China Insurance Regulatory Commission, Tentative Measures for the Participation in Financial Derivatives Trading by Insurance Proceeds

中国保险监督管理委员会保险资金参与金融衍生产品交易暂行办法

January 10, 2013 | BY

CLP Temp &

Participation in financial derivatives trading by insurance proceeds is for hedging purpose only.

Clp Reference: 3910/12.10.12 Promulgated: 2012-10-12 Effective: 2012-10-12

Issued: October 12 2012
Effective: as of date of issuance
Interpreting authority: China Insurance Regulatory Commission


Applicability: These Measures shall govern the participation by insurance group (holding) companies, insurance companies and insurance asset management companies lawfully established in the PRC (hereinafter collectively referred to as “Insurance Institutions”) in financial derivatives trading (Article 2).

For the purposes of these Measures, the term “financial derivative” (Derivative) means a financial contract the value of which is dependent on one or more underlying assets, indices or specific events, and includes forwards, futures, options and swaps.

For the purposes of these Measures, the term “financial derivatives trading” (Derivatives Trading) means domestic Derivatives Trading and excludes overseas Derivatives Trading (Article 3).


Main contents: An insurance group (holding) company or insurance company may itself participate in Derivatives Trading or it may, in accordance with these Measures and relevant provisions, appoint an insurance asset management company or another professional management firm that satisfies the provisions of the China Insurance Regulatory Commission (the CIRC) to participate in Derivatives Trading to the extent authorised (Article 4).

Participation in Derivatives Trading by Insurance Institutions shall be solely for the purpose of hedging or avoiding risks, not for investment purposes, including:


(1) hedging or avoiding existing asset, liability or overall corporate risks; and


(2) hedging against risks to assets that are to be purchased within one month or locking in their future transaction price.


For the purposes of Item (2) of this Article, the term “assets that are to be purchased” means assets that the Insurance Institution has decided by its investment decision procedure that it will purchase; if the assets are not purchased within one month from the date on which the decision was made or the purchase of such assets is abandoned during the aforementioned period, the relevant Derivatives shall be terminated, liquidated or closed out after the expiration of the prescribed period or within five trading days from the date on which the decision was made (Article 5).


If an insurance group (holding) company or insurance company wishes to participate in overseas Derivatives Trading, it shall comply with provisions on the overseas investment of insurance proceeds, appoint an overseas investment manager to carry out relevant matters as authorised and include Derivatives trades in its business management system (Article 33).


Non-insurance funds that an Insurance Institution manages on behalf of others may be handled in accordance with the contract and with reference to these Measures (Article 34).

clp reference:3910/12.10.12(4) issued:2012-10-12 effective:2012-10-12

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