CHINA: INE Releases Notice on Market Maker Applications for Futures and Options Products

Wednesday January 19 2022

On 18^th January 2022, Shanghai International Energy Exchange (INE) released a circular to enhance the role of market makers, improve the functioning of the futures and options markets, and better serve the real economy, the Shanghai International Energy Exchange (“INE”) now accepts applications for new market makers for relevant INE futures and options products in accordance with the Market-Making Management Rules of the Shanghai International Energy Exchange. Details about this application are as follows:

 Products Concerned

Futures: Crude oil (SC), TSR 20 (NR), Low sulfur fuel oil (LU), Bonded copper (BC).

Options: Crude oil options.

Application Requirements

• Having net assets of no less than RMB 50 million or its equivalent in foreign currency.
• Having specialized agencies and personnel in charge of the market-making business, and market-making personnel familiar with the relevant laws and regulations as well as INE’s business rules.
• Having a sound plan for the market-making business, an internal control system, and a risk management system.
• Having no record of severe violation of laws or regulations in the past three years.
• Having a stable and reliable technology system for the market-making business.
• Having the experience recognized by INE in trading, market-making, or simulated market-making; and
• Other requirements prescribed by INE.

 Materials for Application

• An Application Form for Market Maker Qualification with the applicant’s common seal (if any) signed by its legal representative or authorized signatory (Appendix 1).
• A photocopy of the applicant’s Business License bearing its common seal or notarized and lawfully authenticated materials on its legitimate establishment.
• The original of the latest audited financial statement, or a photocopy bearing the common seal of the accounting firm or bearing the signature of the authorized signatory of the accounting firm or the auditing firm. In any case, a paging seal should be stamped.
• Post setting and job responsibility of the market-making department, and the name list and resumes of the person-in-charge and other personnel for the market-making business (Appendix 2).
• An implementation plan for the market-making business, internal control system, and risk management system (Appendix 3 for key points of reference). All these documents should be stamped with a paging seal.
• A Letter of Commitment on no severe violation of laws or regulations in the past three years (Appendix 4).
• A statement on its technology system for the market-making business (Appendix 5).
• A statement on its market-making or simulated market-making; and
• Other materials required by INE and, for a risk management subsidiary of a securities company or futures firm, a photocopy of its Filing Letter of the China Futures Association on Market-making Business.

Requirements for Submission

• Form of Materials: All application materials should be submitted in electronic format and, for Appendices 1 and 4, in paper format as well. Both electronic and paper materials should bear the applicant’s common seal. For existing market makers for INE futures or options products, only Appendices 1 and 4 are needed.
• Order of Materials: Please number the required materials by referring to the above “Materials for Application” section and submit them together with a list.
• Name of Materials: Please name the materials in the format of “Applicant Name—Application Materials for Shanghai International Energy Exchange Market Maker.”
• Deadline of Submission: Please submit the electronic and paper materials respectively by email and post before January 25^th, 2022 and call us to confirm their receipt.
• Applicants who do not meet the application requirements or provide incomplete application materials will be ineligible for the subsequent comprehensive assessment. INE may require additional materials or conduct on-site inspection as necessary.

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