Linklaters advised the Futures Industry Association (FIA) and its members, comprising international banks, international exchanges, Chinese banks and futures exchanges, on their submission to the Standing Committee of the National People’s Congress (NPC) on the project consultation on the recently published Futures Law.
The proposed Futures Law represents an important step in establishing a comprehensive legal and regulatory framework governing the operation of futures markets in Mainland China. The new law establishes rules for the trading, clearing and settlement of futures contracts as well as the effective supervision of exchange participants, clearing houses, investors, traders and clearing members.
The Futures Bill also extends to the exploitation of over-the-counter derivatives (including centrally cleared and non-cleared derivatives) and provides protection for the enforceability of close-out and close-out agreements. guarantee.
In addition to welcoming the objectives and provisions of the policy, the FIA presents the main observations and considerations on the draft Futures Law, in areas such as the finality of trading, settlement and settlement actions. management of defaults regarding forward transactions, client clearing for OTC derivative transactions transactions and cross-border requests, in its submission to the NPC.
The Linklaters team was led by a structured and derivative finance partner Chin-Chong Liew, with the support of lawyer Simon Zhang and managing partner Ying Zhou.
Partner, Chin-Chong Liew, commented :
“After nearly 30 years of disruption, the mainland Chinese futures market will finally benefit from long-awaited legislation providing legal protection for a stable and healthy development of the market. We believe that the new law will provide a solid basis for foreign participation in growing Chinese futures markets as well as participation of Chinese houses in international markets. We are proud to have had the opportunity to play our role by working closely with the FIA and supporting its members in their submissions of key considerations to the Futures Bill.
Linklaters’ leading structured finance and derivatives team is known for its innovative and market-leading transactions. The team continually provides solutions for structurally complex transactions that help clients navigate the ever-changing nature of regulation and financial markets in China and across Asia. Recent transactions have involved advising the Shanghai clearinghouse and a number of global banks on closing derivative transactions, including amending the ISDA, GMRA and other derivative documents, and advising Chinese futures exchanges on their internationalization initiatives and offshore market participants on their participation in onshore futures trading.