Decree No.38 of China Securities Regulatory Commission
No.38 The Interim Measures for the Administration of Futures Investor Safeguard Funds have been deliberated and adopted by China Securities Chairman of China Securities Regulatory Commission Shang Fulin Minister of Ministry of Finance of the People’s Republic of China Jin Renqing April 19, 2007 Interim Measures for the Administration of Futures Investor Safeguard Funds Article 1 In accordance with the Regulation on the Administration of Futures Trading, the present measures are formulated in order to protect Article 2 Futures investor safeguard fund (hereinafter referred to as safeguard fund) is a fund that is exclusively used for compensating investors’ Article 3 Performing futures trading activities shall observe the principles of openness, fairness, justice and that investors shall make investment In case any investor suffers losses from the fluctuation of the futures market or the change of the value of the product he/it invests Article 4 Safeguard funds shall be raised according to the principle of taking from the market and being used for the market. Article 5 Safeguard funds shall be uniformly managed and planned as a whole by China Securities Regulatory Commission. Article 6 Management and operation of safeguard funds shall be implemented observing the principles of openness, reasonableness and effectiveness. Article 7 The use of safeguard funds shall be performed observing the principles of ensuring the legitimate rights and interests of investors, Chapter II Raise of Safeguard Funds Article 8 The administrative organ of safeguard funds shall set up an exclusive account in the name of safeguard fund, and this account shall Article 9 The start-up capital of safeguard funds shall be formed by a futures exchange with 15 percent of the total amount of risk reserves (1) Payment of 3 percent of the transaction commission charges as collected by the futures exchange against the futures company members; (2) Payment of 0.0005 percent to 0.0010 percent of the vicegerent trading volume made by futures companies out of their transaction commission (3) Other legal property recovered or accepted by the administrative organ of safeguard funds. As for a futures company that has higher risks because of the deterioration of financial condition thereof or its failure to do well Article 10 A futures exchange shall transfer the start-up capital that it shall pay into the exclusive account of safeguard funds within one Futures exchanges and futures companies shall pay follow-up capital on quarterly manner. A futures exchange shall pay its due safeguard Article 11 In the case of any of the following circumstances, futures exchanges or futures companies may temporarily suspend the payment of (1) The total amount of safeguard funds reaches RMB 800 million; (2) It is suffering from a gross unexpected market risk or force majeure. The scale, payment proportion and payment mode of safeguard funds shall be determined and adjusted by China Securities Regulatory Article 12 Sources of safeguard funds may be diversified. Safeguard funds may accept private donations or any other legal property. The interests Chapter III Management and Supervision of Safeguard Funds Article 13 China Securities Regulatory Commission and the Ministry of Finance may designate a related organ to serve as the administrative organ Article 14 The management of safeguard funds shall be performed in light of the principles of safety, stability and soundness to ensure the Safeguard funds may only be used for bank deposit, purchasing national bonds, bonds of the central bank (including instruments of Article 15 Safeguard funds shall be used under independent management and separate accounts and be effectively isolated from other assets that The administrative organ of safeguard fund shall prepare reports relating to the raising, management and use of safeguard funds on Article 16 The administrative organ of safeguard funds, futures exchanges and futures companies shall appropriately keep the accounting vouchers, Article 17 The Ministry of Finance shall take the responsibility of surveilling the financial affairs of safeguard funds. The annual revenue Article 18 China Securities Regulatory Commission shall take the responsibility of surveilling the business operations of safeguard funds, and Chapter IV Use of Safeguard Funds Article 19 In case a futures company is in serious violation of related laws and rules or fails to do well in risk control leading to shortfall Article 20 With respect to the losses of guarantee money as suffered by a futures investor, it shall be compensated with the safeguard funds (1) As for the losses suffered by an individual investor, the part below RMB 100,000(including RMB 100,000) shall be compensated in full (2) As for the losses suffered by an institutional investor, the part below RMB 100,000 shall be compensated in full amount, while the If the current safeguard fund is not enough to make the compensation, the follow-up capital of safeguard funds shall be used to make Article 21 China Securities Regulatory Commission and the administrative organ of safeguard funds shall surveil the related futures company Article 22 As for the losses of guarantee money as suffered by an investor for his/its participation in illegal futures trading, it may not Article 23 The administrative organ of safeguard fund shall acquire the right to be compensated accordingly after any safeguard fund is used Article 24 The administrative organ of safeguard fund shall timely report the circumstances concerning the use, compensation and recovery of Chapter V Penalty Rules Article 25 In case any futures company is in serious violation of related laws or fails to do well in risk control leading to any shortfall Article 26 In case any futures exchange or futures company is in violation of the present measures by way of deferring the payment or refusing Article 27 As for any individual or entity committing misappropriating, encroaching or defrauding safeguard funds or any other illegal behavior, Chapter VI Supplementary Rules Article 28 The present measures shall enter into force as of August 1, 2007. |
China Securities Regulatory Commission, Ministry of Finance
2007-04-19