(Adopted at the 6th meeting of the 8th Board of Governors on September 17, 2023; issued by Announcement [2023] No. 111 on October 16, 2023; changes take effect as of March 1, 2024. Adopted at the 10th meeting of the 8th Board of Governors on January 4, 2024; issued by Announcement [2024] No.16 on February 6, 2024; changes take effect as of February 6, 2024.)

 

Chapter 1 General Provisions

Article 1 These Detailed Rules are made in accordance with the Trading Rules of Zhengzhou Commodity Exchange and the common wheat futures (“PM”) contract to regulate PM-related activities on the Zhengzhou Commodity Exchange (the “Exchange”).

Article 2 The Exchange, Members, clients, delivery warehouses, Board Delivery service providers, Designated Quality Inspection Agencies, and other participants of the futures market shall comply with these Detailed Rules.

Chapter 2 Trading

Article 3 PM contract has a contract size of 50 metric tons/lot.

Article 4 PM contract has a price quotation of Chinese Yuan (RMB)/metric ton.

Article 5 PM contract has a minimum price fluctuation of 1 yuan/metric ton.

Article 6 PM contract has the following delivery months: January, March, May, July, September, November.

Article 7 PM contract has a minimum order size of 1 lot, maximum order size of 1,000 lots for limit orders, and maximum order size of 200 lots for market orders.

The Exchange may adjust the minimum order size, maximum limit order size, and maximum market order size based on market conditions. The specific thresholds will be separately announced by the Exchange.

Article 8 PM contract has the following trading hours: 9:00 – 11:30 and 13:30 – 15:00, with a break at 10:15 – 10:30.

Where the Exchange announces the creation of a night session for the PM contract, the trading hours specified in that announcement shall prevail. The Exchange may suspend, cancel, or adjust the trading hours of the night session for PM contract based on market conditions, the specifics of which will be separately announced by the Exchange.

Article 9 PM contract has the following Last Trading Day: the 10th trading day of the delivery month.

Article 10 PM contract has the following product code: PM.

Chapter 3 Delivery

Section 1 General Rules

Article 11 PM may be delivered by exchange of futures for physical, delivery with standard delivery warehouse receipts, and Board Delivery.

Rolling Delivery for PM is conducted through Response Matching.

In any Centralized Delivery of PM contract, the seller shall disclose the number of standard warehouse receipts it intends to deliver or the information about the Board Delivery commodity before market close of the First Delivery Day; failing which, the Exchange will, after market close, publish information on all the negotiable standard warehouse receipts of the seller for the corresponding product or, if disclosure for the Board Delivery commodity has not been made, treat the delivery as a delivery with standard warehouse receipts.

The specific delivery procedures are governed by the applicable provisions of the Futures Delivery Rules of Zhengzhou Commodity Exchange and these Detailed Rules.

Article 12 PM contract has a delivery unit of 50 metric tons.

Article 13 PM contract has the following Last Delivery Day: the 13th trading day of the delivery month for delivery with standard warehouse receipts, and the 20th day of the month following the delivery month for Board Delivery.

Article 14 The standard warehouse receipts for PM are all standard delivery warehouse receipts.

The standard warehouse receipts for PM are all general standard warehouse receipts.

Article 15 Standard warehouse receipts for PM are valid until the last business day of September of each year.

Article 16 Delivery of PM shall be made against a special VAT invoice.

Article 17 The delivery warehouses and Board Delivery service providers for PM and the relevant premiums and discounts are determined and published by, and subject to the adjustment of, the Exchange.

Article 18 The premium or discount for the substitute deliverable under a standard warehouse receipt for PM and that for a delivery warehouse for PM is transferred when the corresponding standard warehouse receipts are registered or cancelled; the corresponding special VAT invoice shall be issued by the registrant to the cancelling party under the supervision of the delivery warehouse. The delivery warehouse will collect a deposit based on the applicable VAT rate, which deposit shall be returned following the issuance of the special VAT invoice.

Article 19 The benchmark delivery price of PM is the tax-included price (excluding packaging fees) at which the benchmark deliverable is delivered to the buyer’s truck or ship at a benchmark Delivery Pricing Point or benchmark delivery warehouse.

