The China Securities Regulatory Commission ("CSRC") has recently released the Provisions on the Fifth Item under Paragraph 1 of Article 70 of the Administrative Regulations on Futures Transactions (Draft for Comment) (the "Draft for Comment") for public consultation by March 14, 2019.
Encompassing seven articles in total, the Draft for Comment presents in Article 1 the basis on which these provisions are enacted, introduces in Article 2 through Article 5 an explicit ban on four types of behaviors aimed at manipulating prices of futures transactions, including "declaring bogus transactions", "confusing others with false or misleading information", "scalping" and "squeezing the shorts" and stipulates what elements will constitute such behaviors, provides for liability in Article 6 and specifies the effective date in Article 7. Among others, Article 2 prohibits any entity or individual from submitting and declaring trading contracts not for the purpose of concluding deals but in an attempt to affect prices of futures transactions and then conducting transactions contrary to the declared buying or selling or seeking other unjustified interests. Article 3 bans any entity or individual from fabricating or disseminating untruthful or misleading information to affect prices of futures transactions and then transacting relevant deals or seeking other unjustified interests.