(1) The contract with the Shanghai and Shenzhen 300 Index as the target can play a flagship role in China's stock index futures product series in the future and has the potential to occupy a dominant position in the market. The Shanghai and Shenzhen 300 Index is compiled and maintained by CSI Index Co., Ltd., which is jointly funded by Shanghai and Shenzhen Stock Exchanges. The constituent stocks include 300 stocks. The index draws lessons from the mature compilation concept of the international market, and adopts advanced technologies such as adjusting the rights and interests, filing at different levels, and adjusting the sample buffer. Since its release, the correlation between the index and the Shanghai Composite Index has exceeded 97%, which has a good market representation. CICC's first stock index futures contract takes the Shanghai and Shenzhen 300 index as the transaction target, which can play a flagship role in China's future stock index futures product series and has the potential to occupy a dominant position in the market. After the listing of Shanghai and Shenzhen 300 index futures products, the Exchange will gradually introduce index futures products by market and industry according to market demand, forming a series of index futures products to meet the needs of investors at different levels.

(2) The Shanghai and Shenzhen 300 Index has a high market coverage and the weights of major constituent stocks are scattered, which can effectively prevent possible index manipulation in the market. According to statistics, by the end of August 2006, the total market value coverage of the Shanghai and Shenzhen 300 Index was about 70%, and the circulating market value coverage was about 59%. The cumulative weight of the former 10 constituent stocks is about 19%, and the cumulative weight of the top 20 constituent stocks is about 28%. The characteristics of high market coverage and scattered weights of constituent stocks determine that the index has good anti-manipulation ability.

(3) The industry distribution of the constituent stocks of the Shanghai and Shenzhen 300 Index is relatively balanced, and it has strong resistance to the cyclical fluctuations of the industry. The index futures with this target have good hedging effect and can meet the risk management needs of investors. The components of the Shanghai and Shenzhen 300 Index cover energy, raw materials, industry, finance and other industries, and the market value coverage of companies in various industries is relatively balanced. This feature enables the index to resist the cyclical fluctuations of the industry and has a good hedging effect.