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Homepage > Services > Knowledge Center > ZCE Detailed Rules 
Measures for the Administration of Designated Delivery Warehouses of Zhengzhou Commodity Exchange
 

(Revised at the 7th meeting of the 7th Board of Governors on October21, 2020, and the revised parts shall come into force since December 30, 2020)

Chapter 1 General Provisions

Article 1 These Measures are formulated in accordance with the Trading Rules of Zhengzhou Commodity Exchange and other relevant rules for the purposes of strengthening the management of delivery warehouses of Zhengzhou Commodity Exchange (hereinafter “the Exchange”), regulating physical delivery activities and ensuring normal operations of futures delivery.

Article 2 A delivery warehouseshall refer to an operating organization appointed by the Exchange to provide storage services for physical commodities used for futures contracts delivery.

The term “delivery warehouse” as mentioned in these Measures shall not include delivery factory designated by the Exchange. The Exchange shall manage the delivery factories in accordance with the Measures for the Administration of Designated Delivery Factories of Zhengzhou Commodity Exchange.

Article 3 The Exchange shall, in accordance with these Measures,sign theDelivery Warehouse Agreement with a warehouse which shall state that the Exchange shall manage the delivery business of the warehouse. The warehouse and its staff shall comply with these Measures.

Chapter 2 Application and Approval

Article 4 A warehouse applying for being a delivery warehouse of the Exchange shall satisfy the following requirements:

Ⅰ. it shall,in accordance with laws, hold business license for enterprise legal person or registration certificate for public institution as a legal personwhich shallclearly state the business of storage or storage and logistics;

Ⅱ. the amount of its net assets, registered capital and the paid-in amount ofregistered capital shall satisfy the requirements of the Exchange;

Ⅲ. it shall have sound financial condition and comparatively strong risk resistance capacity;

Ⅳ. it shall have good commercial reputation, sound rules and regulations on warehousing management and have no recent records of major violations of laws, severedishonest acts, serious safety accidents, or any expulsion by the Exchange from being a delivery warehouse;

Ⅴ. it shall accept and abide bythe Trading Rules of Zhengzhou Commodity Exchange, Detailed Rules for Futures Delivery of Zhengzhou Commodity Exchange, and Measures for the Administration of Registered Receipts of Zhengzhou Commodity Exchange, etc.;

Ⅵ. its senior managers shall have corresponding experiences in warehousing management of commodities for delivery;

Ⅶ. its storage conditions shall be suitable for safekeeping the commodities for delivery; its storage capacity shall be of a certain scale, and it shall be well-equipped for storage and measurement and its storage equipment and measurement apparatus shall be in sound conditions and be able to satisfy prescribed requirements;

Ⅷ. it shall establish corresponding systems for load in, load out, storage, management and inspection of the commodities for delivery;

Ⅸ. it shall have convenient transportation conditions and strong abilities for commodity transfer, loading and unloading;

Ⅹ. for the delivery warehouse applying for operating bonded delivery business, it shall get the Customs’ approval before they use the Customs’ special supervision area or bonded supervision placesfor theirbonded delivery business;

XI. it shall be equipped with video monitoring and storage management systems, equipment and facilities as per the requirement of the Exchange

XII. it shall have firefighting equipment, facilities and personnel to meet the storage requirements of delivery commodities;

XIII. other conditions required by the Exchange.

Article 5 A warehouse applying for being a delivery warehouse of the Exchange shall submit the following documents:

Ⅰ. the application form;

Ⅱ. business license for enterprise legal person or registration certificate for public institution as a legal person;

Ⅲ. relevant supporting materials such asaudit reports in the past two years issued by an accounting firm or annual financial statements audited by relevant organizations recognized by the Exchange; if having operated for less than two years, it shall submit the audit reports or financial statementsissued by an accounting firms or relevant organizations recognized by the Exchange since the date of its establishment;

Ⅳ. approval documents of the application for being a delivery warehouse issued by the warehouse’s superior departments or the institutions prescribed inits Bylaws;

