An Emerging Futures Exchange

An Emerging Futures Exchange MESSAGE FROM CEO

DCE – a Financial Leader in Northeast Asia

In a world of rapid development, risks can sneak up when least expected. DCE is here to give customers the confidence to navigate today’s challenging environment and to move forward in good mes and bad. In a world of ever increasing uncertainty, our mission is to preserve and enhance the efficiency of the futures markets. By lisng products that cater to China’s economic imperaves, we provide effecve risk management tools for global market parcipants in today’s dynamic business environment. China opened to the world over thirty years ago, and DCE has been

LIU Xingqiang operang for nearly 20 years. Over such a short period of me, DCE has President & CEO developed itself into one of the most dynamic and promising exchanges Deputy to China Naonal People's Congress in the world. With trading volume reaching 403 million contracts in 2010, we are one the three largest agricultural futures exchanges and the largest plascs futures market in the world. Undoubtedly, the booming economy in China and the support from our government have both played an important role in our growth. Our vision is to build DCE into a leading futures exchange with world-class talent, top-notch management, cung-edge technology, and superior services. Transparency, integrity, and fairness are the core of DCE’s principles, and it is our common belief that growth and development can only be sustained by enhancing the economic funcons of futures markets and meeng the demands of both commercial and non-commercial traders. In today's highly compeve business environment, only the best will survive and flourish. Building on our heritage of customer centricity and cauous safeguarding, we will connue to focus on four areas of innovaons, including product, process, technology, and services, in order to transform ourselves into a futures trading center with significant global influence.

12 Dalian Commodity Exchange ers a ers ff ering hedging ff onal shipping hub ons but also provides ons but also provides ves Exchange ves Ɵ on decisions, but also has been orts towards achieving the above- orts towards ff ve turnover have reached 1.9 billion reached have turnover ve cs futures market in the world. Trading Trading in the world. market cs futures INTRODUCTION es Regulatory Commission (CSRC), DCE o DCE Commission (CSRC), es Regulatory nancial center and an important interna and an important nancial center fi nue to make strenuous e strenuous make nue to An Emerging Deriva An Emerging ve physical delivery has amounted to 13.32 million metric tons. tons. 13.32 million metric to has amounted delivery physical ve ve trading volume and cumula volume trading ve on Plan”, proposing to “establish an important futures trading center in Asia by center trading futures an important “establish to proposing on Plan”, ng-edge technology, and superior services. In August 2007, the State Council Council 2007, the State and superior services. In August technology, ng-edge vely, and cumula vely, largest futures exchange in the world based on number of contracts traded in 2010. traded on number of contracts based in the world exchange futures largest th on and stable growth, DCE has become an important futures exchange in China. We in China. We exchange futures an important DCE has become growth, on and stable erent industries and providing guidance for farmers’ planta farmers’ guidance for and providing industries erent ff cs, DCE was the 13 cs, DCE was es for DCE’s development, and we will con and we development, DCE’s es for s ng to the development of Dalian city into a regional a regional of Dalian city into the development ng to ng futures trading and building on the strengths of DCE”. This not only sets higher expecta This not only sets of DCE”. and building on the strengths trading ng futures oned goal. men new opportuni promo in Northeast Asia. in Northeast with world- exchange a leading futures of building DCE into strategy the forth of DCE set team In 2006, the management cu management, top-notch class talent, China Revitaliza the “Northeast approved contribu tools to businesses in di to tools The exchange not only has played an important role in commodity price discovery and risk management, o and risk management, price discovery in commodity role an important not only has played The exchange volumes of the exchange more than quadrupled in the past 6 years, reaching 403 million contracts in 2010. According to to in 2010. According 403 million contracts reaching 6 years, than quadrupled in the past more of the exchange volumes sta FIA volume respec RMB, and 73.3 trillion contracts wide range of futures products including corn, soybean no. 1 (non-gmo) , soybean no. 2 (gmo), soybean meal, soybean oil, meal, soybean no. 2 (gmo), soybean , soybean no. 1 (non-gmo) soybean including corn, products of futures wide range and coke. chloride (PVC), (LLDPE), polyvinyl RBD palm oil, linear low density polyethylene sound opera With nearly 20 years’ 28 from 1.2 million investors and over warehouses, delivery 117 designated As of end of 2010, DCE had 188 members, cumula establishment, Since DCE’s provinces. Dalian Commodity Exchange (DCE), founded on February 28, 1993, is one of the four futures exchanges in China and the exchanges futures 28, 1993, is one of the four on February (DCE), founded Dalian Commodity Exchange Securi by the China China. Approved in Northeast exchange only futures are one of the three largest agricultural futures exchanges and the largest plas and the largest exchanges futures agricultural largest one of the three are GROWTH Dalian Commodity Exchange

