On April 20, the 34th meeting of the Standing Committee of the 13th National People's Congress voted and adopted the futures and derivatives law of the people's Republic of China (hereinafter referred to as the Futures Law), which will come into force on August 1. This law comprehensively and systematically stipulates the basic systems of the futures market and derivatives market, fills the legal gaps in relevant fields, and will play an important role in building a futures and derivatives market matching China's economic status, ensuring the healthy and stable operation of the market, preventing and resolving financial risks, and improving international competitiveness.
China's futures market has developed earlier and has a history of more than 30 years; In recent years, derivatives trading has gradually developed. Before the adoption of this law, futures and derivatives trading were mainly regulated and regulated in accordance with the regulations on the administration of futures trading. Since the 18th CPC National Congress, the futures market has entered a new stage of innovation and development: the number of newly listed futures and options has increased rapidly, and the number of stock varieties is more than twice that before 2012; Further improve the variety system of financial futures; There are more varieties of exchange options. In March 2018, crude oil futures, the first futures variety open to the outside world, was listed; In the same year, iron ore futures was officially introduced into the business of overseas traders. In 2020, the CSRC lifted the restrictions on the proportion of foreign shares of futures companies, marking a significant increase in the openness of the futures market. It is urgent to introduce relevant laws that can cover the whole market, the whole chain and have more authority. The smooth passage of the law deserves congratulations.
The promulgation of this law has at least three positive effects. One is to promote enterprises and other market subjects to participate in the futures and derivatives market in a standardized manner and promote the all-round and healthy development of the national economy.
With the deepening of the marketization and legalization of China's market economy, the needs of market entities to use futures and derivatives markets to hedge and hedge risks have increased significantly. Therefore, it is timely to support the healthy development of the futures market through legislation and give full play to its functions of price discovery, risk management and resource allocation.
In terms of the number and scope of participants in the futures and derivatives market, this is a relatively small market; However, because this market is actually at the top of the financial market, it has a great impact on the whole financial market. Standardizing and improving the regulatory mechanism of relevant transactions through legislation is conducive to guiding relevant market subjects to participate in the futures and derivatives market according to law, as well as guiding other parties to correctly understand this market, so as to give full play to the positive role of futures and derivatives market in serving the real economy and promote the all-round and healthy development of the national economy.
The law stipulates that entity enterprises are encouraged to use the futures market to engage in risk management activities such as hedging and clarify the exemption of position limit; It is specially stipulated to take measures to promote the development of Shenzhen Agricultural Products Group Co.Ltd(000061) futures market and derivatives market, and guide China's Shenzhen Agricultural Products Group Co.Ltd(000061) production and operation, which reflects the guidance of scientific, rational and active application of market mechanism.
Second, coordinate the interactive development of domestic and foreign futures and derivatives markets and promote the high-level opening of financial markets to the outside world.
In the field of commodities and related financial products, capital flow and risk transmission have been globalized. In particular, the dominant prices of many commodities are mainly formed in overseas markets. When Chinese market participants participate in the trading of international futures and derivatives markets, they will inevitably face the problems of capital flow, risk prevention and regulatory cooperation.
At the same time, with the continuous development and growth of China's futures market and derivatives market, the enthusiasm of overseas subjects to participate is also gradually increasing. In particular, some varieties are unique to the Chinese market, and foreign investment naturally has allocation needs. At the same time, the relevant marketing activities carried out by overseas institutions in China will also involve regulatory issues.
To this end, the law defines the applicable effect of foreign futures market activities; It stipulates that overseas futures trading places and overseas futures operating institutions provide services to China, as well as the code of conduct that should be observed in cross-border transactions; Make a framework and principled arrangements for the mechanism of cross-border regulatory cooperation between China and foreign countries. This is a powerful impetus to promote the orderly development of domestic and foreign financial cooperation and improve the level of China's financial sector opening to the outside world.
Third, strengthen risk prevention and control in specific areas and promote the stable development of the overall financial market.
The scale of China's financial market is growing day by day, and the probability of risk transmission and infection between markets in different fields, categories and levels has increased greatly. This requires relevant laws to cover every market segment. This law not only regulates the traditional futures trading market, but also includes derivatives trading, which improves the coverage and inclusiveness of the law.
The law has made specific provisions on the rights and obligations, code of conduct and regulatory rules of traders and exchanges, operating institutions and settlement institutions. Among them, it stipulates that financial institutions should be approved or approved in accordance with the law to carry out futures and derivatives trading business, which provides a legal basis for combating various disguised illegal transactions. At the same time, distinguish between professional traders and ordinary traders, hedging traders and ordinary traders, build a trader protection system, improve the civil legal liability system, and introduce a diversified dispute resolution mechanism.
The law has strengthened the construction of the risk prevention and control system, including stipulating that futures trading implements risk control systems such as position limit, debt free settlement on the same day and forced closing of positions, and clarifying the legal status of the central counterparty of futures settlement institutions; Strengthen the front-line supervision responsibilities of futures trading places, improve the market monitoring system, and build a three-dimensional and diversified risk prevention and control system.
While summarizing the past market practice and incorporating effective systems and practices into the law, the law also makes innovative arrangements in terms of variety listing mechanism, business scope of futures companies and margin diversification, leaving room for follow-up reform and development.
The introduction of the futures law is a great impetus to the standardized and high-quality development of the overall financial market. With the increased publicity and implementation of the law, market participants' awareness of the rule of law will be further improved, the degree of standardized operation will be further improved, and the atmosphere of practicing, competing, exercising and safeguarding rights according to law will be stronger, so as to promote the benign interactive development of the financial market and the real economy.
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