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Detailed Trading Rules of Dalian Commodity Exchange

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Detailed Trading Rules of Dalian Commodity Exchange Detailed Trading Rules of Dalian Commodity Exchange Chapter 1 General Provisions 1. Subject to the Trading Rules of Dalian Commodity Exchange, the detailed trading rules are enacted herein for the purpose of regulating futures trading activities, protecting lawful rights and interests of futures market participants, and ensuring proper futures trading operation on Dalian Commodity Exchange (the “Exchange”). 2. The Exchange, members and customers who conduct futures contract transactions on the Exchange must comply with these detailed trading rules. Chapter 2 Trading Seat Management 3. The trading seat is an access point where a member may enter trading orders into the Exchange’s computerized trading system to participate in futures trading. Trading seats may be categorized as floor trading seats and remote trading seats. The term “remote trading” means a trading method in which a member at its own business location enters trading orders directly into a communication system that is networked with the Exchange’s computerized trading system to participate in futures contract transactions conducted on the Exchange. 4. Upon obtaining its membership, a member shall be given a floor trading seat immediately. Additional seat(s) may be acquired in accordance with the Exchange’s approval. 5. Additional trading seat(s) granted to a member shall only mean additional access point(s) and shall not imply any change to the Exchange’s regulations such as the member’s position limits, risk control or other pertinent rules. 6. The member shall meet the following requirements for its applications for additional floor trading seat(s): 6.1. to maintain sound business operations; 6.2. to be ranked among the top 50 for its trading volume consecutively in three months immediately preceding the date of application, or to have a large quantity of futures trading orders executed on the Exchange; 6.3. to have other qualifications prescribed by the Exchange. 7. The member shall submit the following documents to the Exchange in order to apply for an additional floor trading seat: 7.1. a fully completed form of Applications for Additional Member Floor Trading Seat on Dalian Commodity Exchange; 7.2. a statement of its futures brokerage business operation in the most recent year; 7.3. an explanation of the reason(s) for additional seat(s); 7.4. other document(s) required by the Exchange. 8. After the Exchange has approved the application for additional seat(s), the member that has submitted the application shall sign an agreement with the Exchange. The term of the agreement is one year. The fee for an additional seat is 20,000 RMB and collected annually. 9. The member that applied for additional seat(s) shall complete all necessary formalities at the Exchange for the entry to the trading floor within 10 business days immediately after the date when the agreement was signed. The Exchange may deny the member of the right to additional floor trading seat(s) if this procedure has not been completed within 10 business days without proper cause. 10. If the member applies to terminate the usage of an additional floor trading seat before the expiration of the agreement, the agreement may be terminated before its maturity in accordance with the Exchange’s approval. 11. The Exchange may revoke a member’s right to an additional floor trading seat under any of the following conditions: 11.1. the documents submitted along with the application contain falsified information; 11.2. the seat has been entirely or partially leased or subcontracted to another organization or individual; 11.3. the seat has not been managed properly or there have been serious rule violations; 11.4. the member no longer has the qualifications to acquire an additional floor trading seat; 11.5. the member has not re-applied after the contract has reached its maturity; 11.6. other situations that are deemed by the Exchange as a reason for the termination. 12. Fee for using additional floor trading seat shall not be returned if the member stops using the seat or the Exchange revokes the member’s right to use the additional floor trading seat. 13. The member shall meet the following requirements for its applications for a remote trading seat: 13.1. to maintain sound business operations; 13.2. to have adequate communication facilities and adequate capital transfer at the planned location for remote trading that satisfy the Exchange’s requirement for futures trading operation; 13.3. to have sound procedures and rules to manage remote trading; 13.4. to have a regular location for remote trading; 13.5. to have a remote trading system whose establishment and management satisfy the standards for technology management set forth by the China Securities Regulatory Commission ( “CSRC”). 14. The member shall submit the following documents in order to apply for a remote trading seat: 14.1. a fully completed form of Applications For a Remote Trading Seat on Dalian Commodity Exchange; 14.2. a statement of its futures trading operations in the last two years; 14.3. other document(s) required by the Exchange. 15. The Exchange shall respond to a member’s application in a written reply within a month upon receiving the application form and relevant documents submitted by the member. 16. Upon receiving the Exchange’s approval for its remote trading application, the member shall sign the remote trading agreement with the Exchange within a week. The Exchange may deny the member of the remote trading seat if the contract has not been signed within a week without proper cause. 17. The Exchange shall notify a member of the starting date for remote trading after the member submits an application for initiating its remote trading system. 18. The member that has acquired a remote trading seat shall still maintain its floor trading seat as a backup access point. If a member’s remote trading fails to function properly during trading hours, the member shall use its floor trading seat to conduct trades. The member shall be fully responsible for any consequence resulted in the situation that the member has no floor representative of the member in the Trading Hall if its remote trading fails to function properly 19. The member shall exercise due diligence to manage its remote trading and maintain its remote trading system. The approval from the Exchange shall be obtained before a major facility to be replaced or technology to be upgraded. Moving the remote trading seat from the registered location to another regular location shall be subject to the Exchange’s approval. The Exchange shall have the authority to inspect and supervise the usage of the remote trading seat. 20. The Exchange may revoke a member’s right to remote trading seat under any of the following conditions: 20.1. the documents submitted along with the application contain falsified information; 20.2. the seat has been entirely or partially leased or subcontracted to another organization or individual; 20.3. the seat has not been managed properly or there have been rule violations; 20.4. the member no longer has the qualifications to acquire a remote trading seat; 20.5. the remote trading system has been used for other purposes than trading; 20.6. the member has requested to terminate the usage. 21. All trading seats obtained by a member shall be automatically terminated if the member is no longer qualified for the Exchange membership. 22. Trading on the Exchange shall be halted if more than 10 percent of the members are unable to trade due to malfunctions of such trading facilities as computer terminals or communication systems until the problem has been corrected. Chapter 3 Floor Representative Management 23. The floor representative shall be an individual who has been designated by a member and to represent the member and conduct futures trading in the Trading Hall in accordance with instructions from the member. The member shall be responsible for its floor representative’s trading-related behaviors in the Trading Hall. 24. Eligible floor representatives shall meet the following requirements: 24.1. At least eighteen years old and have full civil capability; 24.2. Have undertaken professional training of the Exchange and acquired qualification certificate; 24.3. Well-behaved and enjoy professional morality; 24.4. Has no criminal records. 25. The following documents shall be presented to obtain the badge of floor representative: the original letter of entrustment signed by the member’s legal representative, application for floor representative (with official seal of the member firm), Certificate of Qualification for the floor representative, personal identification and academic diplomas and certificates. 26. The trading seat may have no more than two floor representatives. Request for more than two floor representatives for a special need shall be subject to the Exchange’s approval. 27. The floor representative may enter the Trading Hall thirty minutes prior to the opening of the market on the trading day to prepare for the market opening and shall leave the Trading Hall no later than thirty minutes after the closing of the market. No floor representative shall enter or leave the Trading Hall at his own discretion. Entering the Trading Hall for a special need shall be subject to the approval of the Exchange’s staff who manage the Trading Hall. The member shall keep at least one floor representative at its Trading Seat during the trading period. The member shall be responsible for the consequences, if any, resulting from the absence of its floor representatives. 28. The floor representative shall carry valid credentials and wear the special uniform while staying in the Trading Hall. 29. The floor representative shall take care of every facility in the Trading Hall and operate computing equipments in the Trading Hall strictly in accordance with the Exchange’s regulations.
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