The New SPC Regulations on the Hearing of Futures Disputes: Striking a Better Balance
September 02, 2003 | BY
clpstaff &clp articlesNew SPC rules on disputes over futures trading focus on the primacy of contractual issues, and form a counterpoint to legislation that traditionally has focused on regulating the futures industry at the macro-level.
By Chua Eu Jin, Clifford Chance, Shanghai
On May 16 2003 the Supreme People's Court (the SPC) adopted a new set of regulations governing the hearing of futures disputes, and they are effective July 1 2003. What will be the impact on court procedures and dispute resolution in the hearing of such cases? Let's take a closer look at the Several Issues Concerning the Trial of Futures Dispute Cases Provisions (the Provisions) and the background to futures trading in China.
In the early 1990s, the Chinese futures market, with almost 50 different local futures exchanges governed by different rules and with lax enforcement, achieved notoriety for market volatility and trading scandals. Speculation was rampant and losses were high. Not surprisingly, the Chinese authorities felt the need to consolidate the market and bring it under greater control. Currently, futures trading is confined to three futures exchanges in Shanghai, Dalian and Zhengzhou. Aggregate turnover was about Rmb 4 trillion in 2002. Futures trading must be conducted at these designated exchanges and, as with securities transactions, are under the supervision of the China Securities Regulatory Commission (the CSRC).
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