in accordance with the Decision to Amend the Provisions on the Categorized Supervision and Administration of Futures Companies on February 15, 2019)

Chapter I General Provisions

Article 1 These Provisions are developed in accordance with the relevant provisions of the Regulation on the Administration of Futures Trading and the Measures for the Supervision and Administration of Futures Companies, for the purposes of effectively conducting supervision and administration of futures companies, directing futures companies to focus on their principal business, conduct business operation in accordance with laws and regulations, develop steadily, and grow better and stronger, and comprehensively enhancing the service capability and competitiveness of the futures sector.

Article 2 The classification of futures companies refers to the evaluation and determination of the classes of futures companies according to these Provisions on the basis of their risk management capability and in light of their capability of serving the real economy, market competitiveness and status of continuous compliance.

Article 3 The China Securities Regulatory Commission (CSRC) shall, according to the market developments and the principle of prudential supervision, formulate and timely adjust the evaluation indicators and standards for the classification of futures companies after soliciting the opinions of the futures sector and other relevant parties.

Article 4 The CSRC shall organize the categorized evaluation of futures companies under the principles of compliance with laws and regulations, objectivity and impartiality. Local CSRC offices, all futures exchanges, the China Futures Market Monitoring Center and the China Futures Association shall perform their work duties in accordance with these provisions under the guidance of the CSRC.

Article 5 The CSRC shall establish a Review Committee for the Classified Supervision of Futures Companies (hereinafter referred to as the “Review Committee”) responsible for review and other matters.

The review committee shall consist of relevant members of the CSRC, all futures exchanges, the China Futures Market Monitoring Center and the China Futures Association. The formation methods, organizational structure, work procedures and rules of procedures of the review committee shall be prescribed by the CSRC separately.

Article 6 The staff involved in the classification evaluation of futures companies shall have the corresponding professional quality, business skills and supervision experience, stick to principles, be honest and unselfish, and diligently perform their duties.

Article 7 The CSRC and its dispatched offices shall, according to the results of classification, reasonably allocate regulatory resources, and apply different regulatory policies to different classes of futures companies.

The classification evaluation shall not replace the regulatory measures of the CSRC and its dispatched offices.

Chapter II Evaluation Indicators

Article 8 The risk management capability of a futures company shall be mainly evaluated based on six evaluation indicators, including corporate governance, internal control, capital management, business management, client management, and information technology management, according to the Indicators and Standards for the Evaluation of the Risk Management Capability of Futures Companies (see the Annex), so as to reflect the capability of the futures company to manage and control various kinds of risks.

Article 9 The futures company's capability to serve the real economy shall be mainly evaluated based on industry services provided by the futures company during the evaluation period, including the following content:

(1) Insurance + futures” business scale;

(2) Daily average positions held by institutional clients;

(3) Other evaluation content recognized by the CSRC.

Article 10 The market competitiveness of a futures company shall be mainly evaluated based on the business scale, cost management capability, profitability, and other aspects of a futures company during the evaluation period, including the following content:

(1) Total daily average clients' equity after weighting adjustment;

(2) Futures business income;

(3) Net profits;

(4) Cost management capability;

(5) Return on equity; and

(6) Daily average derivative equity of asset management products.

Article 11 The status of continuous compliance of a futures company shall be evaluated mainly by the violations committed by the futures company during the evaluation period, disciplinary actions taken by the self-disciplinary organization of the securities and futures sector, regulatory measures taken or administrative punishments given by the CSRC and its dispatched offices and criminal punishments given by the judicial organs.

Chapter III Evaluation Methods

Article 12 The benchmark score of a futures company in normal operation shall be 100 points. The evaluation score of a futures company shall be determined by adding certain points to or deducting certain points from the benchmark score according to the evaluation indicators and standards for the risk management capability, capability of serving the real economy, market competitiveness, and status of continuous compliance status, etc. of the futures company.

Article 13 Where the six evaluation indicators of risk management capability of a futures company, including corporate governance, internal control, capital management, business management, client management and information technology management, fail to meet the specific evaluation standards, 0.5 point shall be deducted per item.

