The Shanghai Futures Exchange ("SHFE") has recently released the Administrative Measures for the Trading of Standard Warrants (for Trial Implementation) (the "Measures"), effective from May 15, 2018.
The Measures provide for the trading objects, trading time, warrant traders, trading business, settlement business, delivery and receipt business, and so forth. Further, the Measures stipulate that standard warrants will be traded by means of listing on the exchange, and warrant traders are required to file applications in the standard warrant management system for participating in the trading, within the specified trading time, and could engage in the trading business for standard warrants once their applications have been examined and approved. Meanwhile, the Measures clearly state that, the exchange will require the respective warrant trader of the buyer and the seller in a deal of standard warrants to complete the settlement on the current day. A warrant trader shall open a bank settlement account in the designated custodian bank for the deposit and transfer of funds. Furthermore, the Measures note that the trading of standard warrants is subject to the price restriction system, implying that the price limit range will be determined based on a certain percentage which is higher than or lower than the benchmark price of each variety and the quotation offered by a warrant trader is invalid if it surpasses the upper limit of the price limit range.