Measures for the Closed Management of Margin of Futures Companies (2021 Amendment)

Chapter I General Provisions

Article 1 For the purposes of protecting the lawful rights and interests of futures investors and preventing market risks, these Measures are formulated in accordance with the Regulation on the Administration of Futures Trading, the Measures for the Supervision and Administration of Futures Companies, and other relevant laws and administrative regulations.

Article 2 The margin of the customers of a futures company (hereinafter referred to as the "margin") must, on the principle of closed operation, be deposited in full with a futures margin depository bank engaged in margin deposit and withdrawal business (hereinafter referred to as the “depository bank”), and be independent of and under management separate from the proprietary funds of the futures company.

A futures company shall be strictly prohibited from misappropriating margin.

Article 3 The China Securities Regulatory Commission (hereinafter referred to as the "CSRC") and its field offices shall regulate the closed management of margin of futures companies in accordance with these Measures.

The China Futures Market Monitoring Center (hereinafter referred to as the “CFMMC”) shall monitor the closed management of margin of futures companies in accordance with these Measures.

Article 4 A depository bank shall perform the obligation to supervise the closed management of margin of futures companies in accordance with these Measures.

Article 5 A futures exchange or any other institution that performs the function of clearing futures transactions (hereinafter referred to as the “other futures clearing institution”) shall perform the duty to exercise self-regulation of the closed management of margin of futures companies in accordance with these Measures.

Chapter II Account Management

Article 6 A futures company shall open a margin account with a depository bank, exclusively for the deposit of margin.

Article 7 A futures company may open margin accounts with depository banks as needed for its business, but must designate a depository bank as the principal depository bank. Under extraordinary circumstances, the futures company may apply to the CFMMC for temporarily designating another depository bank as the principal depository bank.

The futures company shall open a special proprietary funds account with the principal depository bank.

Article 8 A customer engaged in futures trading shall open with a depository bank in his or her name, or designate, a checking account for depositing and withdrawing margin as a futures settlement account.

Article 9 A customer shall register with his or her futures company before using his or her futures settlement account to process the deposit and withdrawal of funds in futures trading. The customer may register futures settlement accounts with depository banks with his or her futures company. If the customer changes a futures settlement account, he or she shall register the change with the futures company.

Chapter III Closed Operation

Article 10 A futures company must deposit margin in its margin account or margin accounts. Margin may be transferred among any margin account of the futures company, any special funds account opened by the futures company with a depository bank office designated by a futures exchange, and any funds account of the futures company with a futures exchange or any other futures clearing institution. The above accounts together constitute a closed loop of margin. Margin may be transferred only within the closed loop, and operate in a closed manner.

If a futures company is engaged in stock option brokerage business or securities spot brokerage business related to writing and exercising covered calls in stocks, a margin account for depositing futures margin, option margin, premiums, exercise funds, and other customer funds shall be under management segregated from a margin account for depositing customers-related spot funds, and funds may not be transferred between the accounts.

Article 11 Except for a customer withdrawal or under any circumstance specified in Articles 13 and 14 of these Measures, a futures company shall not transfer funds out of the closed loop.

It shall be strictly prohibited to misappropriate or appropriate margin in disguised form by pledge or any other means.

Article 12 A proprietary funds account of a futures company shall be segregated from its closed loop of margin. The futures company may transfer funds between the closed loop of margin and proprietary funds only through a margin account opened with its principal depository bank and designated and its special proprietary funds account.

A margin account opened by the futures company, other than a margin account designated for transfers between the closed loop of margin and proprietary funds, shall be completely segregated from any proprietary funds account of the futures company, and funds shall not be transferred between such accounts.

Article 13 Where a futures company charges trading fees or interest, among others, and pays seat fees, telephone charges, among others, it shall transfer funds between its closed loop of margin and special proprietary funds account.

Article 14 A futures company which proposes to temporarily supplement its settlement reserves with its proprietary funds, in order to meet the needs of customers for trading between different futures exchanges and ensure the settlement of customers' transactions, may make an allocation only from its special proprietary funds account to a margin account opened with its principal depository bank and designated.

If the futures company needs to transfer the allocated funds back to its proprietary funds account after completing the temporary supplements, it may make a transfer only from the margin account opened with its principal depository bank and designated to the special proprietary funds account, and the cumulative amount of the outward transfer shall not be more than the cumulative amount of previous inward transfer.

Article 15 When a customer runs up an overdraft, or sustains a loss in excess of margin in a futures transaction, resulting in insufficient margin, the futures company shall cover the shortfall in the margin with its proprietary funds in a timely manner, and shall not appropriate the margin of another customer. When covering the shortfall in the margin with its proprietary funds, the futures company shall make an allocation from its special proprietary funds account to a margin account opened with its principal depository bank and designated.