The Growth of an Emerging Market

DCE was founded in 1993, shortly aŌer the birth of China’s futures market. In the ﬁrst year of its establishment, 416.78 trading volume was only 39 thousand contracts, and turnover barely exceeded 500 million RMB, compared 403.17 with 403 million contracts and 20.9 trillion RMB in 2010. Over the past decade, DCE has been growing in sync with the development of China’s futures market, and almost every major progress made by the exchange is a witness to a historical milestone of the futures industry in China.

319.16 20,852.95

18,821.85

185.61

13,742.67

Annual Trading StaƟsƟcs of DCE 88.03 Volume (Million Contracts) Turnover (Billion RMB) 5,962.27

47.30

20.57 2,548.43

0.04 988.23 0.53

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

3 4

ORGANIZATION

CSRC

Securities Markets Futures Markets China Financial Futures Exchange (CFFEX) Exchange Futures Financial China Shanghai Futures Exchange (SHFE) Zhengzhou Commodity Exchange (ZCE) Shenzhen Stock Exchange (SZSE) Dalian Commodity Exchange (DCE) Shanghai Stock Exchange (SSE)

Member Meeting

Board of Directors

Executive Management Special Committees Trading Delivery Arbitra Finance Member Quali IT Applica Board of Directors’ O Surveillance

Regional Head

Departments Subsidiaries Offices on ons fi ca Media Rela Interna Product Development Industry Development Member Services Legal Surveillance Finance Human Resource Audit Labor Union Research Ins Futures IT Co., Ltd. Admin. Services Co., Ltd. Beijing Shanghai Guangzhou President’s O Strategic Planning O Technology Planning O Trading, Delivery Delivery Clearing Technology Opera on ffi ce onal Coopera ons & Informa ffi tute ce ons & Maintenance ffi ce ffi on ce on

5 6 Stable Growth of China’s Futures Market 2011

2011 2010 CSI 300 stock index futures contract was successfully launched by CFFEX. Coke futures was listed, marking DCE’s diviversiﬁcaon into energy relatated products. 20110 2009 DCE moved into a new buildil ng – the Futures Plaza.

2008 China’s futures markets stood the test of global ﬁnancial crisis.

200820008 RegulaƟons on AdministraƟon of Futures Trading was promulgated and implemented. 2007 DespitDe ite worldwideworlddwiwided ﬁnancinanancialcialal tururmmomoil, DCE’s trading volume exceeded 300 millionmim l contractsacts, and turnovrn err amomounted to 13.7 trillion RMB. 2200007 2006 China Financial Futures Exchange was founded. LLLDLDDPE,P the ﬁrrst noon-n-aaggriicucuulturalu ral pproprroducctt ofo DCE,E, waw s lisisti eded.

2005

Feb. 1st, the Opinions of the State Council Concerning PromoƟon of the Reform and 2004 Opening and Stable Development of Capital Markets was issued, which became the guiding principle for the steady development of China’s futures market.

2003 220040 DCECE reresumsummed trading off corn futures.f

2002

March 5th, “steady development of the futures market” 2001 was included in state level planning, i.e. the Tenth Five-Year Plan for NaƟonal Economic and Social Development, for the ﬁrst me.

th 2000 Dec. 28 , China Futures Associaon, a self-regulatory organizaon of China’s futures industry, was founded.

