The China Securities Regulatory Commission (CSRC) has issued for public comment draft trial measures that would set a unified supervisory framework for derivatives transactions and related activities under its legal oversight. The draft defines derivatives trading as trading in swap contracts, forward contracts and non-standardised options contracts, and their combinations, and is positioned as implementing the State Council’s “Several Opinions” and the Futures and Derivatives Law. The draft covers the measures’ scope of application, the functional role of the derivatives market, and the conditions and procedures for developing derivatives contracts. It also sets out baseline trading rules for different contract types, a performance guarantee system, trader suitability criteria, enhanced monitoring and cross-market supervision, and prohibitions and restrictive requirements. Supervision is extended to derivatives business institutions and to market infrastructure, including derivatives trading venues, clearing institutions and derivatives trade reporting databases, alongside provisions on regulatory administration and legal liabilities. The CSRC said it previously consulted on the measures in 2023 and has since revised the text by incorporating feedback, including by refining business rules, strengthening expectations on institutions’ practice standards, internal controls, risk management and compliance management, and further detailing legal liability provisions. Following the consultation, the CSRC plans to finalise and implement the measures after completing the relevant procedures.

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