Futures hedging business management system
Chapter I General Provisions
Article 1 in order to regulate the futures hedging behavior of Anhui Huilong Agricultural Means Of Production .Co.Ltd(002556) (hereinafter referred to as “the company”), improve the investment efficiency, avoid the risks brought by investment, make effective and rational use of funds and maximize the value of funds, in accordance with the stock listing rules of Shenzhen Stock Exchange, the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and other laws and regulations This system is formulated in accordance with the relevant provisions of normative documents and Anhui Huilong Agricultural Means Of Production .Co.Ltd(002556) articles of Association (hereinafter referred to as the “articles of association”) and in combination with the actual situation of the company.
Article 2 the futures hedging business of the company is limited to the futures varieties related to the company’s operation traded in the domestic futures exchange, mainly by virtue of the price discovery and risk hedging functions of the futures market to reduce the impact of commodity price fluctuations on the company’s operating performance and ensure the steady development of the company’s business.
Article 3 when conducting commodity futures hedging business, the company shall follow the following principles:
(I) the company’s commodity futures hedging business can only be traded on the exchange market, and shall not be traded on the OTC market.
(II) when the company conducts commodity futures hedging business, in principle, the number of positions established in the futures market shall not exceed the actual number of spot transactions, the amount of futures positions shall not exceed the hedged amount of spot, and the holding time of corresponding futures positions shall not exceed the time specified in the goods contract or the actual execution time of the contract.
(III) in principle, the time period of futures position shall match the time period of risk in the spot market. (IV) the company shall establish a hedging transaction account in the name of the company and shall not use the account of others for hedging business.
(V) the company shall have its own funds matching the trading guarantee of commodity futures hedging business, and shall not use the raised funds to conduct hedging business directly or indirectly. The company shall strictly control the capital scale of hedging business and shall not affect the normal operation of the company.
Article 4 this system is applicable to the futures hedging business of the company and its subsidiaries, but the subsidiaries shall not operate the futures business without the approval of the company.
Chapter II Organization and responsibilities
Article 5 the company shall establish a leading group for hedging business (hereinafter referred to as the “leading group”) to be responsible for the decision-making of major matters of futures hedging business. The main members include: the deputy general manager in charge of futures business, and the heads of finance department, audit department, logistics department, securities investment department and futures trading department. The leading group shall be headed by the deputy general manager in charge of futures business of the company. The futures trading department of the company specifically carries out hedging business. Article 6 main responsibilities of the leading group:
(I) be responsible for supervising and managing the hedging business of enterprises;
(II) be responsible for convening the current hedging decision-making meeting;
(III) be responsible for approving the hedging transaction scheme within the scope of authorization;
(IV) supervise the relevant personnel of futures business to implement risk management policies and working procedures, and conduct risk assessment before, during and after the transaction;
(V) report to the board of directors in time when there are serious risks or risk events are not handled properly.
Article 7 the main responsibilities of the futures trading department:
(I) be responsible for the collection, research and analysis of spot and futures market information of futures hedging products, and formulate corresponding futures hedging trading strategy plans;
(II) be responsible for formulating hedging plans;
(III) be responsible for the daily management of futures hedging business, including the daily management of expense account, trading software and quotation software account application, use and setting up account;
(IV) be responsible for the supervision and management of futures trading quota application and quota use, daily business such as futures hedging trading opening and closing position application, review and fund availability, delivery management and real-time monitoring of intraday trading risk, and speculative trading is not allowed;
(V) be responsible for timely adjusting and formulating the transaction implementation plan according to the market changes, and implement it after approval; (VI) maintain effective communication with futures brokerage companies, coordinate and deal with major internal and external matters of the company’s futures hedging business, and regularly report the futures hedging business to the company’s management;
(VII) be responsible for the emergency treatment of transaction risks;
(VIII) report to the leading group immediately when there are serious risks or risk events are not handled properly. Article 8 the finance department is responsible for ensuring the supervision of the approved fund raising and use for futures operation, and supervising the financial results of futures operation on a monthly basis.