Ⅴ. documents of guarantee required by the Exchange;

Ⅵ. real estate ownership documents such as land-use certificate for warehouse and house ownership certificate; in case that the warehouse is operated at leased premises, it shall provide the lease contracts (agreements) signed with the owners of the premises;

Ⅶ. documents and brief introduction of the management system of the warehouse;

Ⅷ. documents issued by local fire department and other national institutions which can certify that the warehouse reaches fire safety standards;

Ⅸ.information on the construction of information systems such as video monitoring system and warehouse management system;

Ⅹ.other documents required by the Exchange.

Article 6 The Exchange shall review and approve the applications for being delivery warehouses according to the following procedures:

Ⅰ. preliminarily examine the application documents listed in the preceding Article;

Ⅱ. conduct inspections over or assessments of the warehouses applying for being delivery warehouses based on the results of the preliminary examination;

Ⅲ. select the qualified warehouses and sign the Delivery Warehouse Agreement with them based on the results of the inspections and assessments.

Article 7 A qualified warehouse shall complete the following procedures upon the receipt of the Exchange’s approval:

Ⅰ. file the seals used for registering warehouse receipts with the Exchange;

Ⅱ. appoint one person to take charge of the futures delivery business, set up a futures delivery department, appoint employees to manage the delivery of commodities and to handle the registered receipts business and file the letter of authorization and the signature of the authorizer with the Exchange;

Ⅲ. pay delivery guaranty fund;

Ⅳ. formulate operating procedures or detailed rules in line with the Exchange’s requirements according to these Measures, and file the operating procedures or detailed rules with the Exchange;

Ⅴ. the administrative staff in charge of the futures delivery business shall attend the training courses on delivery business held by the Exchange;

Ⅵ. other matters prescribed by the Exchange.

Article 8 A delivery warehouse applying for withdrawing from the delivery business shall submit the Application Letter for Withdrawal from Delivery Business to the Exchange for approval.

The Exchange may have the right to suspend the warehouse from conducting all or part of delivery business or deprive of its delivery warehouse qualification for the purpose of market development or risk management,

Article 9 A delivery warehouse shall complete the following procedures if it is disqualified:

Ⅰ. load out all commodities rendered for delivery or convert warehouses receipts into physicals, or close the delivery business in such other manners as approved by the Exchange;

Ⅱ. settle all claims and debts with the Exchange;

Ⅲ. apply for refunding the delivery guaranty fund according to the Exchange’s regulations.

Article 10 With respect to the confirmation and cancellation of warehouses’ delivery warehouse qualifications and the warehouses’ withdrawal from delivery business, the Exchange shall timely notify the members and delivery warehouses.

Chapter 3 Rights and Obligations

Article 11 The rights of a delivery warehouse shall include:

Ⅰ. apply to the Exchange for registering receipts according to the Exchange’s regulations;

Ⅱ. charge relevant fees according to the service items, rates and methods approved by the Exchange;

Ⅲ. propose suggestions to the Exchange with regard to the provisions on the physical delivery;

Ⅳ. lease storehouses or warehousing premises to store commodities for delivery with the approval of the Exchange;

Ⅴ. other rights prescribed in the Detailed Rules for Futures Delivery of Zhengzhou Commodity Exchange, Measures for the Administration of Registered Receipts of Zhengzhou Commodity Exchange and Delivery Warehouse Agreement.

