The Shanghai Futures Exchange ("SHFE") has recently issued the Administrative Measures for Trading of Warehouse Standard Warrants (for Trial Implementation) (Amendment) (the "Administrative Measures") which have taken effect from October 14, 2019.
The Administrative Measures incorporate changes as below. The first is improving the access system for warehouse standard warrant traders, and introducing the exemption clause. An exemption clause, reading "the exchange may exempt the applicant from one or several condition(s) as mentioned above, according to the applicant's financial status, risk management capacity, degree of business operation stability, the written commitment submitted by the applicant, among other materials", is added to Article 7 of the Administrative Measures. The second is optimizing the trading mechanism through revising the articles regarding trading business to cover the newly-launched trading business of buyers' listing of warehouse standard warrants. For instance, definitions of terms in relation to listing transactions, given in Article 16 of the previous version of the Administrative Measures are revised; specifically, the previous definition of listing transactions is removed, and instead, respective definitions of sellers' listing transactions and buyers' listing transactions are provided. The third is improving the settlement mechanism; the articles in respect of settlement business are modified to take into account the circumstance where warehouse standard warrant traders are financial institutions such as banks and securities firms.