Where a futures company receives a prior notice of administrative penalty, is subject to case investigation for any suspected violation of law or regulation, or has any risk event, which has a serious impact and reflects the company's problems in the aforesaid evaluation indicators, points shall be deducted according to specific evaluation standards.

Article 14 With respect to the capability of a futures company to serve the real economy, corresponding points shall be added under the following principles:

(1) If its “insurance + futures” business scale ranks among the top 10%, 10% to 20%, 20% to 30%, 30% to 40%, 40% to 50% or 50% to 60% among companies participating in the evaluation of this indicator, 2 points, 1.5 points, 1 point, 0.75 point, 0.5 point, or 0.25 point shall be added respectively, 0.1 point shall be added for other companies participating in the evaluation of this indicator, and the review committee shall determine the scope of futures companies participating in the evaluation based on the overall implementation of the “insurance + futures” business in the current year;

(2) If it ranks among the top 5, or from 6 to 10, 11 to 20, 21 to 30, 31 to 40, or 41 to 50 in the sector in terms of daily average positions held by institutional clients, 2 points, 1.5 points, 1 point, 0.75 point, 0.5 point or 0.25 point shall be added respectively;

The CSRC shall, according to the circumstances of the futures company in serving the real economy, increase the evaluation of the capability to serve the real economy on the basis of soliciting industry opinions.

Article 15 With respect to the market competitiveness of a futures company, corresponding points shall be added under the following principles:

(1) If the futures company ranks among the top 5, or from 6 to 10, 11 to 20, 21 to 30, 31 to 40, 41 to 50, 51 to 60, or 61 to the median in the sector in terms of total daily average clients' equity after weighting adjustment during the evaluation period, 4 points, 3 points, 2 points, 1.5 points, 1 point, 0.75 point, 0.5 point, or 0.25 point shall be added respectively. If the trading position ratio of the futures company during the evaluation period is higher than the median of the entire sector, the aforesaid points to be added shall be halved;

(2) If the futures company ranks among the top 5, or from 6 to 10, 11 to 20, 21 to 30, 31 to 40, or 41 to 50 in the sector in terms of futures business income during the evaluation period, 2 points, 1.5 points, 1 point, 0.75 point, 0.5 point, or 0.25 point shall be added respectively. If the commodity futures and options commission rate or the financial futures and options commission rate of the futures company during the evaluation period is lower than 50% of the average of the entire sector, the aforesaid points to be added shall be halved;

(3) If the futures company ranks among the top 5, or from 6 to 10, 11 to 20, 21 to 30, 31 to 40, or 41 to 50 in the sector in terms of net profits during the evaluation period, 2 points, 1.5 points, 1 point, 0.75 point, 0.5 point, or 0.25 point shall be added respectively;

(4) If the futures company ranks among the top 10, or from 11 to 20, 21 to 30, 31 to 40, or 41 to 50 in the sector in terms of the cost management capability during the evaluation period, 0.5 point, 0.4 point, 0.3 point, 0.2 point or 0.1 point shall be added respectively;

(5) If the futures company ranks among the top 10, or from 11 to 20, 21 to 30, 31 to 40, or 41 to 50 in the sector in terms of the return on equity during the evaluation period, 0.5 point, 0.4 point, 0.3 point, 0.2 point or 0.1 point shall be added respectively;

(6) If the futures company ranks among the top 5, or from 6 to 10, 11 to 15, 16 to 20, or 21 to 30 in the sector in terms of the daily average derivative equity of asset management products during the evaluation period, 1 point, 0.8 point, 0.6 point, 0.4 point or 0.2 point shall be added respectively. If the futures company or subsidiary has any asset management product that fails to comply with regulatory provisions during the evaluation period and fails to complete the rectification or clean-up within the prescribed time, no point shall be added with respect to this indicator.

Where the score of the future company with respect to the indicators of risk management capability and continuous regulatory compliance status of the futures company is lower than the prescribed score, no point shall be added with respect to the indicator of market competitiveness. The prescribed scores shall be determined through deliberation by the review committee based on the evaluation of the current year.