Article 12 The obligations of a delivery warehouse shall include:

Ⅰ. comply with the Detailed Rules for Futures Delivery of Zhengzhou Commodity Exchange and other relevant regulations formulated by the Exchange, accept the Exchange’s supervision and management and timely provide relevant information to the Exchange;

Ⅱ. store the commodities used for delivery according to relevant regulations and ensure the safety of these commodities;

Ⅲ. take outproperty all-risk insuranceforall stored delivery commodities or insure the commodities as required by the Exchange;

Ⅳ. renovate and upgrade facilities and equipment of video monitoring system, fire safety, etc. at the request of the Exchange

Ⅴ.arrange the inspection and load in of commodities rendered for delivery in accordance with the business rules of the Exchange, and build electronic ledger and other relevant systems;

Ⅵ. provide the commodities used for delivery according to the requirements stated in the registered receipts and the business rules of the Exchange, and assist the owners of the commodities to arrange load out;

Ⅶ.keep any commercial information related to the delivery of commodities confidential;

VIII. participate in annual review organized by the Exchange;

IX. pay the guaranty fund for delivery;

X. cooperate with the designated quality inspection agencies onsampling andon-site inspection, etc.;

Ⅺ etimely report to the Exchange in case any situation that may endanger the safety of the commodities for delivery or that may incur legal proceedings, arbitration and disputes occurred when changing the entity name, legal representative or person in charge, registered capital, paid-in amount of registered capital, shareholder or equity structure and warehousing premises, business premises, or in case that the land or property of the warehouse is collateralized or used as loan guarantee;

Ⅻinother obligations prescribed in the Detailed Rules for Futures Delivery of Zhengzhou Commodity Exchange, Measures for the Administration of Registered Receipts and Transit Receipts of Zhengzhou Commodity Exchange and the Delivery Warehouse Agreement.

Chapter 4 Daily Operations

Article 13 Daily operations of a delivery warehouse shall be classified into three phases: load in of commodities, storage of commodities and load out of commodities.

Article 14 A delivery warehouse shall ensure that the commodities used for delivery have the priority to be loaded in or loaded out.

Article 15 Storage of the commodities used for delivery shall satisfy the technical specifications of the PRC, the industry and the Exchange.

Article 16 A delivery warehouse shall implements label managementfor commodities used for delivery and the labels shall be in line with the regulations of the Exchange.

Article 17 A delivery warehouse shall keep the load-in inspection results according to relevant regulations of the Exchange, and shall input relevant statistics via warehouse management system after commodities have been inspected, accepted and loaded in.

Article 18 A client without Pick-up Notice shall not be allowed to enter into a warehouseto check the commodities used for delivery.

Article 19The ways of storing or stacking the commodities used for delivery in a delivery warehouse shall be conducted in accordance with relevant technical specifications.

Article 20 Facilities storing the commodities used for delivery shall meet the prescribed standards. The delivery warehouses shall keep the storage yards and the warehousing areas clean.

Article 21 A delivery warehouse shall manage the commodities used for delivery according to the storage and maintenance requirements of the commodities used for delivery and the Delivery Warehouse Agreement, ensure the quality and safety of the commodities and keep records on inventory.

Article 22 A delivery warehouse shall not move the stacks of the commodities used for delivery without the permission of the Exchange, otherwise the Exchange shall have the right to hold the delivery warehouse accountable for its noncompliance; any loss arising from such unauthorized move shall be borne by the delivery warehouse.

Article 23 A delivery warehouse shall process the load out of commodities timely and carefully, and shall conduct review work according to the following procedures:

Ⅰ. review the accuracy and validity of the password for the Pick-up Notice, the ID card of the pick-up person and the appointment letter.

Ⅱ. review whether the content stated in the Pick-up Notice is completely consistent with the corresponding commodities.

A delivery warehouse shall actively cooperate with the owner on the consignment of commodities and shall not delay the consignment of commodities without any justified reason.

A delivery warehouse shall timely report the consignment progress, changes in the stash numbers and stack locations and the destination of the consignment through the system or channel as requested by the Exchange.

Chapter 5 Supervision and Administration

Article 24 The Exchange shall conduct inspection on a delivery warehouse and require it to conduct self-inspection as well as inspection on other delivery warehouses, and the Exchange may appoint a member or designate a third-party institution to conduct inspection on the delivery warehouse. The Exchange shall also conduct annual review on the delivery warehouse:

Ⅰ. inspection conducted by the Exchange: the Exchange may conduct special or comprehensive inspection on a delivery warehouse at any time, check and copy the documents, materials, systems, information and data related to the matters being inspected, and inquire the staff involved in the matters being inspected, in order to check the implementation of the Exchange’s rules by the delivery warehouse in daily operation.