Interim RegulaƟons on AdministraƟon of Futures Trading 2000 1999 nd promulgated by the State Council on Jun. 2 . DCE’s trading volume moved up to ththe 1st place among all three futures exchanges in China. Second recﬁcaon of China’s futures market started aer 1998 the Circular of the State Council Concerning Further ConsolidaƟon and StandardizaƟon of Futures Markets was issued on Aug. 1st.

1998 1997 DCE was designated by the State Council as one of the three exchanges allowed to connue their futures trading operaons in China. 1996 1997 DCE’s trading volume moved up to the 3rd place among all the 15 futures exchanges in China. Trading of government bond futures, the ﬁrst ﬁnancial 1995 futures contract in China, was terminated aer the “3.27” government bond futures event.

1994

First recficaon of China’s futures market started aer 19941994 1993 the Circular of State Council Concerning Stopping Blind Development of the Futures Market was issued on Nov. 4th. Oct.,ct., DCECE waswas approvedapprove by thethe State CouncilCounci ass onone of thethe 15 pilotlot exchangese chang s in China.Ch na Guangdong Wantong Futures Brokerage Company, 993 1992 the first futures broker in China, was established. Dalianalia CommodityCo mo ity ExchangeE cha ge wasw foundedfou ed in Feb.eb. and startedtart d opoperaraonsns ono Nov. 188th. Special Aluminum Contract, the first commodity 1991 futures contract in China, was listed.

Oct. 12th, Zhengzhou Grain Wholesale Market started its 1990 operaons, marking the birth of China’s futures industry.

Stable Growth of China’s Futures Market 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 PALM OIL

LLDPE SOYBEAN OIL SOYBEAN MEAL CORN SOYBEAN

Nonferrous Metals Coal Iron And Steel Chemicals Cables Film Injecon Special Packaging Material Molding Steel Products SOYBEAN MESteelA SheetsL Secons Steel Coangs Pipes COKE Steel Plates Packaging Agricultural Films Hoses Pharmaceucals Pharmaceucals Toys PVC LLDPE Industrials Miscellaneous Biofuels LLDPE Products Cooking Food Processing Oils And Fats Chemicals Cooking Oil Saponins Food Processing SOYBEAN OIL Isoﬂavonoid Oligosaccharide Ester Related Products PALM OIL Dietary Fiber

Fermented Corn Further Feedstuﬀs Bean Curd Processing SOYBEAN MEAL Pharmaceucals Food (Reﬁned Chemicals)

CORN Soy Lecithin Protein Products SOYBEAN (Food Addives)

