Strengthen the process supervision of futures companies and promote the high-quality development of industry institutions

Recently, The General Office of the State Council forwarded the Opinions of the China Securities Regulatory Commission and other departments on Strengthening Supervision to Prevent Risks and Promote the High-quality Development of the Futures Market (hereinafter referred to as the "Opinions"), and made a comprehensive deployment of the new era and new journey to promote the high-quality development of the futures market and better serve the overall situation of Chinese modernization. This is a landmark guiding document in the development of our futures market. China Futures Industry Association (hereinafter referred to as the Association) conscientiously study and fully understand the significant and far-reaching significance of the "Opinions", deeply understand the rich connotation of the "Opinions", and resolutely implement the requirements of the "Opinions".

Further improve the political position, and deeply understand the great significance and spiritual connotation of the Opinions

The Party's 20th National Congress made strategic plans for comprehensively promoting Chinese-style modernization, and the Central Financial Work Conference put forward the goal of accelerating the construction of a strong financial country. As an important part of the financial system, the futures market shoulders an important mission in promoting the construction of a strong financial country and serving the Chinese-style modernization. High-quality development is the essential requirement of Chinese-style modernization. Only by establishing and improving the rules system and institutional mechanism compatible with high-quality economic development can the futures market achieve its own high-quality development and provide strong support for Chinese-style modernization and the construction of a financial power.

Services have been fully deployed to build a new development pattern and achieve Chinese-style modernization. The Opinions focus on strengthening supervision of the futures market, preventing risks and promoting high-quality development, and put forward the development goals of the futures market in the next five years, 2035 and the middle of this century in stages. It has deployed integrated and all-round policies and measures covering futures market trading, whole-process supervision of institutions, risk prevention, service for the quality and efficiency of the real economy, development of financial futures and derivatives markets, opening to the outside world, investigation and punishment of violations of laws and regulations, and regulatory cooperation, pointing out the direction for promoting high-quality development of the futures market. An inspiring and inspiring blueprint for the development of the futures market was drawn up.

Strengthen the whole process supervision of futures companies and promote the high-quality development of industry institutions

The futures company is the legal member of the association. As the core intermediary connecting the main bodies of the futures market, the futures company is an important part of the function of the futures market and a key link for the high-quality development of the futures market.

With the development of the futures market for more than 30 years, the comprehensive strength of futures companies has been continuously enhanced, the business scale has gradually expanded, the service model has been continuously increased, and the service ability has been continuously improved. As of August 2024, there are 150 futures companies in China, with total assets of 1.69 trillion yuan and customer rights and interests of 1.45 trillion yuan. At present, industry institutions have initially set up a multi-level futures intermediary service system such as futures brokerage business, trading advisory business, asset management business, market making business and derivatives trading business. Gradually explore "insurance + futures", warehouse receipt services, basis trade, trade with rights and other effective models with futures characteristics to serve the real economy.

However, it should also be noted that there is still a large gap between the comprehensive strength and service capacity of the current futures company and the growing risk management needs of the real economy, and the high-quality development requirements of the futures market. Compared with other financial institutions, the governance level, risk control ability, service quality and efficiency of futures companies need to be further improved. In response to the current problems of futures companies, the Opinions actively implement the decision-making and deployment of the Central Financial Work Conference, adhere to the concepts of institutional supervision, behavioral supervision, functional supervision, penetrating supervision and continuous supervision, and comprehensively strengthen the supervision of futures companies.

The first is to strengthen the penetrating supervision of the shareholders and actual controllers of futures companies. The infringement of interests of futures companies and traders by shareholders and real controllers is an important source of risks. Bringing shareholders and real controllers into supervision and strictly preventing institutions and personnel that do not meet the prescribed conditions from controlling futures companies is an important measure to prevent and resolve financial risks.

Second, strengthen the corporate governance of futures companies. Good corporate governance is the basis and guarantee of a company's legal compliance, stable and orderly operation. The Opinions urge futures companies to establish a clear governance structure and a standardized governance system. In terms of personnel, it not only strengthens the requirements of "key minorities" such as directors, supervisors and senior managers, but also puts forward standard requirements for practitioners; In terms of safeguarding the interests of the company, clearly strengthen the monitoring of connected transactions, and prohibit related parties from illegally occupying and misappropriating the assets of futures companies.

