Crude oil risk control
1. Margin Requirement
The Exchange applies margin requirements. The Exchange applies different rates of trading margin for a futures contract based on different periods of trading from its listing to its last trading day. The application of different rates of trading margin for each listed futures contract is provided in the risk control parameters section in these Risk Management Rules.
The Exchange applies price limits. The price limit for each listed futures contract shall be prescribed by the Exchange.
When the following events or conditions occur in the process of trading a futures contract, the Exchange may, in its sole discretion, adjust the price limit for a futures contract in response to market risk conditions. The Exchange shall issue a public announcement of the adjustment, and report to the CSRC:
1. same-direction price limit occurs for consecutive trading days;
2. a long public holiday is approaching;
3. the Exchange, in its discretion, determines that the market risk is increasing; and/or
4. other circumstances the Exchange deems necessary to adjust the price limit in a market.
Positions held by Clients, Non-FF Members, or OSNBPs that have actual control relationship with each other shall be calculated in aggregation as prescribed in these Risk Management Rules.
Standards and procedures to identify the actual control relationship among different accounts shall be implemented as prescribed by the Exchange separately.
4. Large Trader Position Reporting
A large trader position report shall include information such as funds, open interests, delivery intention, and other information as prescribed by the Exchange.
The Exchange may, in its sole discretion, set and adjust the requirements for large trader position reporting, content of the report, and methods of reporting according to market risk conditions.
Members, OSPs, Overseas Intermediaries and Clients shall be responsible for the accuracy and integrity of information in the large trader position reports and other related documents submitted.
A Member, an OSP or a Client whose general position in a futures contract reaches the general position limit set by the Exchange, or an Overseas Intermediary whose general position in a futures contract reaches or exceeds sixty percent (60%) of its general position limit, shall take the initiative to report to the Exchange by 15:00 of the following trading day.
5.Forced Position Liquidation
The Exchange shall impose forced position liquidation, if:
1. the clearing deposit balance of a Member recorded on any of the internal ledgers at the Exchange, which are whether to serve its own Clients or its authorized clearing entities, falls below zero (0), and the Member fails to meet the margin requirement within the specified time limit;
2. the open interest of a Non-FF Member, an OSNBP or a Client exceeds the applicable position limit;
3. a Non-FF Member, an OSNBP or a Client fails to round the positions held in a futures
4. contract to multiples as required within the specified time limit, or is not qualified to conduct delivery for matured contracts in its possession;
5. a violation of the Exchange’s rules occurs that warrants a forced position liquidation;
6. any emergency happens that warrants a forced position liquidation; or
7. any other conditions exist that makes the forced position liquidation necessary.
6. Risk Warning
The Exchange may request an explanation from relevant Member, OSP, Overseas Intermediary or Client with respect to the situation, or have an interview with the Client or the designated senior executive of a Member, OSP or Overseas Intermediary, when any of the following conditions exists:
1. unusual price movements;
2. unusual trading activities by such Member, OSP, Overseas Intermediary, or Client;
3. any irregularity in the open interest of such Member, OSP, Overseas Intermediary, or Client;
4. any irregularity in such Member’s funds on deposit;
5. any suspected violation or default by such Member, OSP, Overseas Intermediary, or Client;
6. any allegation, accusation or complaint against such Member, OSP, Overseas Intermediary, or Client received by the Exchange;
7. any judicial investigation against such Member, OSP, Overseas Intermediary, or Client; or
8. other conditions as the Exchange deems necessary.