Related Industries of DCE Listed Products

7 8 Dalian Commodity Exchange on of ve ca cs futures fi cance on of our fi rst step in diversifying step rst er hedging tool for for er hedging tool fi rst new product launched new product rst fi DCE’s DCE’s The largest futures product in product futures The largest of cumula China in terms volume trading A be importers soybean in product futures The largest largest China and the second based on trading worldwide in 2006 volume The rec since the second in 1998 market futures China’s complex” the “soy Completes into non-agricultural products non-agricultural into in China contract futures First imported based on a purely product plas Further develops suite products contract futures related coal First in China on cals on cs ff ff Oil Food Cable Cooking Cooking Feedstu Feedstu chemicals Packaging Chemicals processing processing metallurgy for plas Bio-energy cs, from agriculturals to industrials, industrials, to agriculturals cs, from Coal related Non-ferrous Corn further Construc Raw material Raw Oil processing Iron produc Iron Food processing Food processing Food Pharmaceu Drainage systems Drainage PRODUCTS on on of the hard work and dedica work on of the hard ed and fi c resins c resins ed soybean ed soybean ed soybean ed soybeans fi fi fi cally modi cally ve major synthe ve major synthe ve fi fi cally modi cally cally modi cally cally modi cally Overview of DCE Products Overview China is the largest producer of producer China is the largest non-gene Non-gene Includes both gene non-gene China is the word’s largest soybean importer soybean largest China is the word’s in the world grain important The most producing corn largest China is the second the world in country industries Widely used in various producer largest China is the second of soybean consumer and the largest meal in the world of petroleum product A downstream One of the and producer largest China is the world’s of coke consumer China is the world’s largest importer and importer largest China is the world’s of polyethylene consumer largest second and Indonesia in Malaysia Mainly produced palm oil consumer largest China is the world’s and importer of petroleum product A downstream One of the producer largest China is the world’s of PVC and consumer produc furnace iron blast for material Raw The largest vegetable oil product in the world the in product oil vegetable largest The The second largest vegetable oil product in the world the in product oil vegetable largest second The a major consumer of soybean oil in the world the in oil of soybean consumer major a China is the second largest producer and Step by Step, We are Moving towards Our Goal Moving towards are We Step, by Step 1993.11.18 2004.12.22 2004.09.22 2000.07.17 2006.01.09 2007.07.31 2007.10.29 2009.05.25 2011.04.15 ons, DCE has been doing its utmost to meet the growing risk management needs management risk the growing meet to ons, DCE has been doing its utmost Soybean No. 1 (A) Soybean No. 2 (B) Soybean Corn (C) Meal (M) Soybean Oil (Y) Soybean LLDPE (L) Oil (P) Palm (V) PVC (J) Coke Product CodeProduct Listed Date about Underlying Market Info Related Uses Signi Market Products are the lifeblood of a futures exchange. From soybeans to plas to soybeans From exchange. of a futures the lifeblood are Products and from futures to op to futures and from from the market. Each new product is a physical manifesta is a physical new product Each the market. from employees. 9 10 Dalian Commodity Exchange ce on to 8,000 on to onal best prac onal best rst genera rst fi onality, capability and capability onality, ons. n r n st y o on of various spread trading strategies. trading spread on of various e o on. The current system not only supports system on. The current y i p s on in 1993, our technology system has system on in 1993, our technology TECHNOLOGY u c b d c e n u e s p o ons per second for the for ons per second of x - -subsystems covering trading, delivery, clearing, delivery, trading, covering -subsystems s n ha has expanded from only 4 in 1993 to over 100 in over only 4 in 1993 to from has expanded r n e c ff ff n us u i s b e a s ty uus s m s s l o nu nuously drive innova nuously drive it um h ra ea uo u th n ee i s n ic nnu nuous enhancement in func nuous enhancement q ce 0 t wwi nc g t d um ow nn ch SiSin ne d c on ngng m 5 ons of the system over the past decade. decade. the past over ons of the system a al o . S in cco c xim ro E. ab di h nt so to CECE e a ur t tth m ad a DDCDC ed m wwwi f f D eaead d i an of s e pon oofof Leading the Trend in Financial Technology Leading the Trend LLeLe bu ea ve wit age siz inte oot y re em on on, with maximum number of daily orders handled increasing from only 200 from handled increasing number of daily orders on, with maximum in evo ons, but also allows easier execu ons, but also allows ons man se has op men er m er maintenance and con er maintenance rge nd s t sy e h m, th nera an 1993 reho e be syst ve advantage of DCE. Since its incep advantage ve safe eng nage xth g gem ed em e, w utur ce prov of th . m r the ty Ma atchi ring t d det y ma f bot onality d Tea orma 0 mi ing us ingle mplex Secur econd 7001), year, e year, n secu on security management system is established in strict accordance with interna accordance in strict is established system on security management ce Security Management c ablish ed Per me mes a year, ensuring the safe and smooth opera ensuring the safe mes a year, ons per second for the sixth genera for ons per second ons pe reasing d to ov d to ears, al ears, acity of Prac inform dards (I dards eral eral member services, surveillance, warehouse management and quality inspec management member services, warehouse surveillance, and op and clearing of both futures trading rec Prac Best Bes The informa tho Team Established Well Well sta of our technical the size system, of the complexity With increasing Wit undergone six major redesigns and upgrades, with con and upgrades, six major redesigns undergone Performance Upgraded Upgra 50 transac from engine has increased of a single matching The capacity The tra be provide allowing us to years, recent Improved Func Improved one with mul into in early 1993 has evolved system The simple trading Technology is a core compe is a core Technology transac 10 million. over thousand to standards (ISO27001), and detailed emergency response plans and manuals have been developed with regular drills held with regular been developed plans and manuals have response emergency (ISO27001), and detailed standards several service level. Major Market Services IniƟaƟves

