Identification of illegal futures trading in commodity spot market

1 identification unit

(1) Illegal gold futures trading activities

According to the Opinions of the Office of the Central Organization Establishment Committee on Further Defining the Supervision Responsibilities of the Gold Market and Gold Derivatives Trading (No.39 of the Central Organization Establishment Office [2011]), the People's Bank of China is responsible for organizing activities such as identifying illegal gold futures trading.

(two) illegally engaged in commodity futures trading activities other than gold.

According to the "Special Provisions on Commodity Spot Market Trading (Trial)" issued by the Ministry of Commerce, the People's Bank of China and the China Securities Regulatory Commission, the identification of illegal futures trading activities in the commodity spot market is the responsibility of local securities regulatory bureaus.

(three) illegal futures trading activities of special varieties.

There is no clear administrative identification unit, such as rights and interests (property rights, equity rights, creditor's rights, intellectual property rights, etc.). ), securities, indexes, interest rates, exchange rates, etc. , can be submitted to the the State Council Inter-Ministerial Joint Conference Office for administrative identification.

2 identification program

Illegal gold futures trading activities shall be submitted by the local public security organ to the central branch of the local people's bank for administrative confirmation.

Illegal futures trading activities of commodities other than gold shall be submitted by the local public security organ to the local securities regulatory bureau for specific administrative confirmation.

Illegal futures trading activities of special varieties can be submitted to the Office of the Inter-Ministerial Joint Conference on Clearing and Rectifying Various Trading Places in the State Council for administrative identification, or to the Economic Investigation Bureau of the Ministry of Public Security for administrative identification by the local economic investigation department.

3 identify the content

Mainly whether the behavior of the persons involved and their members (franchisees and agents) belongs to "illegally organizing futures trading activities" or "engaging in futures business without authorization".

4 identification standard

The criteria for identifying illegal futures trading activities in the commodity spot market are to examine whether illegal futures trading activities are prohibited by the policy and whether the trading activities in the commodity spot market belong to illegal futures trading activities. According to the provisions of relevant laws and regulations, it is necessary to grasp the objective elements and formal elements in the specific review, so as to accurately and qualitatively judge whether the trading activities in the commodity spot market belong to "illegally organizing futures trading activities" and "engaging in futures business without authorization" as stipulated in Article 75 of the Regulations on the Administration of Futures Trading, so as to determine whether the trading platform violates the prohibitive provisions of Articles 4 and 6 of the Regulations on the Administration of Futures Trading and is suspected of engaging in illegal futures trading.

(1) objective factors

According to the spirit of document 1 1 1, as far as the objective requirements are concerned, standardized contracts are mainly used as trading objects, allowing traders to close their positions by hedging, rather than taking physical delivery as the purpose or not having to deliver physical goods.

Therefore, in the trial of related party transactions, we should focus on the following aspects:

A. Is the investor qualified for delivery?

Transactions on spot trading platforms often involve thousands of ounces of silver and hundreds of tons of crude oil. In order to claim that it is a spot transaction, the trading platform often claims that investors can click the delivery button at any time for delivery. However, the vast majority of investors are natural persons. If they deliver such a large amount of goods (especially sales), is it illegal to operate without a license? Therefore, investors must close their positions to settle transactions. Although there are natural persons in legal futures trading, natural persons cannot enter the delivery month, so there is no delivery problem. Therefore, whether investors are qualified for delivery has become a key factor affecting the transformation of spot trading platforms into illegal futures trading.

B. Do the spot platforms have real warehouses and warehouse receipts?

The main purpose of the spot market is to speed up the circulation of spot goods, so the real spot is the foundation. If the spot platform does not have enough warehouses and warehouse receipts (for example, the daily trading volume is as high as tens of thousands of lots, but only a few warehouse receipts or even none), then the main purpose of its trading is not to settle accounts, but only to hedge and close positions, which will turn into illegal futures trading.

C. Review the delivery rate of the spot trading platform

Calculate the total transaction amount and final settlement amount of the spot trading platform, so as to judge whether the trading purpose of the spot trading platform is hedging or settlement.