Article 16 A futures company shall withdraw funds from a margin account for any customer by means of settlement permitted by relevant regulations, and shall not transfer margin to its proprietary funds account and then withdraw the funds from the proprietary funds account for the customer.

Article 17 When a futures company handles a withdrawal of funds by a customer, the payee account name shall be consistent with the name of the customer making the withdrawal, with the exception of certain special incorporated customers of which the consistency of names is impossible according to the other business rules of the CSRC, among others.

When a futures company needs to transfer customer funds from its closed loop of margin to an account inconsistent with the customer's name under extraordinary circumstances such as enforcement by an appropriate authority, enterprise deregistration, and intestate succession, the futures company shall perform the examination duties, and issue an explanation of the situation and related supporting materials to the CFMMC.

Article 18 A customer shall deposit and withdraw margin in the form of intra-bank transfer between a futures settlement account and a margin account of the futures company opened with the same depository bank, rather than by means of cash receipts and payments or internal transfer of the futures company.

Chapter IV Business Standards

Article 19 Where a futures company designates or changes its principal depository bank, it shall make a filing with the CFMMC on the day of completion.

Article 20 Where a futures company opens or changes a margin account or special proprietary funds account, it shall make a filing with the CFMMC on the day of completion.

The CFMMC shall, after receiving filing information from the futures company, register the filing content, and so notify as to enable its depository bank to maintain the margin account and submit account information as required.

The futures company shall not use the account until confirming that the depository bank normally submits account information through the Futures Statements Query Service System.

Article 21 A futures company shall promptly close a margin account or special proprietary funds account which ceases to be in use, and make a filing with the CFMMC on the day of completion.

Article 22 Where a futures company opens, changes, or closes a margin account, it shall promptly disclose the account opening, change, or closing to customers through its official website or any other channel after the completion of filing.

Article 23 The CFMMC shall establish an information sharing mechanism to share the filing information for the margin accounts of futures companies with the CSRC field offices in a timely manner.

Article 24 A futures company shall regularly submit data and information on the total amount of customer rights and interests to the CFMMC in a uniform format.

A depository bank shall, in a uniform format, regularly submit to the CFMMC data and information on the balances of margin accounts opened by futures companies and special fund accounts opened with depository bank offices designated by futures exchanges, among others.

Any futures exchange or other futures clearing institution shall, in a uniform format, regularly submit to the CFMMC data and information on the balances of funds accounts opened by futures companies with the exchange or other futures clearing institution, among others.

Article 25 The CFMMC shall daily audit the following matters based on the data on the funds in the closed loop of margin submitted by depository banks, futures exchanges, and other futures clearing institutions:

(1) Customer rights and interests reported by futures companies. The balance of funds in the closed loop of margin of a futures company shall be more than or equivalent to all the customer rights and interests for the current period.

(2) The proprietary funds of futures companies in the closed loop of margin. The balance of the proprietary funds of a futures company in its closed loop of margin shall be more than or equivalent to the minimum regulatory requirements for proprietary funds.

(3) Other matters required by the CSRC.

Article 26 The CFMMC shall, in accordance with the provisions on the supervision of futures margin, give notification of any abnormality found during audit to the CSRC field office in the place where the futures company is located, and report to the CSRC. The field office shall conduct a check and disposal in accordance with the provisions on the supervision of futures margin, and give notification of the check and disposal to the CFMMC.

Article 27 A futures company shall daily measure the information on the funds in the closed loop of margin and data on customer rights and interests and retain measurement results for future reference.

Article 28 A depository bank shall specially mark margin accounts in the system, set restrictions on freezing in whole on relevant online inspection and control and other platforms, and when receiving instructions to freeze or debit a margin account from an appropriate authority, state the special nature of account funds and arrangements, among others, that the account may not be frozen or debited in whole or in excess of the case-related amount.

Where a margin account is frozen or debited, the depository bank shall report to the CFMMC in a timely manner.

Article 29 A depository bank shall supervise the transfer of funds in the closed loop of margin of futures companies. If a futures company is found to commit an act such as the transfer of margin in violation of provisions, the depository bank shall immediately report to the CSRC field office in the place where the futures company is located and the CFMMC.

Article 30 A depository bank, a futures exchange, or any other futures clearing institution shall immediately report any discovered material abnormality in the funds in the closed loop of margin of a futures company to the CSRC field office in the place where the futures company is located and the CFMMC.

Article 31 The employees of the CSRC and its field offices, the CFMMC, depository banks, futures exchanges, and other futures clearing institutions shall keep the information on the margin of futures companies confidential.

Chapter V Supervision and Administration

Article 32 The CSRC and its field offices may inspect the closed operation of margin of futures companies as needed for regulation, the CFMMC shall provide data support, and depository banks, futures exchanges, and other futures clearing institutions shall cooperate.