Rural Area Services Program

A major exchange iniave to improve farmers’ markeng ability, it has provided futures trainings to over 60 thousand farmers from major grain producon areas in Northeast China.

Commercial User Services Program

Aimed to encourage hedging acvies, promote healthy industry development, and increase es between futures traders and related merchants in relevant underlying markets, this program has provided over 1,000 training sessions to companies in various industries since 2008.

Futures Instute

Established in 2005, it has provided research trainings to over 2,000 professionals in China’s futures industry.

Industry Conferences

We held 3 industrial conferences every year, including the Internaonal Oilseeds Industry Conference, the Internaonal Corn Confer- ence, and the China Plascs Industry Conference. With annual parcipaon of over 2,000 domesc and internaonal representa- ves, they have become ﬂagship events in relevant industries in China, playing an important role in building our service brand.

Top 10 Futures Research Team Compeon

Launched in 2009, it is another iniave by DCE to help enhance research capabilies and promote service awareness in the futures industry.

11 12 SERVICES Dalian Commodity Exchange

Focus on the Market, Focus on Our Members

The growth of the futures market depends on the acve parcipaon and support of exchange members, commercial enterprises, and futures investors. As a market organizer, we spare no eﬀorts in providing our customers with the best trading, delivery and clearing services.

Diversified Trading Products: As one of the three largest agricultural futures trading centers and the largest plascs futures market in the world, we will connuously diversify into other markets by acvely researching the feasibility of futures and opons trading in various products, including agricultural produces, industrial commodies, and commodity indexes. Convenient Trading Plaƞorm: DCE’s advanced IT system supports the complete process of trading and clearing in both futures and opons products, and allows execuon of flexible spread trading strategies. We were also the first domesc futures exchange to release in-depth market informaon. Reliable Delivery Network: With over 100 designated delivery warehouses throughout China, DCE has established a strong delivery service network and a modern electronic warehouse receipt system. Daily Mark to Market: DCE has signed clearing services agreements with five major commercial banks in China, including ICBC, CCB, BOC, ABC and BoComm, so as to ensure fund security, prevent default, and reduce credit risks.

7 Heilongjiang

7 Jilin 12 3 22 Liaoning Beijing 28 Xinjiang 1 6 Neimenggu 1 Tianjin Dalian Hebei 10 Beijing 4 5 regional head office Ningxia 7 1 Shanxi Shandong 1 13 Qinghai 3 Gansu 5 Shanxi 13 Henan Jiangsu Xizang 3 26 23 4 Shanghai 4 Anhui 8 6 Hubei 13 Sichuan Chongqing Zhejiang Shanghai 9 regional head office 4 1 Hunan Jiangxi 4 Notes: Guizhou Fujian # of members 2 26 Taiwan # of warehouses Yunnan Guangxi Guangdong 19 Areas served by DCE regional head office HongKong Macau Beijing office: Beijing, Tianjin, Hebei and Shandong Guangzhou regional head office Shanghai office: Shanghai, Jiangsu and Zhejiang, 3 Hainan Guangzhou office: Guangdong, Guangxi and Hainan

Distribuon of DCE Members and Designated Warehouses and Corresponding DCE Regional Head Oﬃces

15 16 TEAM Dalian Commodity Exchange

Together, We Create the Future

Our goal is to build DCE into a leading futures exchange with world-class talent, top-notch management, cung-edge technology, and superior services. A young and energec team of intellectual professionals, with their dedicaon and commitment, are working hard towards this goal.

