Market Volatility Intensifies! Futures Exchanges Continue to Strengthen Supervision

Recently, due to the Middle East situation, domestic energy-related commodities have experienced intense fluctuations. To prevent market risks, futures exchanges have continuously strengthened supervision, cracking down severely on abnormal trading, accounts with actual control relationships engaging in violations, and other misconduct.

Shanghai Futures Exchange Strengthens Management of Accounts with Actual Control Relationships

On March 17, the Shanghai Futures Exchange announced that one group of accounts with actual control relationships exceeded the intra-day opening position limit on relevant contracts, reaching the exchange’s handling standard. In accordance with relevant regulations, the exchange decided to impose restrictions on opening positions for the related clients on the corresponding contracts.

From the regulatory perspective, the Shanghai Futures Exchange places particular emphasis on managing accounts with actual control relationships, with the most self-regulatory cases handled. As of March 18, when this report was published, the exchange had issued nine notices titled “Restrictions on Opening Positions for Certain Clients,” all involving violations related to accounts with actual control relationships.

The announcement shows that to effectively strengthen risk prevention, enhance frontline supervision, standardize futures trading behavior, and protect the legitimate rights and interests of market participants, the Shanghai Futures Exchange has been continuously conducting self-regulatory work. In February this year, regarding abnormal trading behavior management, 83 cases were handled, including 21 cases of self-trading exceeding limits, 16 cases of frequent order placements and cancellations exceeding limits, 1 case of large order placement and cancellation exceeding limits, and 45 cases of intra-day opening position limits being exceeded. All these clients were prompted by member units. Restrictions on opening positions were imposed on 45 groups of accounts with actual control relationships, with public announcements made to the entire market. Regarding the identification and investigation of accounts with actual control relationships, 714 clients across 323 groups were identified, and 75 clients in 35 groups were subject to further investigation. The exchange also reminded traders to pay attention to compliance risks and properly report accounts with actual control relationships during daily trading.

Incidents of Wash Trading and Fund Transfers Occur Occasionally

In reports from other futures exchanges, serious violations also occasionally occur in the futures market.

Zhengzhou Commodity Exchange announced that in February, it handled seven cases of abnormal trading, including four cases of self-trading and three cases of frequent order placements and cancellations. These clients were prompted by member units. Six cases of violations of self-regulatory rules were processed, including two cases of position management violations, two cases of wash trading and fund transfer, one case of market order disruption, and one case of mutual trading and fund transfer between accounts with actual control relationships. Thirteen clients involved received disciplinary actions such as warnings, public criticism, suspension of opening positions, and confiscation of illegal gains, and their records were entered into the integrity database of the securities and futures market.

Dalian Commodity Exchange handled six cases of abnormal trading in February, including six cases of self-trading exceeding limits, with clients being prompted via phone by member units. Seven suspicious trading clues were investigated, including five related to suspected arranged trades for fund transfer and two related to self-trading or arranged trades affecting contract prices. Corresponding measures were taken after investigations.

Additionally, in February, the Guangzhou Futures Exchange handled eight cases of abnormal trading, including three cases of self-trading exceeding limits, one case of frequent order placements and cancellations exceeding limits, and four cases of large order placements and cancellations exceeding limits. Clients or actual control groups involved were prompted via phone by member units. Three suspicious trading clues were investigated, including one related to self-trading affecting contract prices.

Proofread: Yang Shuxin