Article 16 Where a futures company falls under any of the following circumstances during the evaluation period, deduction shall be made under the following principles:

(1) If its risk regulatory indicator fails to reach the regulatory standards, 2 points shall be deducted each time. If its risk regulatory indicator reaches the warning standards, 0.5 point shall be deducted each time.

(2) If any major warning on futures margin is verified to be caused by the futures company, 1 point shall be deducted each time. If any general warning on futures margin is verified to be caused by the futures company, 0.25 point shall be deducted each time.

(3) If it illegally uses its own funds, provides financing for its shareholders, actual controller or other affiliates or provides security for any outsider, 2 points shall be deducted each time.

(4) If it allows clients to take positions without sufficient margin, 2 points shall be deducted each time.

(5) If it permits any client to directly connect to the exchange to conduct futures trading without fund and position holding verification, 2 points shall be deducted each time;

(6) If the amount of wrong order loss and over loss caused by the ineffective risk control of the futures company exceeds 10% of the amount of risk reserve withdrawn in the current period, 1 point shall be deducted.

(7) If a qualified audit opinion or review opinion is issued on an audit report or review report, 3 points shall be deducted each time.

(8) If it employs any person unqualified for the futures business to conduct the futures business, 0.1 point shall be deducted per person, and at most 2 points may be deducted; if it retains any investment manager who fails to meet office conditions to conduct the asset management business, 0.5 point shall be deducted per person; if it appoints any person that fails to meet office conditions to the position of director, supervisor or senior manager, 2 points shall be deducted per person.

(9) If the position of board chairman or a position of senior manager is vacant for 3 months or longer, 2 points shall be deducted per person; and if the position of director (including independent directors) or supervisor (including the chairman of the supervisory board) is vacant for 3 months or longer in violation of the articles of association of the company, 0.25 point shall be deducted per person.

(10) If it changes its equity structure without performing approval procedures required by any law or regulation, 10 points shall be deducted each time.

(11) If it fails to satisfy the Grade-I requirements in the rating of information technology, 10 points shall be deducted; and if it satisfies the Grade-I requirements while fails to satisfy the requirements for a higher grade it should have satisfied, 5 points shall be deducted.

(12) If it does not use the results of classification evaluation according to the relevant provisions, 1 point shall be deducted each time.

Article 17 Where, during the evaluation period, a futures company is subject to any regulatory measure or any administrative penalty by the CSRC or its local office or any criminal punishment by the judicial organ, corresponding points shall be deducted under the following principles:

(1) If it is given a warning letter, or subject to the regulatory measure of ordering corrective action, 2 points shall be deducted each time.

(2) If it is subject to any regulatory measure as referred to in subparagraphs (2) to (7), paragraph 2 of Article 55 of the Regulation on the Administration of Futures Trading, 3 points shall be deducted each time.

(3) If the company or its subsidiary is ordered to suspend the privately offered asset management business, 5 points shall be deducted each time.

(4) If it is subject to the regulatory measure as referred to in subparagraph (1), paragraph 2 of Article 55 of the Regulation on the Administration of Futures Trading, 10 points shall be deducted each time.

(5) If it is given a warning, 12 points shall be deducted each time.

(6) If it is fined or its illegal income is confiscated, 15 points shall be deducted each time.

(7) If the license for part of its business is revoked, any of its branch offices is closed, or it receives any criminal punishment, 20 points shall be deducted each time.

Where any director, supervisor or senior executive of a futures company is liable for any violation of law or regulation of the company and receives a warning letter or a regulatory talk, one point shall be deducted per person. If the person is given a warning or a fine, 3 points shall be deducted per person. If the office qualification is suspended or revoked, or the person is determined as unfit for the position, 5 points shall be deducted per person. If the person is subject to the measure of prohibition from market access for a certain period of time, 8 points shall be deducted per person. If the person is subject to the measure of permanent prohibition from market access, 10 points shall be deducted per person.

If the futures company or any of its directors, supervisors and senior executives is subject to any administrative regulatory measure or any administrative penalty for the same matter, the points shall be calculated separately and deducted in an aggregate manner.

Article 18 If any branch of a futures company is subject to any of the regulatory measures as mentioned in Article 17 of these Provisions, the dispatched office of the CSRC of the place where the branch is located shall timely inform the dispatched office of the CSRC of the place where the futures company is domiciled.

