Chapter 1 General Provisions

Article 1These Measures are formulated in accordance with the Shanghai Clearing House (hereinafter referred to as SHCH) Rules of CCP Clearing Services as well as other relevant rules of SHCH,in order to further improve the services for clearing members, and safeguard the legitimate rights and interests of clearing members.

Article 2These Measures apply for participants of CCP clearing services, including clearing members of SHCH and applicants for clearing membership.

Chapter 2 Clearing Membership

Article 3SHCH adopts clearing membership system for the CCP clearing services, with clearing members being categorized into direct clearing members (DCM), general clearing members (GCM) and special clearing members (SCM).

Article 4Direct clearing members may participate in the CCP clearing services for their proprietary trades. They can be classified into Class A, Class B and Class C direct clearing members.

Class A direct clearing members can participate in all the CCP clearing services for their proprietary trades. Class B direct clearing members can participate in two or more CCP clearing services for their proprietary trades. Class C direct clearing members can only participate in one CCP clearing service for their proprietary trades.

Article 5General clearing members can participate in the CCP clearing services for their proprietary and client trades. They can be categorized into SHCH general clearing members and product general clearing members.

SHCH general clearing members can participate in all the CCP clearing services for their proprietary and client trades. Product general clearing members can participate in all the CCP clearing services for their proprietary trades and the CCP clearing services for client trades of corresponding products.

Non-clearing members may participate in the CCP clearing services indirectly through general clearing members.

Article 6Specific provisions on the participation of special clearing members in the CCP clearing services shall be formulated separately.

Chapter 3 Member Application

Article 7Applicants or clearing members should meet relevant requirements and standards in terms of credit, businesses, risk management, technology and personnel. SHCH shall review applicants based on the prescribed conditions and conduct ongoing evaluation on clearing members.

Article 8To apply for direct clearing membership, in principle, applicants shall meet requirements listed below on an ongoing basis:

1.Be a corporate or an institution registered in accordance with the law;

2.Have the qualification of relevant service operation;

3.Have signed the CCP Clearing Agreement of SHCH and other documents;

4.Register the net assets at the end of the last three fiscal years (net capital for securities companies) of no less than 2 billion yuan (or the equivalent value of foreign currency);

5.Receive the initial credit score no less than 55 for a banking financial institution, and no less than 50 for a non-banking financial institution;

6.The business operations meet the requirements of the comprehensive development for relevant CCP clearing services of proprietary business. Institutions applying for Class A direct clearing membership should have actively participated in the CCP clearing services of proprietary business;

7.Have the necessary business management rules, risk management rules, technical system, implementation plan of CCP clearing business policy and development, etc. for the CCP clearing services of proprietary business;

8.Have personnel with relevant business capabilities for CCP clearing services of proprietary business, and assign contact persons;

9.Comply with relevant rules stipulated by regulators, and have no records of major violation of laws and regulations within three years prior to applying for direct clearing membership, and have no major violation of regulations or default with respect to risk management;

10.Have a sound ability of continuous operation, and have not been suspended for rectification, trusteeship, takeover, reorganization and subject to other measures or administrative or judicial procedures that may affect the ability of continuous operation by administrative, judicial or regulatory bodies;

11.Meet other requirements set by SHCH.

Article 9To apply for product general clearing membership, in principle, applicants shall meet requirements listed below on an ongoing basis:

1.Have already become a Class A direct clearing member and actively participated in the CCP clearing services of proprietary business;

2.Register the net assets at the end of the last three fiscal years (net capital for securities companies) of no less than 10 billion yuan (or the equivalent value of foreign currency);

3.Receive the initial credit score no less than 65 for a banking financial institution, and no less than 60 for a non-banking financial institution;

4.The business operations meet the requirements of the comprehensive development for the relevant CCP client clearing services, and have actively participated in relevant CCP clearing services of proprietary business based on the actual business situation;

5.Have the necessary business management rules, risk management rules, technical system, implementation plan of CCP clearing business policy and development plan, etc. for the CCP client clearing services;

6.Have an independent team for client services with personnel possessing corresponding capabilities, and assign contact persons;

7.Meet other requirements set by SHCH.

Article 10To apply for general clearing membership, in principle, applicants shall meet requirements listed below on an ongoing basis:

1.Have already become a product general clearing member and actively participated in the proprietary and client CCP clearing services;

2.Register the net assets at the end of the last three fiscal years (net capital for securities companies) of no less than 10 billion yuan (or the equivalent value of foreign currency);

3.Receive the initial credit score no less than 70 for a banking financial institution, and no less than 65 for a non-banking financial institution;

4.Meet other requirements set by SHCH.

Article 11In cases where the applicant doesn’t meet relevant conditions, but is in line with relative requirements of policies and market development, or has issued guarantees satisfying specific requirements, it shall be deemed as meeting relevant conditions after being evaluated and approved.

Article 12After the application of clearing membership has been reviewed and approved, SHCH shall inform the applicants in written documents and announce it to the market.

Chapter 4 Ongoing Evaluation of Clearing Members

Article 13SHCH shall conduct ongoing evaluation on clearing members, including business evaluation, credit evaluation and annual evaluation, etc.