Article 9 the audit department is responsible for regularly / irregularly reviewing the actual operation, capital use and profit and loss of futures hedging business.
Article 10 the logistics department shall be responsible for the spot inventory and the situation of spot stock in and out at the time of delivery.
Article 11 the securities investment department is responsible for the information disclosure of hedging business, as well as the approval of fund application, dispatching and increasing varieties.
Chapter III approval authority
Article 12 all hedging businesses must be strictly limited to the approved hedging plan and shall not operate beyond the scope.
Article 13 the total authority of the board of directors to authorize the general manager to approve hedging business is 50 million yuan; If it exceeds 50 million yuan, the approval procedure of the board of directors shall be performed.
Chapter IV authorization system
Article 14 the account opening contract signed with the brokerage company shall be signed by the legal representative of the company or the person authorized by the legal representative after being reviewed in accordance with the relevant provisions and procedures of the contract signed by the company.
Article 15 the company implements authorization management for futures trading operations. Authorization includes transaction authorization and transaction fund appropriation authorization. The authorization shall be decided by the general manager, but it shall be ensured that the transaction authorization and fund allocation authorization are independent of each other, and the transaction right must be separated from the fund allocation right.
Article 16 the authorized personnel shall carry out the operation within the scope of authorization after obtaining the written authorization.
Article 17 in case of any change of the authorized person for any reason, the authorized person shall immediately notify the relevant parties of the business, and the authorized person shall no longer enjoy all the rights authorized from the date of notification.
Chapter V internal control
Article 18 before carrying out futures hedging business, the company shall:
(I) fully evaluate and carefully select futures companies;
(II) reasonably set up the hedging business organization, establish the post responsibility system, clarify the responsibilities and authorities of relevant departments and posts, and arrange post business personnel with professional knowledge and management experience.
Article 19 the futures trading department shall keep track of the development and credit status of the futures brokerage company at any time, and report the relevant changes to the leading group, so that the company can decide whether to replace the futures brokerage company according to the actual situation.
Article 20 the audit department shall regularly or irregularly inspect the hedging business, supervise the hedging business personnel to implement the risk management policies and risk management procedures, review the relevant business records, verify whether the trading behavior of the business personnel is in line with the futures business trading plan, and timely prevent the operational risks in the business. Article 21 the company establishes the following internal risk reporting system:
(I) when the market price fluctuates greatly or abnormally, the trader shall immediately report to the manager of the futures trading department; If the market value loss of trading contract approaches or exceeds the stop loss limit, the stop loss mechanism should be started immediately; In case of margin increase and other risk events, the futures trading department shall immediately report to the leading group, timely submit analysis opinions and make decisions.
(II) the audit department is responsible for the monitoring of operational risk. In case of the following circumstances, it shall immediately report to the leading group:
1. Relevant personnel of futures business violate risk management policies and risk management procedures;
2. The credit status of the futures brokerage company does not meet the requirements of the company;
3. The company’s specific hedging plan does not comply with relevant regulations;
4. The trading behavior of the trader does not meet the requirements of the hedging scheme;
5. The risk status of the company’s futures position will affect the normal hedging;
6. There are or will be relevant legal risks in the company’s futures business.
Article 22 handling procedures of wrong transaction orders of the company:
(I) in case of wrong orders due to the fault of the futures brokerage company, the trader shall immediately notify the brokerage company, and the brokerage company shall take corresponding wrong order handling measures in time, and then recover the losses from the brokerage company.
(II) in case of wrong orders due to the fault of the company’s traders, the traders shall immediately report to the manager of the futures trading department, and the manager of the futures trading department shall issue corresponding instructions to eliminate or minimize the losses caused to the company by wrong orders. If losses are still caused to the company after handling, the punishment policy shall be determined according to the seriousness of the circumstances.
Article 23 the company shall reasonably plan and arrange the use of margin to ensure the normal hedging process, and reasonably select the hedging month to avoid market liquidity risk.
Article 24 the company shall arrange and use futures business personnel in strict accordance with the regulations, strengthen the professional ethics education and business training of relevant personnel, and improve the comprehensive quality of relevant personnel.