For the branch of the futures company, corresponding points shall be deducted under the principles in Article 17 of these Provisions.

Article 19 Where a futures company or its subsidiary is subject to any disciplinary action by the China Futures Association, 0.5 point shall be deducted each time; if any employee of the futures company is subject to any disciplinary action by the China Futures Association, 0.25 point shall be deducted per person. If a futures company investigates and punishes any regulatory violation of its employee and transfers him to the China Futures Association for disciplinary action, the futures company may be exempt from deduction of points for disciplinary action taken against its employee after the China Futures Association reports to the review committee for recognition.

Where a futures company is subject to any disciplinary action by the futures exchange, 0.5 point shall be deducted each time; if the subsidiary of the futures company or asset management product managed by the futures company or its subsidiary is subject to any disciplinary action by the futures exchange, 0.25 point shall be deducted each time. If a futures company, its subsidiary or asset management product is subject to any disciplinary action by the stock exchange for any regulatory violation in participating in the relevant business on the securities market, relevant provisions shall apply mutatis mutandis.

Where a futures company or its subsidiary is subject to any disciplinary action by the Asset Management Association of China (“AMAC”) for any regulatory violation in the asset management business, 0.5 point shall be deducted each time.

Article 20 Where a futures company has been subject to any disciplinary action, regulatory measure, administrative punishment or criminal punishment for any regulatory violation, or has been subject to multiple disciplinary actions, regulatory measures, administrative punishments and criminal punishments for the same regulatory violation, points shall be deducted according to the item with the highest penalty points as prescribed in these Provisions, and no repetitive deduction shall be made, except that the company is subject to any disciplinary action, regulatory measure, administrative punishment or criminal punishment once again due to ineffective rectification. If a futures company is subject to the same disciplinary action, regulatory measure, administrative punishment or criminal punishment for different regulatory violations, corresponding points shall be calculated respectively and deducted in an aggregate manner.

Where a futures company receives separate disciplinary actions, regulatory measures, administrative punishments or criminal punishments for a same matter in different evaluation periods, only the highest value shall be deducted; where points deducted for a same matter in a previous evaluation period do not reach the highest value, the difference between the highest value and the previously deducted points shall be deducted.

Where a futures company is subject to a disciplinary action, regulatory measure, administrative punishment or criminal punishment for a violation, whether the controlling shareholder or the actual controller is changed or not, points shall be deducted according to the corresponding provisions.

Article 21 Where a futures company subject to any of the regulatory measures as mentioned in subparagraph (1), paragraph 1 of Article 17 of these Provisions is able to eliminate potential risks, improve internal management, and complete standard rectification within the prescribed time limit and passes the acceptance check by the dispatched office of the CSRC, it is allowed to deduct no points for the regulatory measure, but points for the violation shall still be deducted.

Where a futures company actively reports any regulatory violation which does not meet the standards for the evaluation of risk management capability, the deduction of the points may be halved with the approval of the local CSRC office. If the futures company takes the initiative to correct the aforesaid actively reported regulatory violation during the evaluation period, eliminates adverse effects in a timely manner, and actively blocks management loopholes, reflecting the sound and effective implementation of compliance management rules of the futures company, relevant deducted points may be added back after the local CSRC office reports to the review committee for recognition.

Article 22 Where a futures company meets the following conditions, corresponding points shall be added under the following principles:

(1) If it is merged with any other futures company during the evaluation period and the merger is approved by the CSRC during the evaluation period, 4 points may be added.

(2) If the remaining net capital of the futures company is an integral multiple of 100 million yuan, 0.5 point shall be added per multiple, but at most 2 points may be added. However, if the risk regulation indicator of the futures company reaches the warning line or is not up to the standard, no points shall be added.

Article 23 The CSRC and its local offices may, according to a futures company's cooperation in routine supervision, performance in special-purpose supervision and completion of rectification during the evaluation period, deduct points of the futures company as the case may be, and at most 2 points may be deducted.

Article 24 The CSRC may arrange for relevant entities to conduct special evaluations on futures companies' serving of national strategies, information technology construction, investor education and other aspects, a maximum of 2 points may be added per item.

