The futures company is an intermediary institution for futures business in the futures market and an important participant in China's futures market. Defining the legal status, business scope and regulatory measures of futures companies is an important issue to be solved in the newly promulgated Regulations on the Administration of Futures Trading (hereinafter referred to as the new regulations). The new regulations mainly make the following provisions:

First of all, make clear the financial institution attributes of futures companies.

1999 "Provisional Regulations on the Management of Futures Trading" (hereinafter referred to as "Provisional Regulations") does not clarify the legal attributes of futures companies (former futures brokerage companies), which affects the normal development of futures companies. For a long time, futures companies have implemented the accounting system for catering service enterprises, and the accrued risk reserve cannot be deducted before income tax, and so on. Article 15 of the new regulations stipulates that a futures company is a financial institution established to operate futures business in accordance with the Company Law of People's Republic of China (PRC) and the Regulations. In this way, the legal status of financial institutions of futures companies is clarified, which provides a good institutional environment for the healthy and stable development of futures companies.

Second, appropriately expand the business scope of futures companies.

In order to clean up and rectify the futures market at that time, the Provisional Regulations stipulated that futures brokerage companies could only engage in domestic futures brokerage business, and it was forbidden to engage in overseas futures brokerage business, which was not conducive to the further development of futures companies. Under the premise of establishing and improving the basic risk early warning system and strengthening supervision, the new regulations rename the futures brokerage company as a futures company, and appropriately relax the business scope of the futures company: the futures company can apply for operating domestic futures brokerage, overseas futures brokerage, futures investment consulting and other futures businesses stipulated by the the State Council futures regulatory agency, and the the State Council futures regulatory agency issues licenses according to its business type (Article 17 of the new regulations). The new regulations increase the overseas futures brokerage business, mainly considering that with China's accession to WTO and the acceleration of international economic integration, more and more enterprises need to use the overseas futures market for hedging, and domestic enterprises can hedge and invest by introducing futures companies to participate in overseas futures trading. Futures investment consulting business is conducive to giving full play to the professional background of futures companies and laying the foundation for standardizing and developing the futures investment consulting market.

At the same time, the new regulations restrict the business of futures companies. For example, unless otherwise stipulated by laws, administrative regulations or the the State Council futures regulatory authority, a futures company may not engage in activities unrelated to futures business. A futures company shall not provide financing for its shareholders, actual controllers or other related parties, and shall not provide external guarantees. At the same time, considering that financial futures are in the initial stage, in order to prevent risks and avoid conflicts of interest between futures companies' proprietary business and brokerage business, a "firewall" is set up, so the new regulations do not stipulate that futures companies can engage in futures proprietary business.

Third, strengthen the supervision of futures companies.

Because the futures market mechanism is complex and risky, the new regulations stipulate a strict examination and approval system for the establishment of futures companies and futures business qualifications. According to the new regulations, the establishment of a futures company should be approved by the the State Council futures regulatory agency and registered with the company registration authority. In terms of futures business, no unit or individual may engage in futures business without the approval of the the State Council Futures Regulatory Authority (Article 15 of the new regulations); The business of a futures company shall be licensed, and the the State Council Futures Regulatory Authority shall issue licenses according to its commodity futures and financial futures business (Article 17 of the new regulations). In addition, the corresponding administrative punishment is stipulated for the illegal act of illegally establishing or disguised as a futures company and engaging in futures business without authorization (Article 78 of the new regulations).

At the same time, on the basis of summarizing the practical experience of China's futures market for many years and drawing lessons from international practices, the new regulations refer to the relevant provisions of the Securities Law, increase the supervision and management measures for futures companies, and strengthen the means of law enforcement. First, when performing their duties, the the State Council futures regulatory agency can conduct on-site inspections of futures companies, enter places where suspected illegal acts occur for investigation and evidence collection, and inquire about the margin accounts and bank accounts of units related to the investigated events (Article 51 of the new regulations); Second, if the futures company does not meet the rules of going concern or has operational risks, and it still fails to make corrections after being ordered to rectify, the the State Council futures regulatory agency may restrict or suspend some futures business of the futures company and order the replacement of directors and senior management personnel (Article 59 of the new regulations); Third, if a futures company operates illegally or has serious risks, which seriously jeopardizes the order of the futures market and damages the interests of customers, the the State Council futures regulatory agency may take regulatory measures such as ordering it to suspend business for rectification, appointing other institutions to take custody and take over (Article 60 of the new regulations).