Article 14Business evaluation is the evaluation of the overall development of clearing members' proprietary and client business as well as the implementation of policies and rules and support for business innovation.

SHCH shall release the business evaluation program, regularly track, remind, evaluate the business, and notify the clearing members of the evaluation results. The business evaluation results are categorized into "qualified", "basically qualified" and "unqualified", which are used for dynamic management of the participation scope of clearing members in the CCP clearing services.

Article 15Credit evaluation is a general evaluation of the credit level of the clearing members or applicants, including initial credit evaluation, annual credit evaluation and dynamic tracking and evaluation, etc.

The credit evaluation shall be carried out in accordance with Measures for Credit Evaluation of Clearing Members of SHCH. The results of credit evaluation are used for qualification evaluation of clearing members, dynamic risk management, credit factor and credit coefficient setting, etc.

Article 16The annual evaluation evaluates the general situation of clearing members in the previous year in terms of qualified CCP policy implementation, risk management, rules implementation, system security, service participation, AML and anti-terrorism etc.

SHCH shall issue annual evaluation program, conduct annual evaluation, and notify the clearing members of the annual evaluation results. The results of annual evaluation are categorized into "qualified", "basically qualified" and "unqualified", which are used for the dynamic management of the qualification of clearing members.

Chapter 5 Change and Termination of Clearing Membership

Article 17After a clearing member adds or withdraws from the relevant CCP clearing service, SHCH may change its clearing membership accordingly.

Article 18A clearing member may apply for the change or termination of its membership, but shall not transfer its membership to other institutions, except for the succession of clearing membership due to institutional restructuring, reorganization, merger, separation, name change or other circumstances.

If a clearing member applies for the change of its membership, it shall meet the conditions for relevant participation requirements. If a clearing member applies for the termination of its membership, SHCH shall examine the factors including the settlement of the claims and debts of the clearing member, market impact, etc., and will give feedback after evaluation.

Article 19Based on the business evaluation and credit evaluation of clearing members and the results of annual evaluation, etc., and cases of violation of regulations by clearing members in the Administrative Measures for Clearing members of CCP Clearing Services, relevant regulations, or non-compliance or default in participating in CCP clearing service, SHCH has the right to carry out dynamic management of the qualification and business scope of clearing members. Measures that will be taken include verbal warning, written warning, interview, explanation within a time limit, instruction for correction, circulated notice of criticism, collection of default damages, etc. depending on circumstances. In case of serious violations, the clearing member shall be restricted, suspended or terminated from participating in the relevant CCP clearing services, and its membership qualification shall be changed or terminated.

Article 20After comprehensive assessment, SHCH has the right to restrict or suspend the clearing member's participation in the relevant CCP clearing services or change the clearing membership if the following circumstances occur:

1. The result of business evaluation is basically qualified;

2. The decrease of the annual credit score is more than a certain range based on the relevant participation criteria;

3. The result of annual evaluation is basically qualified;

4. Other circumstances prescribed by SHCH.

Article 21SHCH has the right to terminate the clearing member's participation in the relevant CCP clearing business or terminate the clearing membership if the following circumstances occur:

1. The business evaluation results of the same service for three consecutive years are basically qualified or unqualified for any one year;

2. The annual credit score for three consecutive years has decreased by more than a certain range based on the relevant conditions of participation or in any one year the annual credit score for bank clearing members is below 50, or the annual credit score for non-bank clearing members is below 45;

3. The annual evaluation results for three consecutive years are basically qualified or unqualified for any one year;

4. Repeated business errors with adverse effects;

5. Punished by regulatory authorities due to serious violations of laws and regulations, which has a significant negative impact on the performance of the obligations of clearing members;

6. Be revoked, closed or dissolved in accordance with the law;

7. Administrative or judicial procedures such as takeover, bankruptcy, reorganization, liquidation etc., are taken, or be subject to measures such as suspension for rectification, trusteeship, takeover, revocation, closure, etc. by the regulator;

8. The business license of a legal person or the license related to business operation has been revoked;

9. Deterioration of operating and financial conditions, inability to pay off due debts, or in obvious lack of solvency, no longer have the ability to continue operation, and being unable to fulfill the obligations of clearing members;

10. Serious violations of the Rules of CCP Clearing Services, service guidelines for CCP clearing, relevant agreements, risk management or other relevant rules, resulting in significant adverse effects, and failing to complete rectification or refusing to do so within the specified time;

11. Falsehood, malicious concealment or fraud in the process of applying for clearing membership or participating in CCP clearing service;

12. The criteria for the participation of clearing members stipulated by SHCH are not met and cannot be met within the time limit stipulated by SHCH;

13. Other circumstances prescribed by SHCH.

Article 22After examining and approving the application of change or termination of the clearing membership, SHCH shall notify the applicant in written documents, and announce it to the market after completing the relevant formalities.

Chapter 6 Supplementary Provisions

Article 23This Measure shall be explained by SHCH.

Article 24This Measure shall take effect as of the date of its promulgation.