Chapter IV Classes of Companies

Article 25 Based on the evaluation scores of futures companies, they shall be divided into 5 classes and11 subclasses: Class A (AAA, AA, A), Class B (BBB, BB, B), Class C (CCC, CC, C), Class D, and Class E.

(1) A company of Class A has the highest comprehensive evaluation score in the sector in terms of risk management capability, capability of serving the real economy, market competitiveness, and can better control its business risks.

(2) A company of Class B has a relatively higher comprehensive evaluation score in the sector in terms of risk management capability, capability of serving the real economy, market competitiveness, and status of continuous compliance, and can control its business risks;

(3) A company of Class C has a normal comprehensive evaluation score in the sector in terms of risk management capability, capability of serving the real economy, market competitiveness, and status of continuous compliance, and its risk management capability basically matches its business size.

(4) A company of Class D has a relatively lower comprehensive evaluation score in the sector in terms of risk management capability, capability of serving the real economy, market competitiveness, and status of continuous compliance, and the potential risks may go beyond its risk tolerance level.

(5) For a company of Class E, its potential risks have become reality, and it has been subject to risk disposal measures.

Article 26 Each year, the CSRC shall, in consideration of the development of the futures sector and the classification results in the previous years, determine the companies in 4 classes and 10 subclasses, including Class A (AAA, AA, A), Class B (BBB, BB, B), Class C (CCC, CC, C), and Class D, according to the distribution of the evaluation scores of all futures companies and certain score zones.

Article 27 If the total daily average clients' equity after weighting adjustment of a futures company ranks below the median of the sector, it shall not be rated as Grade A.

Article 28 For a futures company which is subject to a risk disposal measure such as cessation of business for rectification as legally ordered or being under the custody of or received by another institution as designated, it shall be determined as a company of Class E.

Article 29 Where a futures company falls under any of the following circumstances during the evaluation period, no point shall be added with respect to its market competitiveness, it shall be degraded by three grades; and shall be rated as Grade D if the circumstances are serious.

(1) Any of its shareholders makes false capital contribution or illegally withdraws capital contribution.

(2) It conducts business operation beyond its business scope.

(3) It occupies or misappropriates any client's assets.

(4) It has any serious regulatory violation in the asset management business, causing any major risk or adverse effects.

(5) Its risk management subsidiary conducts business operation in violation of any law or regulation, causing any major risk or adverse effects.

(6) It participates in or facilitates illegal futures activities such as futures financing.

(7) It maliciously evades supervision, including reporting false materials to the regulatory department, failing to cooperate with on-site inspection or investigation, and concealing the facts of regulatory violations, among others.

Where a futures company fails to truthfully specify its problems, or omits or hides relevant information, in the process of self-evaluation, points deducted under the corresponding item shall be doubled.

Article 30 A futures company which fails to submit the self-evaluation results before the prescribed date shall be degraded by one subclass; and a futures company which fails to submit the self-evaluation results before the time limit for determination of classification results shall be directly determined as one of Class D.

Article 31 Where any major change or abnormity occurs to a futures company, enough to cause an adjustment of the class of the company, the Review Committee shall have the authority to timely make dynamic adjustment to the class of the relevant futures company according to the relevant situations. The changes that occur to a futures company during its continuous operation in business size, financial status, equity structure and other respects are not subject to dynamic adjustments.

If the futures company's class is upgraded under the above-mentioned adjustment of class, a company of Class E may be adjusted to Subclass C of Class C at most. A company of Class D may be adjusted to Subclass CCC of Class C at most, and a company of Classes A, B or C shall not be upgraded.

Where a futures company applies for dynamic adjustment, the application shall be reported to the Review Committee after passing the preliminary examination by the dispatched office of the CSRC of the place where the company is domiciled.

Article 32 Where futures companies are merged, if the surviving company does not have any of the violations as prescribed in paragraph 1 of Article 29 of these Provisions during the evaluation period of the previous year, and all the violations have been rectified up to the application date, the surviving company may, upon receipt of the official reply of the CSRC on approving the merger of futures companies, apply for adjusting its classification results of the previous year to the higher of the classification results of the merging parties. Where the surviving company applies for adjusting the classification result, the application shall be reported to the Review Committee after passing the preliminary examination by the dispatched office of the CSRC of the place where the company is domiciled.