Article 33 If a futures company commits any of the following acts, the CSRC and its field offices may, based on the circumstances, take the regulatory measures specified in Article 55 of the Regulation on the Administration of Futures Trading and Article 109 of the Measures for the Supervision and Administration of Futures Companies against the futures company, any liable director, supervisor, or officer of the futures company, and any other directly liable person:

(1) Failing to open a margin account or special proprietary funds account with a depository bank as required.

(2) Failing to manage margin independently and separately from the proprietary funds of the futures company as required.

(3) Depositing margin outside the closed loop of margin.

(4) Failing to change or close a margin account as required, or disclose margin account information to customers in the prescribed manner.

(5) Transferring proprietary funds to and from the closed loop of margin through an account other than the special proprietary funds account with the principal depository bank.

(6) Permitting a withdrawal of funds by a customer to an account other than a registered futures settlement account.

(7) The information submitted to the CFMMC contains any false statement, misleading statement, or material omission.

(8) Misappropriating or appropriating margin.

(9) Any other act which the CSRC determines as a violation of these Measures.

Article 34 Where a depository bank commits any of the following acts, the CSRC and its field offices may take such regulatory measures as to order the depository bank to take corrective action. If the depository bank fails to take corrective action, and the circumstances are serious, the CSRC and its field offices may propose that a futures exchange terminate the futures margin depository business agreement signed with the depository bank in accordance with business rules:

(1) Failing to submit relevant documents and information in a timely, accurate, and complete manner in accordance with the data submission requirements of the CFMMC.

(2) Failing to maintain margin account information in a timely manner as required.

(3) Failing to specially mark margin accounts and effectively perform the obligation to state the nature of margin accounts and the examination duties as required, causing a margin account to be frozen or debited by an appropriate authority in a manner not permitted by relevant laws and regulations.

(4) Failing to promptly report a transfer of margin or any other act in violation of provisions by a futures company discovered to a CSRC field office and the CFMMC.打遮阳伞就显得很娘

(5) Participating in misappropriating customer margin in disguised form by pledge or any other means.

(6) Forging and reporting false data and information on margin account balances, deposits and withdrawals, and exchanges, among others.

(7) Any other act which the CSRC determines as a violation of these Measures.

Article 35 Where a futures exchange or any other futures clearing institution fails to strictly perform an obligation under these Measures, affecting the regulation of the closed loop of margin of futures companies by the CSRC and its field offices, the CSRC may order it to take corrective action within a specified period.

Article 36 Where the CFMMC fails to strictly perform a duty under these Measures, affecting the regulation of the closed loop of margin of futures companies by the CSRC and its field offices and the safe and stable operation of the futures market, the CSRC may order it to take corrective action within a specified period.

Article 37 For the closed management of margin of futures companies, an accountability system shall be implemented. The CSRC may impose penalties on futures companies, depository banks, futures exchanges, and other futures clearing institutions, the CFMMC, and relevant liable persons in accordance with Articles 64 through 67 of the Regulation on the Administration of Futures Trading.

If any violation of these Measures carries administrative discipline or disciplinary action, Article 78 of the Regulation on the Administration of Futures Trading.

Chapter VI Supplementary Provisions

Article 38 For the purposes of these Measures, the following terms shall be defined as follows:

(1) The term "depository bank" means a domestic bank designated by a futures exchange to engage in margin deposit, transfer, exchange, and other business.

(2) The term "principal depository bank" means a depository bank with which a futures company opens a margin account and a special proprietary funds account.

(3) The term "margin account" means an account opened by a futures company with a depository bank exclusively for depositing margin.

(4) The term "special fund account opened by a futures company with a depository bank office designated by a futures exchange" means a margin account which a futures company opens with a depository bank office designated by a futures exchange for processing fund transactions in futures business with the settlement accounts of the futures exchange.

(5) The term "fund account of a futures company with a futures exchange or any other futures clearing institution" means a sub account created for a futures company by an exchange to facilitate the management by separate account of the margin deposited by the futures company into its special settlement account, which is used for the futures company to deposit settlement reserves and trading margin with the futures exchange; or a stock option margin account or settlement reserve account which a futures company applies as clearing participant for opening to a securities depository and clearing institution, respectively used to deposit premiums in option transactions of the clearing participant, exercise funds, the margin submitted in cash, and spot settlement reserves.

Article 39 Where an overseas trader or overseas brokerage institution engages in trading domestic specific types of futures, the relevant provisions of these Measures shall apply.

Article 40 A futures company that handles fund transactions with the settlement account of any other futures clearing institution shall also comply with the relevant requirements of the other futures clearing institution.

Article 41 These Measures shall come into force on the date of issuance.

Chinese Link:

期货公司保证金封闭管理办法

https://neris.csrc.gov.cn/falvfagui/rdqsHeader/mainbody?navbarId=3&secFutrsLawId=a5b3fbc494c74244acea56f7aa4f10d6&body=