Third, comprehensively regulate the business activities of futures companies and their subsidiaries. The "Opinions" implement the spirit of the Central Financial Work Conference, and fully incorporate the business activities of futures companies and their subsidiaries into the supervision, leaving no regulatory gaps and blind areas. In view of the shortcomings and weaknesses existing in the current business of futures companies and their subsidiaries, the Opinions put forward targeted standardized development directions. It is necessary to further regulate the marketing behavior of brokerage business, standardize the issuance of research reports of trading consulting business, guide futures companies to focus on asset management business in the field of futures and derivatives, strengthen the supervision of market making and derivatives trading business of futures companies, and strengthen the supervision of information technology of futures companies.

Fourth, establish and improve the long-term risk clearing mechanism of futures companies. On the premise of preventing and resolving financial risks, the "Opinions" establish a long-term mechanism for risk clearance of futures companies, take the license management of futures companies as the starting point, and give differentiated policies in resolving risk paths, clearing individual risks, maintaining stability, and long-term development. For futures companies that do not meet the requirements for sustainable operations and seriously affect normal operations, the futures business license shall be revoked according to law; Encourage mergers and reorganizations to smoothly resolve the risks of futures companies. At the same time, support qualified futures companies to expand capital replenishment channels, improve comprehensive strength and anti-risk ability.

Effectively perform the self-regulatory responsibilities of the association, and strive to improve the quality of operation of industry institutions

The "Opinions" clearly put forward that it is necessary to deepen the supervision and cooperation of the futures market, optimize the allocation of resources for futures supervision, strengthen the administrative supervision function of the China Securities Regulatory Commission on the futures market, and improve the self-regulatory management function of the futures exchanges and futures industry associations. Self-discipline management is an important part of the "five-in-one" futures supervision system, the futures industry Association will be in the unified deployment of the CSRC, actively play the "self-discipline, service, transmission" self-discipline management function, carry out the "Opinions" training work, guide and promote the industry institutions to implement the implementation of the policy requirements, and jointly promote the high-quality development of the futures market.

First, accelerate the construction of a self-regulatory management system in line with the national conditions of the city, and give full play to the role of self-regulatory management. Resolutely implement the "Opinions", establish and improve the self-regulatory rules system that is compatible with the futures and derivatives law, revise and improve the self-regulatory management system of industrial institutions, such as corporate governance, business compliance, employee management, and risk prevention, adhere to the effective connection and coordination between self-regulatory management and administrative supervision, actively play the role of self-regulatory management, and strive to eliminate regulatory gaps and blind areas.

The second is to guide futures companies to highlight functional positioning and continue to improve the quality and efficiency of serving the real economy. Actively guide and support industry institutions to firmly establish a sense of the overall situation, strengthen the sense of mission, always put functionality in the first place, focus on serving the real economy, focus on the priority of high-quality development, strengthen the construction of intermediary capabilities, professional capabilities and service capabilities, give full play to the characteristics and advantages of futures, and better serve Chinese modernization.

The third is to increase self-discipline management supervision and inspection, and implement the whole process supervision requirements of futures companies. Strengthen the supervision and inspection of the whole process of business activities, practice behavior and personnel management of futures companies and their subsidiaries, strictly investigate and punish violations of laws and regulations, and give play to the role of disciplinary and other disciplinary management measures in punishment and warning. Make good use of the industry credit management list mechanism, timely record illegal behaviors into the industry information integrity database, and effectively perform the function of self-discipline management.

Fourth, highlight the leading role of self-discipline and promote the formation of a healthy and sound industry culture. Establish and improve the system of self-discipline rules for the construction of industry culture, promote the implementation of the main responsibility of the cultural construction of futures companies and their subsidiaries and prevent the moral hazard of practitioners. To guide industry institutions and their practitioners to vigorously promote and practice the financial culture with Chinese characteristics of "honesty and trustfulness, seeking profit from righteousness, prudence, integrity and innovation, and compliance with law". Strengthen the professional ethics education of employees, guide employees to abide by professional ethics and strictly observe the moral bottom line.

Fifth, strengthen the construction of the futures talent team to provide a strong guarantee for the high-quality development of the futures industry. Talent is the core driving force for the high-quality development of the futures industry. The association will increase the training support for futures talents, and establish and improve the industry talent training mechanism according to the actual market and the needs of talent team construction. Continue to increase the supply of training courses such as product design, risk management, internal control, and customer service, innovate the learning and communication methods of industry talents, and explore the establishment of a two-way talent exchange mechanism between the industry and industrial enterprises.

The direction is clear, the goal is set. Under the strong leadership of the Party Central Committee and the overall deployment of the CSRC Party Committee, the China Futures Industry Association will adhere to the functional positioning of self-regulation, set goals, be down-to-earth, and work for a long time to promote the construction of an honest and trustworthy, professional and stable, efficient service intermediary team, and contribute to the high-quality development of the futures market.