The Shanghai Futures Exchange ("SHFE") has recently issued the Administrative Measures for Market Makers (the "Measures"), and, meanwhile, distributed relevant documents to solicit market makers for nickel and gold futures. The Measures take effect immediately from the date of issuance.
The Measures stipulate that the SHFE will manage qualifications of market makers by type of commodity futures and that an application for being qualified as a market maker requires the fulfillment of seven requirements, which state that, for example, "the applicant shall own net assets worth at least CNY50 million" and "the applicant shall have no history of any major violation of laws and regulations in the past three years". In the meanwhile, the Measures explicitly state that, to apply for being qualified as a market maker, an applicant shall provide nine types of written documents, including the application form for the market maker qualification that is affixed with the signature or seal of its legal representative and the official seal of the entity. Where such application is approved by the SHFE, the applicant shall enter into a market maker agreement with the SHFE within ten trading days upon receipt of the SHFE's notice of such approval, and it will turn into a qualified market maker for a certain type of commodity futures after signing the said agreement. Furthermore, the Measures specify that a market maker may enjoy certain rights, including the right for reduced handling fees for futures transactions, depending on stipulations of the agreement and market making situations.