SHFE and INE Issue Guidelines on Disposal of Collateral Disposal Business

On September 25, 2023, the Shanghai Futures Exchange (“SHFE”) and the Shanghai International Energy Exchange (“INE”) released the Guidelines of the Shanghai Futures Exchange on Disposal of Marketable Securities Posted as Margin Collaterals (“SHFE Guidelines”)and the Guidelines of the Shanghai International Energy Exchange on Disposal of Assets Posted as Margin Collaterals.

There are 22 articles in the SHFE Guidelines, including General Provisions, Conditions and Methods for Disposal, Disposal Notice and Selection of Marketable Securities, Disposal of Government Bonds, Disposal of Standard Warrants, and Miscellaneous. It is stipulated that the SHFE may dispose of the marketable securities posted by a Member as margin collaterals if the Member: (1) fails to pay or cannot fully pay its trading margin and related debts; or (2) falls into other circumstances as specified by the Exchange.