Article 25 the company shall set up computer systems and relevant facilities that meet the requirements to ensure the normal operation of transactions.
Article 26 in case of any change in the relevant operating personnel of the futures trading department authorized by the company, the password related to futures trading shall be changed immediately.
Chapter VI reporting system
Article 27 futures traders shall regularly report to the manager of the futures trading department the new positions, planned positions and closed positions.
Article 28 the finance department shall designate a special person to carry out reconciliation related to futures trading with futures traders and futures brokerage companies, and regularly submit futures hedging business statements to the manager of the futures trading department, the person in charge of Finance and the relevant departments of futures management, including the summary of positions, settlement profits and losses and the use of margin.
Chapter VII information disclosure
Article 29 the company shall submit the futures hedging business to the board of directors for deliberation and approval in advance, fulfill the obligation of information disclosure in time in strict accordance with the requirements of Shenzhen Stock Exchange, and submit relevant documents to Shenzhen Stock Exchange within 2 trading days after the board of directors makes relevant resolutions.
Article 30 after the changes in the fair value of the commodity futures designated by the company for hedging are offset against the changes in the fair value of the hedged items, the amount of loss shall be disclosed in time within two trading days whenever it reaches or exceeds 10% of the audited net profit attributable to the shareholders of the listed company in the latest year and the amount of loss exceeds 10 million yuan.
Chapter VIII archives management
Article 31 the original trading data, settlement data, trading account, authorization documents, various internal reports, documents issued and approved documents of the company’s commodity futures hedging business shall be kept by the futures trading department for a period of not less than 10 years. The company shall implement the accounting data of futures business in accordance with the accounting file management measures. Chapter IX control of emergency response plan
Article 32 when the company implements the futures hedging trading scheme, if the continuation of the business will cause significant increase in risk and may cause significant losses due to major changes in national policies and markets, it shall take the initiative to report in time according to its authority, and close or lock the position within the shortest time.
Article 33 in case of losses caused by force majeure such as earthquake, flood, fire, typhoon and war, it shall be handled in accordance with the relevant laws and regulations of China’s futures industry, futures contracts and relevant contracts.
Article 34 If the transaction cannot be carried out normally due to local power failure, computer and company network failure and other reasons, the company shall timely enable standby wireless network, laptop and other equipment or entrust the futures brokerage company to carry out the transaction by telephone.
Chapter X confidentiality system
Article 35 the relevant personnel of the company’s futures business shall abide by the company’s confidentiality system and sign a confidentiality agreement with the company.
Article 36 without permission, the relevant personnel of the company’s futures business shall not disclose the company’s hedging plan, trading, settlement, capital status and other information related to the company’s futures trading.
Article 37 the relevant personnel of the company’s futures business and other staff who come into contact with the company’s futures trading related information due to work relationship shall have the responsibility and obligation of strict confidentiality. The party concerned shall be fully responsible for any adverse consequences caused by information leakage due to personal reasons, and the company will investigate the responsibility of the party concerned at the same time. Chapter XI Legal Liability
Article 38 If the relevant personnel involved in the trading instructions, fund allocation, order placement, settlement, risk control and other related personnel involved in the system operate in strict accordance with the specified procedures, the trading risk shall be borne by the company. The ultra vires operator shall be personally liable for the transaction risk or loss for the fund appropriation, order trading and other acts carried out beyond his authority.
Article 39 the company has the right to recover the losses caused to the company by withholding wages and bonuses, bringing a lawsuit to the people’s court and other legal means. If his act constitutes a crime according to law, the company shall report the case to the judicial organ and investigate criminal responsibility. Chapter XII supplementary provisions
Article 40 the terms “above”, “within” and “below” in this system include this number; “Less than”, “less than”, “more than” does not include this number.
Article 41 matters not covered in this system shall be implemented in accordance with relevant laws, regulations, normative documents, articles of association and other relevant provisions.
Article 42 the right to interpret this system belongs to the board of directors of the company.
Article 43 this system comes from the board of directors of the company
