On 20 Apr. 2022, the Standing Committee of the National People’s Congress passed the Futures and Derivatives Law(《中華人民共和國期貨和衍生品法》), which will take effect on 1 Aug. this year.
It is China’s first law on futures and financial derivatives. It is noteworthy that China has been the world’s largest futures market for agricultural products, non-ferrous metals, coke, thermal coal, and ferrous building materials for many years.
The Futures and Derivatives Law regulates various aspects, including the trading in futures and derivatives, futures settlement and delivery, protection for futures traders, supervision of futures trading institutions and futures service institutions, operation of futures trading venues and futures clearing institutions, self-regulatory organizations of the futures industry, supervision and administration of the futures market, cross-border supervision and collaboration, and legal liability.
Since the reform and opening up, China has gradually established a legal framework to govern its financial system. However, only the futures industry has not yet been regulated among the six major financial industries (i.e. banking, securities, insurance, futures, funds, and trusts). As a result, this area had long been a gap in the country’s legal framework for financial management.
The enactment of Futures and Derivatives Law finally fills this gap and completes the domestic legislation.
Cover Photo by Haugenzhays Zhang on Unsplash
Contributors: CJO Staff Contributors Team
