Four Chinese Futures Exchanges Propose New Rules for Programmatic Trading Violations

On October 12, the Shanghai Futures Exchange (including its subsidiary INE), Zhengzhou Commodity Exchange, Dalian Commodity Exchange, and Guangzhou Futures Exchange simultaneously released announcements seeking public comments on revisions to their violation handling measures.

The proposed amendments aim to add clauses specifically targeting six categories of violations related to programmatic trading management. These include failure to report or verify client programmatic trading information as required; non-futures company members or special overseas non-broker participants conducting high-frequency trading in violation of regulations; breaches of host colocation resource and trading seat management requirements; failure to establish or effectively implement internal control, risk management, and compliance systems for programmatic trading leading to significant risks; failure to take corresponding measures during sudden events as required; and other behaviors violating exchange programmatic trading management rules.

Under the new provisions, if market participants commit any of these six violations, exchanges will first order them to rectify the situation. Depending on the severity, disciplinary actions may include warnings, circulated criticism, public condemnation, forced liquidation, suspension of opening positions for up to 12 months, suspension of certain futures or options businesses, cancellation of qualifications, or declaration as a "market banned entrant." Fines may also be imposed concurrently.

Regarding penalty amounts, SHFE, ZCE, and DCE propose that relevant violations "may be subject to a fine of no more than 500,000 yuan," while GFEX phrases it as "punitive liquidated damages of no more than 500,000 yuan may be collected." The deadline for submitting public comments for all four exchanges is October 19, 2026.