(2) Form requirements

As far as the formal requirements are concerned, it mainly focuses on examining whether to conduct standardized contract transactions by centralized trading.

A. Standardized contracts

The so-called standardized contract, according to the definition in document11,refers to a contract with relatively fixed terms except price, delivery place and delivery time. Traders take this contract as the trading object. When concluding a contract, they can buy and sell without paying the full amount, and only need to pay a certain percentage of the value of the goods as a deposit. After the conclusion of the contract, traders are allowed to settle their rights and obligations through reverse operation, hedging liquidation and other means.

B. Centralized trading

The key to the trial of illegal futures trading cases in the commodity spot market is to determine whether centralized trading has been implemented in the spot trading platform.

The so-called centralized transaction means that the spot market arranges many buyers and sellers to conduct transactions together (including but not limited to personnel concentration, information concentration and commodity concentration), and provides various facilities and convenient arrangements to facilitate the transaction. Centralized trading can be subdivided into call auction, continuous bidding, electronic matching, anonymous trading, market maker mechanism and other trading methods.

Call auction refers to the process in which buyers and sellers declare their own transactions according to their acceptable psychological prices, and all effective declarations are centrally matched by the spot market electronic trading system.

Continuous bidding refers to the spot market in accordance with the "price priority, market priority" and other principles to form a transaction price. If the highest buying price is the same as the lowest selling price, the price is the transaction price; When the purchase price is higher than the selling price, the price quoted by the seller for the first time is the transaction price.

Electronic matchmaking refers to a trading mode in which a large number of buyers and sellers make simultaneous matchmaking, click trading or other means through electronic trading system to facilitate the establishment of contracts.

Anonymous transaction refers to a transaction in which the trader does not need to know the identity, age, credit status and other transaction information except price. Because the subject matter of the transaction can exist independently and is not influenced by its owner, it greatly improves its standardization and liquidity level, thus becoming a unique trading method in the capital market. This trading method is not suitable for the commodity spot market because of its general laws different from spot trading.

Market-making mechanism refers to a trading system in which legal persons and other economic organizations with certain strength and credibility constantly provide quotations to buyers and sellers, and pay funds or commodities according to their own quotations to clinch a deal with them, thus providing immediacy and liquidity for the market and making profits through bid-ask spreads. Because the purpose of market makers buying and selling goods is not to obtain the ownership of goods, but mainly to provide liquidity for buying low and selling high, this is completely inconsistent with the original intention of spot trading, and the market maker mechanism is not suitable as a trading system in the spot market.

5 certain nature

The nature of the determination by China Securities Regulatory Commission or its dispatched office on whether there is illegal futures trading in relevant trading places.

The the State Council Document clearly defines the nature of illegal securities and futures trading activities. The Decision of the State Council on Cleaning up and Rectifying Various Trading Places to Effectively Prevent Financial Risks (Guo Fa [2011] No.38) stipulates that local trading places shall be subject to daily supervision, illegal treatment and risk disposal by the provincial people's government according to the principle of territorial management. The Reply of the State Council on Agreeing to Establish an Inter-Ministerial Joint Meeting System for Clearing and Rectifying Various Trading Places (Guo Han [2012] No.3) stipulates that if the provincial people's government, relevant departments, public security organs and judicial organs have doubts about the nature of trading places suspected of engaging in illegal securities and futures trading activities, they can submit them to the joint meeting for confirmation, and the CSRC will issue confirmation opinions according to law on the basis of soliciting opinions from relevant units.

In essence, the CSRC's qualitative opinion is to provide professional support for the authorities to investigate and deal with illegal securities and futures activities at the request of the CSRC. This opinion is only for the reference of the competent authorities and cannot replace the conclusion made according to law. Whether trading activities are illegal or not must be judged by the competent authorities on the basis of investigation and verification. Investors who believe that a certain transaction constitutes illegal futures trading shall submit it to the competent authority for investigation and handling.