Our People, the Driver of Our Success DCE has an energec professional team of over 200 employees with an average age of 33. More than half of our employees possess a master’s degree or higher, and over 15% of them have overseas educaon or work experience.

Mission and Values One Goal: to become a leading futures exchange with world-class talent, top-notch management, cung- edge technology, and superior services Two TransformaƟons: to transform from an agricultural commodity exchange into one with diversified products, from a regional market into a naonal market with global influence Three Services: to focus on serving industries, serving members, and serving investors, connuously enhancing the economic funcons of the futures market Four Senses: to strengthen the sense of innovaon, diligence, crisis, and efficiency Five Spirits: to promote spirits of dedicaon, hard work, enterprise, collaboraon, and devoon “To build on the strengths of Dalian Commodity Exchange, promote futures trading, and establish an important futures trading center in Asia”

– Northeast China Revitalizaon Plan Dalian Commodity Exchange

Landmark of the city Dalian International Financial Centre Tower A

Dalian Internaonal Finance Center

Dalian Futures Plaza, Tower A of Dalian Internaonal Finance Center, is the new sky-scraper that houses DCE. It was put into operaon in 2010.

★Tallest Building in Northeast China This is a leading project in the Dalian Financial Business Area, adjacent to Xinghai Square, the largest city square in Asia. It is a landmark building of Dalian and stands 242.8 meters tall with 53 ﬂoors, the tallest in Dalian and Northeast China.

★Masterpiece of World Renowned Architects Designed by GMP, a German architecture ﬁrm with global reputaon, it is constructed by the China Architecture Engineering Corp, the largest construcon group and engineering contractor in China.

★Award Winning Quality Environmentally friendly, fire resistant, quake proof, and energy efficient, Dalian Interna- onal Finance Center is the only construcon in Northeast China to receive awards of demonstraon project for land and energy efficiency from the Ministry of Construcon.

★Best of its Kind in the City The building marks the best of its kind in Dalian, featuring a double glazed low-e glass curtain, a grand lobby with ceiling height of 9.5 meters, 29 Toshiba elevators, a helipad on the roof, a VAV air-condioning system, a 10,000M trunk line of opc cable, a three-way independent power supply, and a parking space for over 1,000 vehicles. Dalian Commodity Exchange www.dce.com.cn Address: No.129 Huizhan Road, Dalian, Liaoning Province, China 116023 TEL: +86-411-84808888, FAX: +86-411-84808588

Regional Head Oﬃces Beijing: 9-10 Floors, Block A, China InternaƟonal Hi-tech ConvenƟon and ExhibiƟon Center, No.12 Yumin Road, Chaoyang District, Beijing, China 100029 TEL: +86-10-82254939, FAX: +86-10-82254910 Shanghai: 10-11 Unit, 15th Floor, Chang Tai InternaƟonal Finance Building, 1589 Shiji Main Street, Pudong New Area, Shanghai, China 200122 TEL: +86-21-50582390, FAX: +86-21-58316201 Guangzhou: 21st Floor, Development Centre B, 3 Linjiang Main Street, Zhujiang Xin Cheng, Guangzhou, China 510623 TEL: +86-20-28870317, FAX: +86-20-28870313

Services and Inquiry Trading: +86-411-84808687 Delivery: +86-411-84808839 Clearing: +86-411-84808897 Complaint: +86-411-84808888

The data cited in this publication was last updated on 31 December 2010 and is subject to change without notice. Prepared by Dalian Commodity Exchange, the contents of this publication are only for your reference and shall not be used as the basis for trading or any other purpose. DCE has tried its best to ensure the accuracy of the data in this publication, but shall not be liable for any error, omission or discrepancy in the contents. All the trademarks contained in this publication are owned by their respective owners, which shall be used as permitted by the law or the owners.