As the China government bond (CGB) futures market develops steadily, CGB futures play an increasingly important role in creating yield curves that more accurately reflect market supply and demand and serving the high-quality development of the capital market, particularly the bond market. To fu...
December 24, 2021, China Financial Futures Exchange (CFFEX) released the notice on reducing the delivery fee of equity index futures and CGB futures by half from January 1, 2022 to December 31, 2022.
The delivery fee reduction is another positive response to the nation’s tax and fee reduction policies after the implementation of the delivery fee reduction arrangement for equity index futures and CGB futures in 2021. It takes another step forward in promoting the CSRC’s initiative of “Serving the People” so as to providing the people with real benefits. It will effectively reduce the cost of investors' participation in financial futures transactions, further promote the financial market functioning, and strongly enhance the support from financial sectors to real economy.
Next, following the guidance of the CSRC, CFFEX will continuously optimize its services, further benefit the real economy with higher quality and more feasible measures, thus creating a beneficial industrial ecology for the financial futures market.
To further improve self-regulation in the financial futures market and strengthen the investigation and handling of violations and breaches, China Financial Futures Exchange (CFFEX) released the amended Measures of China Financial Futures Exchange on Dealing with Violations and Breaches (the “Measures”) on November 19, which improved and adjusted provisions on application scopes, violation acts, and handling measures. The Measures will take effect on the day of release.
The investigation and handling of violations is critical to maintaining an orderly financial futures market, protecting the legitimate rights and interests of investors, and ensuring market functioning. In recent years, under the guiding principles of building a comprehensive rules and regulations system, non-intervention of normal market activities, and zero tolerance for violations, CFFEX has dealt with a number of violations that disrupt market order such as pre-arranged trades and spoofing, and achieved positive results. This year, in response to the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law printed and issued by the General Office of the CPC Central Committee and the General Office of the State Council, CFFEX has taken multiple measures to strengthen the investigation and handling of violations in the financial futures market under the leadership of the China Securities Regulatory Commission (CSRC).
The amendments of the Measures include: (1) expanding the scope of application by expressly include other market participants such as market makers; (2) supplementing and improving provisions on specific violation acts; members’ breach of member management rules and trading limit, and market makers’ breach of market-making, information management, or system management rules, and acts that damage the reputation of CFFEX and disrupt orderly trading by various means are newly identified as violations; provisions on acts that affect trading order and violate position management rules are improved; and provisions on acts that violate Actual Control Accounts management rules are further clarified; (3) modifying and adjusting self-regulatory measures to effectively raise the cost of violations; and (4) improving the remedy procedures and revising provisions on ruling and enforcement, and dispute mediation.
Next, under the leadership of the CSRC and in line with the CSRC’s requirements of “Four Awes and One Synergy”, CFFEX will continue to perform frontline supervisory duties by cracking down on violations in the financial futures market, so as to maintain a fair, impartial, and orderly market and protect the legitimate rights and interests of investors.
On September 29, China Financial Futures Exchange (CFFEX) jointly held a bell ringing ceremony, to support the initiative of “Ringing the Bell for Financial Literacy” of International Organization of Securities Commissions (IOSCO) and the World Federation of Exchanges (WFE), together with Shanghai Stock Exchange and five other WFE member exchanges in China, and also with China Securities Investor Services Center and China Securities Investor Protection Fund. The purpose of the event is to promote financial literacy and raise awareness of the role of exchanges and other market infrastructures in investor education and protection. WFE CEO Nandini Sukumar joined the event remotely, and WFE Chairman, Cboe CEO Edward Tilly sent a congratulatory message.
As member of WFE and affiliate member of IOSCO, CFFEX has always prioritized investor education and protection. Over the years, CFFEX has successfully launched a wide range of investor oriented projects dedicated to the cause, including establishing the “CFFEX Futures and Options Institute”, one of the first national centers for capital market investor education; organizing a host of education programs featuring financial derivatives that are dedicated to university and college students, as well as market professionals and other members of the investment community; developing a full library of education materials that are intuitive and easy to understand; providing online courses and interactive gamification; and undertaking projects that combine financial literacy with poverty alleviation, to support development of the real economy.
"World Investor Week" is a global campaign promoted by IOSCO to raise awareness of the importance of investor education and protection. The “2021 World Investor Week" will be held from October 4th to 10th, and is the fifth such event. This year again, IOSCO and the WFE are working in partnership to support the “world Investor Week” through an initiative called “Ring the Bell for Financial Literacy”. This is the first time that 7 member exchanges in China jointly held the bell ringing ceremony, and also the first time CFFEX participated.
During the "2021 World Investor Week", CFFEX also plans to advocate the initiative through online quizzes in addition to social media and local video website promotion. In accordance with the CSRC requirements of "Four Awes and One Synergy", CFFEX will continue to work with global peers to build consensus and improve synergy on investor protection and education, and effectively meet the demands of domestic and international investors.
July 29, 2021, China Financial Futures Exchange (CFFEX) held a review seminar in Beijing on best practices of CGB futures. Officials from China Securities Regulatory Commission (CSRC) and CFFEX attended the seminar.
This event of CGB Futures best practices review has drawn wide attention from the industry. A number of institutional investors actively participated in the event. After selecting the crème de la crème, 10 CGB futures application cases submitted by 10 institutional investors were picked for the final review. During the review seminar, those shortlisted 10 institutional investors presented their cases, which include CGB futures supporting bond issuance, reducing corporate financing costs, managing financial risks, improving bond market performance, and serving the opening up of the financial market. And based on their expertise, review committee at the seminar evaluated each cases from perspectives including macro policy, and raised constructive opinions and suggestions.
On the seminar, Mr. Shi Guangwei, Executive Vice President of CFFEX, pointed out that CGB futures are important tools for interest rate risk management. A well-functioning CGB futures market is of great significance in deepening financial market reform and improving the overall financial system. By far, CFFEX has successively listed 5-year, 10-year and 2-year CGB futures, covering the short, medium and long term yield. The market scale has grown steadily and its functions have become increasingly prominent. The purpose of this event is to deeply explore, recognize and promote innovative CGB futures application on risk management to serve the real economy, and build a joint force to develop the CGB futures market through collaboration and communication.
A CSRC official summarized that the CGB futures application cases of institutional investors are vivid embodiment of financial futures serving the real economy, which demonstrated that the fundamental purpose of financial futures market is to supplement the capital market and also support the national strategies. The CSRC official also expressed expectations that with the support of regulators and joint efforts of the industry, CFFEX would further enrich its CGB futures product line, improve the trading mechanism, enhance the investors base, and encourage more medium and long-term investors to participate in the CGB futures market, so as to further serve the high-quality development of the bond market. And meanwhile, it is also expected that market participants would further strengthen compliance, enhance risk control, improve capability, and lay a solid foundation for robust market operation.
Next, in line with CSRC's principle of "Four Awes" and "One Synergy", CFFEX will fully shoulder its market and political responsibilities, improve its services to institutional investors, and steadily build a healthy bond futures market going forward. By integrating the CGB futures market development into the big-picture of national strategies, serving the real economy and the capital market reform, CFFEX will strive to further serve the high-quality development of China’s bond market and national economy.