Article 1 (Purpose and Legal Basis) These Interim Provisions are formulated in accordance with the Notice of the State Council on Issuing the Framework Plan for China (Shanghai) Pilot Free Trade Zone (State Publication [2013] No. 38) and the Special Provisions on Commodities Spot Market Trading (Interim) (Ministry of Commerce, the People’s Bank of China, and China Securities Regulatory Committee Decree [2013] No. 3), with an aim to facilitate the building of commodity spot markets in the China (Shanghai) Pilot Free Trade Zone (referred to hereafter as the “PFTZ”), standardize trading activities, protect legitimate rights and interests of all trading parties, promote modern logistics services, and foster the sound development of commodity spot markets that serve the international market.

Article 2 (Definition) The “Commodity Spot Markets” specified herein refers to the premises or online trading platforms where buyers and sellers conduct public, constant or regular spot transactions of commodities, and are provided with support Anchorservices such as information services and logistics support.

AnchorThe “Commodity Spot Market Operators” specified herein (referred to hereafter as the “Market Operators”) refers to the legal persons who establish commodity spot markets in accordance with laws and regulations, formulate rules and regulations associated with commodity transactions, and provide premises and support services for spot transactions of commodities.

Article 3 (Authorities and Responsibilities) The Shanghai Municipal Commission of Commerce shall provide instructions on the commodity spot market supervision within the PFTZ.

The Shanghai Municipal Office of Financial Service shall be responsible for the coordination with Anchornational financial regulatory authorities.

The Administrative Committee of the PFTZ shall:

Propose plans for the development of commodity spot markets within the PFTZ;
Coordinate with local authorities where the spot market is registered;
Establish a joint supervisory and regulatory mechanism with related government bodies; and
Improve related rules and regulations.
Article 4 (Market Registration) Market Operators shall submit their project plans to the Administrative Committee of the PFTZ, which shall include: Anchorinvestment entityAnchorAnchorAnchorAnchor, capital subscription, trading rules, cash settlement and Anchorphysical Anchordelivery management mechanism,Anchor and other related matters, in case their commodity spot market contains the following characteristics:

     1. Products intended for transactions shall be commodities that are imported or exported in large quantities;

     2. Transaction prices exclude import duties and value-added taxes;

     3. Companies will make the import declaration, or have made the export declaration of commodities for settlement.

    Market Operators shall have the background in commodity trading, and have no violation records over the past three years of operation. Markets of the same kind are encouraged to integrate into a single entity.

    The Administrative Committee of the PFTZ shall verify the compliance status of the construction project plan, and provide opinions within ten working days, with which the company can register in the AnchorIndustrial & Commercial Administrative Bureau.

Article 5 (Operation and Management) Market Operators in the PFTZ shall conduct business in accordance with the Special Provisions for Transactions in Commodity Spot Markets (Ministry of Commerce, The AnchorPeople' Bank of China and China Securities Regulatory Commission Decree [2013] No. 3) and in line with the following provisions:

     1. Market operators shall develop business rules for transaction, cash custody, settlement, warehousing, information release, risk control and market management, and have in place applicable laws and regulations, in order to ensure that transaction, custody, settlement and warehousing are dealt separately, and all risks are strictly controlled and properly handled.

     2. Market Operators shall ensure that the capital generated in the transaction from parties involved is deposited in the special cash account opened by the cash custody institution of the third party. The account shall not be encroached or embezzled, and shall be cleared by the responsible bank or an independent clearing-house.

    3. Market operators shall establish sound management and settlement mechanisms for warehouse receipts, and have in place an independent third party system for receipt registration and publication, so as to guarantee the authenticity and the settlement of the receipts. The designated warehouses must be bonded warehouses in the PFTZ or other bonded warehouses that meet the requirements set by the Customs.

4. Market Operators or their staff may not be involved in any market transaction by any means.

Article 6 (Other Matters) These Provisions shall enter into effect on May 1, 2014 and expire on April 30, 2016. Shanghai Municipal Commission of Commerce, Shanghai Municipal Office of Financial Service and the Administrative Committee of the PFTZ reserve the right to the final interpretation of these Provisions.