Chapter V Organization of Implementation

Article 33 The classification evaluation of a futures company shall be conducted in the method of self-evaluation by a futures company, preliminary examination by the relevant entity, review and assessment by the Review Committee and confirmation of the evaluation result by the CSRC.

Article 34 The classification evaluation of futures companies shall be conducted once each year, and the evaluation period for the evaluation indicators of risk management capability and status of continuous compliance shall be between May 1 of the previous year to April 30 of the current year; and as a general rule, the involved financial data and business data shall be those in the audited statements of the last year.

The CSRC shall issue notices and work guidelines to relevant entities before the commencement of the annual evaluation work, and specify the work requirements and detailed rules for operation.

Article 35 A futures company shall conduct self-evaluation in accordance with these Provisions and submit the following materials:

(1) It shall, according to the evaluation indicators and standards for risk management capability and continuous regulatory compliance status, truthfully report its problems and the disciplinary actions, regulatory measures, administrative punishments and criminal punishments, among others, taken against it, and submit them to the local CSRC office at the place where it is domiciled after the confirmation of its legal representative, the person in charge of business management of the company and chief risk officer by signature.

(2) It shall, according to the requirements of the China Futures Market Monitoring Center and the China Futures Association, submit the data and materials relating to the calculation of the indicators of the capability of serving the real economy and market competitiveness, and submit a copy to the local CSRC office at the place where it is domiciled.

Article 36 Local CSRC offices shall, based on the information obtained from the routine supervision, conduct preliminary examination and calculate evaluation scores of the self-evaluation results of risk management capability and continuous regulatory compliance of futures companies, and submit the results to the review committee.

The China Futures Market Monitoring Center shall summarize and calculate the futures companies' scores with respect to the indicator of the capability of the futures company to serve the real economy (excluding the “insurance + futures” business scale) and the indicator of market competitiveness, and submit the scores to the review committee.

The China Futures Market Monitoring Center shall summarize and calculate the futures companies' scores with respect to the indicator of the “insurance + futures” business scale, and submit the scores to the review committee.

Article 37 During the preliminary examination, the dispatched offices of the CSRC shall investigate the relevant issues, and check the relevant information with the relevant futures companies to verify facts.

The China Futures Market Monitoring Center and the China Futures Association shall check the relevant data and verify data differences with the futures company. If it finds any major abnormal circumstance, it shall notify the local CSRC office, and the local CSRC office shall conduct verification and give a feedback.

Where the futures exchange, the China Futures Association, or the AMAC takes a disciplinary action against or imposes a self-regulatory punishment on any futures company or its subsidiary or the asset management product, it shall notify the local CSRC office at the place where the futures company is domiciled.

Article 38 The review committee shall review the preliminary examination materials submitted by local CSRC offices, the China Futures Market Monitoring Center and the China Futures Association, and determine the classes of futures companies according to the review results. The classification results of futures companies shall be valid after confirmation by the CSRC.

Article 39 Where a futures company considers it necessary to apply for exemption from deduction of points for any force majeure or any other special circumstance, it shall submit corresponding certification materials, and the application shall be reviewed, deliberated and decided by the Review Committee after passing the preliminary examination by the dispatched office of the CSRC.

Article 40 The CSRC shall, after the end of the evaluation work each year, inform futures companies of their specific scores and classes in writing.

Article 41 Where a futures company has any objection to the evaluation result, it may submit a written complaint within one month after receiving the notice of classification result. Where a futures company submits a written compliant, the application shall be reported to the Review Committee after passing the preliminary examination by the dispatched office of the CSRC of the place where the company is domiciled.

Article 42 Where a futures company conceals major issues or submits or provides information or materials containing any false record, misleading statement or major omission in the process of self-evaluation, the dispatched office of the CSRC shall take corresponding regulatory measures against the legal representative and senior mangers signing for confirmation and record it on their integrity files.

