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INTRODUCTION TO BEIJING COMMODITY EXCHANGE
Prepared by Beijing Commodity Exchange
Short History of Beijing Commodity Exchange:
Beijing Commodity Exchange (hereinafter called BCE ) is situated in the Asian-games Village which is a commercial and financial center in Beijing. BCE, one of the first pilot futures exchanges approved by the State Council, opened up on November 18, 1993 and started trading officially on Dec. 15 of the same year. At the end of 1996, BCE had 285 members in all, scattering throughout 26 provinces, municipalities and autonomous regions in China.
At present, BCE is one of the largest comprehensive futures exchanges over Asia. It has a trading hall of 2000 square meters with 400 trading terminals and 9 long-distance stations. The main trading commodities include green bean, corn, peanut kernel, plywood, imported rubber, soda, polypropylene and copper. The trading, settlement and information releasing in BCE are implemented through the computer networking system. Learning from the experience of exchanges both at home and abroad, BCE has created an effective set of regulations and a practicable system of risk management and control, which have been enjoying high reputation among professionals of this industry and the regulatory authorities. Also, BCE recruits highly qualified managers and staff.
Since the launch, BCE has been developing quickly. In the year 1994 and 1995, BCE ranked the first among all national exchanges. In 1996, affected by the macro-economic policy, the trading volume shrank. However, the standardized management and risk control have been reinforced, which provide positive conditions for future development.
Composition Of Members:
Since 1995, in order to achieve management standardization, BCE has been making continuous adjustment of the membership structure. And the principle guideline of the adjustment is to conform the transference of membership with the requirements of the membership structure of the Exchange. In the meantime, a group of companies with good credit ratings have been admitted as members, thus optimizing the composition of memberships. By the end of 1996, BCE had had 285 members, of which 41% are future brokerages, 25% are trade distribution enterprises, 32% are general trading companies and 2% are foreign trade companies. In terms of authorized trading activities, out of the 285 members, 41% are brokers, 38% are companies having futures trading as sideline business and 21% are dealers.
To ensure the standardized operation and stable development of the futures market and to urge member entities to strictly observe the stipulations of China Securities Regulatory Commission (CSRC) while exercising self-discipline, BCE carries out annual qualification examination and credit rating, thus further optimizing the scientific management over member firms and enterprises.
Major Previous Achievements:
Under the guidance of China Securities Regulatory Commission (CSRC) and with the concerted support of professionals in various industries and sectors, BCE has walked through the past several years with hardship and brilliance.
1. A number of measures designed for risk management and control have been recognized and popularized by CSRC. (to be elaborated)
2. At the request of CSRC, BCE completed the membership reform in May 1996. It's clearly defined that the organization structure of BCE shall be the legal person of a non-profitable membership system composed of self-regulatory member companies.
3. Through several rounds of technological renovations and upgrading, functions of the computer-telecommunication trading system have been gradually improved. The automatic matching speed has been accelerated from the 2 orders per second, counter to 200-plus orders per second, counter and the number of items traded concurrently has been increased from the previous 18 to 200. This system has won the National Award of the Top Ten Electronic Achievements in 1994.
4. In order to expand the coverage of BCE trading market, BCE has completed the construction of 9 satellite remote trading stations and has carried out technical renovations on each remote trading station in light of market conditions. This enabled the remote trading system to be more accurate and efficient.
5. BCE has been keeping international cooperation and info-exchange with futures exchanges around the world. In the past years, BCE has received delegations from futures exchanges and futures regulatory organizations in America and Europe. In the mean time, BCE has been admitted by Futures Industry Association (FIA) of the United States to be a formal member of this global organization which has enhanced BCE's prestige internationally
Prospective Development
Despite of the satisfying achievements mentioned above, we shall also take note of the fact that BCE, same as other exchanges, is now faced with a critical situation. Futures, a newly emerged industry in China, is yet to become mature and standardized in terms of the management of the market and its participants.
I.Further the risk control and management standardization.
1) It has frequently occurred that some participants attempted to manipulate the futures market by taking advantage of the imperfect development of the market. Efforts have been and will continue to be made to strengthen standardized management and to improve trading rules.
2) BCE began to actively explore in 1996 the market maker system along the line of international common practice. Following the principle of general benefit-sharing, open operation and effective supervision, we are enforcing the Measures of BCE on the Administration of 3A Seats. Based on credit rating for its members, BCE is gradually adjusting the membership structure and improved the standard of market operators.
3) BCE has actively participated in the construction of the self-regulatory organization of nationwide exchanges while strengthen the self -regulatory management of its own. On top of that, BCE has completed some initial work in organizing the national joint conference of futures exchanges, hence strengthening the communication, connection and cooperation among and between different exchanges.
II. Explore new trading items while trimming the cost at the same time
1)We will be making unswerving effort to explore new and marketable trading items. At the present stage we have two major focuses: one is that we are trying to develop agricultural trading items with bigger demand and supply, such as corn; the other is that we are still working on the feasibility study of financial futures with th expectation that one day we can market the financial items.
2)We are working on plans of formulated commission reduction or exemption policies with an aim to reducing the trading and transaction costs.
In the start-up period, our Exchange drew mainly on foreign experience in terms of trading rules and management, however, problems do occur in the process of application. This requires us to gradually improve and optimize these rules and methods through practice taking the consideration of our national conditions. With the past achievements to expect future, BCE will be expecting wider prospects of development.
Beijing Commodity Exchange
Beijing, China
http://bcewww.cnfm.co.cn:8080/
Added to the WWW 12-05-97
Last updated on 12-05-97
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