Ⅱ. self-inspection conducted by delivery warehouse: a delivery warehouse shall conduct self-inspection as per the request of the Exchange and shall report the inspection results to the Exchange.

Ⅲ.inspection conducted by a delivery warehouse on other delivery warehouses: a delivery warehouses shall conduct special inspection on other delivery warehouses as per the request of the Exchange and report the inspection results to the Exchange.

Ⅳ. inspection conducted by a member or third-party institution: a member or third-party institution designated by the Exchange shall conduct special inspection on a delivery warehouse as per the request of the Exchange and shall report the inspection results to the Exchange.

Ⅴ. annual review conducted by the Exchange: the Exchange shall, as per relevant provisions, designate an accounting firm or other institutions to conduct review on a delivery warehouse.

In case that during any of the above inspections, a delivery warehouse is found to violate regulations or fail to fulfill relevant obligations, or that the result of an annual review shows that the delivery warehouse fails to meet relevant requirements, the Exchange shall take such actions as requiring the warehouse to rectify within a prescribed period, reducing delivery capacity, suspending all or part of its futures delivery business or depriving of its delivery warehouse qualification. Any loss incurred shall be borne by the delivery warehouse.

For the unreleased documents, materials, systems, information and data that are known to the foregoing delivery warehouse, member and third-party institution during the above inspections, the delivery warehouse, member and third-party institution shall fulfill confidentiality obligation and bear any legal liability arising from failing to fulfill such obligation.

Article 25A delivery warehouse shall be prohibited from conducting the following behaviors:

Ⅰ. fail to manage the commodities used for delivery in accordance with the Exchange’s requirements;

Ⅱ. move or dispose of the commodities used for delivery without the Exchange’s permission;

Ⅲ. conspire with the members or clients to affect or intend to affect the price of the futures market by occupying the warehouse capacity without loading the commodities in;

Ⅳ. apply for the registration of warehouse receipts before the commodities are loaded in, the inspection results are issued or all inspection items are completed;

Ⅴ. overcharge in the delivery process;

Ⅵ. create difficulties for the clients deliberately; not be cooperative when commodities are loaded in or out;

Ⅶ. refuse or obstruct the Exchange’s legal and regulated supervision or inspection;

Ⅷ. practice fraud and affect the normal operation of futures delivery;

Ⅸ. other behaviors in violation of the Exchange’s regulations.

Article 26 A delivery warehouse shall pay to the Exchange the delivery guaranty fund to perform relevant obligations. The Exchange will return the interest of the delivery guaranty fundto the delivery warehouse after determining that the warehouse has fulfilled the obligations prescribed in these Measures. The interest shall be calculated once a year according to the demand deposit interest rate published by the PBOC for the same term.

In case that the holders of warehouse receipts cannot exercise or fully exercise their rights of the registered receipts due to delivery warehouses, the delivery warehouses shall assume the liabilities of compensation; in case that the warehouses fail to compensate the holders in full amount, the rest part shall be paid by the Exchange by the use of the delivery guaranty fund deposited by the warehouses in priority, and if the delivery guaranty fund could not cover the rest part, the Exchange shall pay the unpaid part in accordance with relevant regulations, after which the Exchange shall have the right to claim against the delivery warehouses.

The specific amount of the delivery guaranty fund shall be clearly specified in the Delivery Warehouse Agreement.

Chapter 6 Supplementary Provisions

Article 27 The Exchange shall handle any violation of these Measures in accordance with the Measures for Penalties for Violations of Zhengzhou Commodity Exchange.

Article 28 The Exchange shall reserve the right to interpret these Measures.

Article 29 These Measures shall enter into force from the day of promulgation..

(The English version is for reference ONLY. The Chinese version shall prevail if there is any inconsistency.)

 

 

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