Article 43 During routine supervision, the dispatched offices of the CSRC shall timely investigate the violations and abnormities of a futures company, promptly take appropriate regulatory measures, record them into the regulatory files, and on this basis, make an objective and impartial preliminary examination of the futures company and compute its evaluation score.

Article 44 Whether the dispatched offices of the CSRC have taken timely and sufficient corresponding regulatory measures for the futures companies' violations of laws and regulations and the quality of preliminary examination for the classification of futures companies are an important basis for implementing the jurisdiction-based supervisory responsibility system and evaluating the performance of the dispatched offices of the CSRC in futures supervision.

Chapter VI Use of Classification Results

Article 45 The CSRC shall, under the principle of classified supervision, apply differential treatment to futures companies of different classes in the allocation of supervision resources, frequencies of on-site inspection and off-site inspection and other respects. Prescribe different risk capital reserve calculation proportions for different types of futures companies

Article 46 The categorization results of futures companies may be taken as prudential conditions for futures companies and their subsidiaries to increase business categories.来自北大法宝

Article 47 The classification results of futures companies shall be used as a basis for determining the scope of a pilot program and the promotion sequence of a new business.

Article 48 The classification results of futures companies shall be used as a basis for determining the different payment proportions for the futures investor protection fund.

Article 49 The classification results of futures companies shall be mainly available for use by the CSRC and its dispatched offices, all futures exchanges, the China Futures Market Monitoring Center, the China Futures Association and other institutions.

Futures companies shall not use the classification results for advertisement, publicity, marketing and other commercial purposes.

Chapter VII Supplementary Provisions

Article 50 The following terms in these Provisions shall have the following meanings:

(1) ‘Major warnings on the futures margin' means the warnings caused by such matters as insufficient self-owned funds of a futures company in the closed loop of margin of the futures company and shortage of margin and other major warnings determined by the China Futures Market Monitoring Center. ‘General warnings on the futures margin' means warnings other than major warnings.

(2) The ‘insurance + futures' business scale shall be calculated by the weighting method. The weight coefficients of the insured value, the number of items and the actual amount of compensation are 0.8, 0.15 and 0.05 respectively.

(3) ‘Daily average positions held by institutional clients' means the sum of the proportions of daily average positions held by general institutional clients and particular institutional clients on all futures products of a futures company, which shall be calculated according to the following formula:

(a) The proportion of daily average positions held by institutional clients on a futures product of a company (P):



where, i = number of trading days during the evaluation period; a = the volume of positions held by institutional clients on a futures product of a company on the current day; A = total positions held by institutional clients on such product on the current day.

(b) The sum of the proportions of daily average positions held by institutional clients on all futures products of a company:

∑Pr

where, r=futures product.

If a product is not active enough in the current year, it may be combined with other relevant active products as a product for calculation or not be included for calculation.

(4) ‘Total daily average clients' equity after weighting adjustment' means the total daily average client's equity calculated according to different weights for clients of different attributes. The weight coefficients of individual clients and institutional clients are 0.5 and 1, respectively.

(5) ‘Futures business income' means the sum of futures brokerage business commission income, futures investment consulting business income, and asset management business income.

(6) ‘Net profits' means net profits in the statements of the parent company of a futures company.

(7) ‘Cost management capability' means the futures business income/(business management fee + business tax and surcharges) of a futures company.

(8) ‘Return on equity' means net profits/net assets.

(9) ‘Daily average derivative equity of asset management products' means the daily average equity of the margin account of futures and options trading of assets management products managed by a futures company and its subsidiaries.

(10) ‘Trading position ratio' means the daily average trading volume/daily average position.

(11) ‘Commission rate' means commission income/trading amount.

(12) ‘Disciplinary actions' means self-regulatory management measures such as disciplinary actions, handling, punishments, and disciplinary measures taken by an institution with self-regulatory management duties in accordance with the relevant provisions after investigation procedures.

(13) ‘Remaining net capital' means the net capital of a futures company deducted by the risk capital reserve.

Article 51 These Provisions shall come into force on the date of issuance.

Annex:

Indicators and Standards for the Evaluation of the Risk Management Capability of Futures Companies (Omitted)

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期货公司分类监管规定
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