1、Measures for Arbitrage Management of Dalian Commodity Exchange (for Public Consultation Only)Chapter I General ProvisionsArticle 1 These Measures are formulated pursuant to the Trading Rules of Dalian Commodity Exchange and other regulations for the purposes of standardizing the arbitrage business m
2、anagement and promoting the standardized development of the futures market.Article 2 The arbitrage hereunder shall be divided into calendar spread arbitrage and inter-product spread arbitrage. The calendar spread arbitrage shall refer to the arbitrage between and among the different contracts with r
3、espect to the same product. The inter-product spread shall refer to the arbitrage between and among the contracts of different products.On the basis of the different contract months, the arbitrage may be divided into the arbitrage of the general months (as of the contract listing date through the la
4、st trading day of the first month preceding the delivery month) and that of the delivery months.Article 3 The Exchange shall timely publish the products, contracts and combination methods applicable to the arbitrage.Article 4 The Members, overseas brokers and clients which engage in the arbitrage bu
5、siness at Dalian Commodity Exchange (the “Exchange”) shall comply with these Measures.Chapter II Arbitrage PositionArticle 5 The total of the arbitrage positions and speculative positions of the non-futures company Members and clients shall not exceed the speculative position limit prescribed by the
6、 Exchange. The non-futures company Members and clients may apply for increasing the arbitrage position amount. No clients which have obtained the hedging trading qualifications may apply for the arbitrage position increase with respect to the applicable products.Article 6 The client shall file an ap
7、plication for increasing arbitrage position amount through its futures company Member; and after its application materials have been examined by the futures company Member, the futures company Member shall handle the declaration formalities to the Exchange on behalf of the client pursuant to these M
8、easures, and the non-futures company Member shall directly handle the declaration formalities to the Exchange. The client which entrusts an overseas broker with futures trading and intends to apply for arbitrage position amount shall entrust its overseas broker with the handling, and the overseas br
9、oker shall then entrust a futures company Member with the handling.Article 7 The non-futures company Members or clients which apply for increasing the arbitrage position amount of the general months shall submit the following materials to the Exchange:(1) The arbitrage position amount increase appli
10、cation form which mainly includes the applicants basic information, applied products and quantities, the arbitrage strategy, and other information required by the Exchange; and,(2) Other materials required by the Exchange.The arbitrage position increase of the general months granted to the non-futur
11、es company Members or clients shall be applicable to all the contracts of the general months with respect to the applied products.Article 8 The non-futures company Members or clients which apply for increasing the arbitrage position amount of the close-to-delivery months shall submit the following m
12、aterials to the Exchange:(1) The arbitrage position amount increase application form which mainly includes the applicants basic information, applied products, contracts and quantities, the arbitrage strategy, and other information required by the Exchange; (2) The analysis of the deviation of the pr
13、ice differences of the applied contracts; and,(3) Other materials required by the Exchange.The arbitrage position increase of the close-to-delivery months granted to the non-futures company Members or clients shall be applicable to the applied contracts.Article 9 The deadline of applying for increas
14、ing the arbitrage position amount of the close-to-delivery months shall be the last trading day of the first month preceding the delivery month of the nearby month contract of the arbitrage positions; and no application will otherwise be accepted by the Exchange with respect to increasing the arbitr
15、age position amount of the close-to-delivery months for such contract.Article 10 With respect to the application for increasing the arbitrage position amount of the general months, the Exchange shall determine the arbitrage position increase of the general months after examining the credit informati
16、on, historical operation situations, use of arbitrage positions and other information.With respect to the application for increasing the arbitrage position amount of the close-to-delivery months, the Exchange shall determine the arbitrage position increase of the close-to-delivery months after exami
17、ning the credit information, historical operation situations, the contract position information, the quantities of the deliverables, and whether the price difference of the applied contract deviates, and other factors.Article 11 With respect to the application for increasing the arbitrage position a
18、mount of the general months, the Exchange shall examine, and make reply with respect to, the complete application materials within five (5) working days upon receipt thereof. With respect to the application for increasing the arbitrage position amount of the close-to-delivery months, after receipt o
19、f the complete application materials, the Exchange shall carry out examination as of the first trading day of the first month preceding the delivery month of the nearby month contract of the arbitrage positions and make reply within five (5) trading days.Article 12 The non-futures company Members an
20、d clients shall timely file an application for change to the Exchange in case of any need of adjusting the arbitrage position amount.Article 13 The Exchange may adjust the arbitrage position increases of the non-futures company Members and clients on the basis of the market situations.Chapter III Ar
21、bitrage Margins, Profit and Loss and Commission ChargesArticle 14 The Exchange shall formulate, publish to the market, the standards for charging the arbitrage margins. The Exchange may adjust the standards for arbitrage margins on the basis of the market situations.Article 15 During the trading per
22、iod, the arbitrage margins with respect to the positions opened as per the arbitrage orders prescribed by the Exchange shall be charged as per the standards upon settlement of the immediately preceding trading day. Any insufficiency in margins shall be subject to the Detailed Settlement Rules of Dal
23、ian Commodity Exchange and other applicable rules.Article 16 Upon settlement, the arbitrage margins with respect to all the positions under the same trading code shall be charged under the principle of “inter-product spread after calendar spread” after the combination on the basis of the order “from
24、 near to far” in the aspect of the distance between the contract month and the delivery month.Article 17 Upon liquidation of the arbitrage position, the collection of the trading margins of non-liquidated contracts shall occur after the refund of the trading margins of the arbitrage position.Article
25、 18 The calculation of the profit and loss with respect to the arbitrage position and liquidation shall be made pursuant to the Detailed Settlement Rules of Dalian Commodity Exchange and other relevant provisions.Article 19 The Exchange may take preferential measures with respect to the arbitrage co
26、mmission charges.Chapter IV Supervision and ManagementArticle 20 The Exchange may carry out, from time to time, supervision and management of the credit and the futures market trading of the Members and clients; and the Members, overseas brokers and clients shall offer assistance and cooperation.Art
27、icle 21 The non-futures company Members and clients the total of whose arbitrage positions and speculative positions exceed the standards prescribed by the Exchange shall carry out self-adjustment prior to the ending of the first session trading of the immediately following trading day; and the Exch
28、ange may otherwise carry out the forced liquidation in case of no such adjustment or the applicable requirements fail to be satisfied after adjustment.Article 22 In case the non-futures company Members and clients take the arbitrage to adversely affect, or attempt to adversely affect, the market pri
29、ce, the Exchange may take such measures as conversation reminding, written warning, adjustment or cancellation of its arbitrage position increase, limited position-opening, liquidation within a specified period, forced liquidation or other measures, and additionally apply the applicable provisions o
30、f the Measures for Handling of Violations of Dalian Commodity Exchange.Article 23 Any of the non-futures company Members and clients which commit fraudulence or violate any regulations of the Exchange when it applies for increasing the arbitrage position amount or carries out trading, the Exchange m
31、ay reject its application for increasing the arbitrage position amount, adjust or cancel the approved arbitrage position increase, and take such measures as limited position-opening, liquidation within a specified period, forced liquidation or other handling measures, and additionally apply the appl
32、icable provisions of the Measures for Handling of Violations of Dalian Commodity Exchange.Chapter V Supplementary ProvisionsArticle 24 Any unmentioned matters herein shall be subject to the applicable business rules of the Exchange.Article 25 These Measures shall be interpreted by Dalian Commodity Exchange.Article 26 These Measures shall enter into force as of the date of promulgation.