Article 20 The registrant of a standard warehouse receipt for PM shall bear all the expenses incurred before the commodity is transported to the designated storage location in the delivery warehouse as well as the expenses from loading the commodity onto the truck or ship at load-out; the pick-up person shall bear all the expenses incurred after the commodity is loaded onto the truck or ship.

In a Board Delivery of PM, the seller shall bear all the expenses (excluding packaging fees) incurred before the commodity is loaded onto the truck or ship at the Delivery Pricing Point or another delivery point agreed to by the parties; the buyer shall bear all the expenses incurred thereafter. Where the buyer agrees to pick up the commodity at the warehouse or the seller agrees to deliver the commodity to the buyer, the parties may agree on the freight expenses they each bear in accordance with their respective distance to the Delivery Pricing Point.

The rates of delivery fees, storage fees, load-in and load-out fees, inspection fees, and other delivery-related fees will be separately announced by the Exchange.

Article 21 Common wheat is received, stored, and shipped in bulk. Any buyer that needs packaging shall do so itself or through a third party and solely bear the cost of the packaging materials and services.

Article 22 Any matter in relation to the creation, negotiation, and cancellation of standard warehouse receipts for PM that is not covered by these Detailed Rules is governed by the Rules of Zhengzhou Commodity Exchange on Standard Warehouse Receipts.

Section 2 Delivery Standard

Article 23 The delivery of PM is governed by national standards, the relevant national regulations, and these Detailed Rules.

Article 24 The benchmark deliverable is wheat meeting the quality standard for “Grade III” wheat or above under National Standard of the People’s Republic of China “Wheat” (GB 1351-2008), with sprouted kernel ≤ 2.0% and moldy kernel ≤ 2.0%.

Article 25 The substitute deliverables and their premiums and discounts are as follows:

(1) At load-in: If moisture content (MC) ≤ 12.5%, load-in is at full weight without weight penalty. If 12.5% < MC ≤ 13.5%, load-in is at a 1.0% weight penalty for every 0.5% above 12.5%, with no discount for difference less than 0.5%. At load-out: If MC ≤ 12.5%, load-out is at full weight without weight penalty. If 12.5% < MC ≤ 13.5%, load-out requires a 1.0% weight compensation for every 0.5% above 12.5%, with no compensation needed for difference less than 0.5%. The load-out rules apply similarly to Board Delivery.

(2) If 1.0% < foreign materials ≤ 1.5%, load-in is at a 1.0% weight penalty for every 0.5% above 1.0% and load-out requires a weight compensation of 1.0% for every 0.5% above 1.0%. No weight penalty or compensation applies for difference less than 0.5%. The load-out rules apply similarly to Board Delivery.

(3) If 8.0% < unsound kernel ≤ 12.0%, load-in is at a 1.0% weight penalty for every 1.0% above 8.0% and load-out requires a weight compensation of 1.0% for every 1.0% above 8.0%. The load-out rules apply similarly to Board Delivery.

Section 3 Delivery with Standard Delivery Warehouse Receipts

Article 26 A load-in deposit of RMB 30 yuan/metric ton shall be paid to the delivery warehouse at the submission of a delivery intention for PM.

Article 27 The Load-in Notice issued by a PM delivery warehouse is valid for forty (40) calendar days.

Article 28 A delivery warehouse conducts weight inspection on common wheat at load-in. The weight inspection is conducted with the vehicle driving over a truck scale at the delivery warehouse.

Article 29 The load-in quality inspection of common wheat is organized by the delivery warehouse. Samples for the load-in inspection are taken by the delivery warehouse before unloading. No standard warehouse receipt shall be registered for any commodity found during the inspection to be incompliant with the standards for delivery. No standard warehouse receipt shall be registered for any portion of commodity that is found during load-in to be incompliant with the standards for delivery.

Any registrant that objects to the results of load-in quality inspection may request the Exchange for a re-inspection. The specific procedures are governed by the “Load-in Re-inspection of Delivery Warehouse Commodities” section under the Rules of Zhengzhou Commodity Exchange on Standard Warehouse Receipts.

Article 30 The registrant of standard warehouse receipts shall be present at the weight inspection and load-in sampling of common wheat to monitor the process. The delivery warehouse and the registrant shall confirm the inspection results with their signatures and seals and are jointly responsible for the quality of the commodity loaded in. Any commodity without the signatures and seals of the delivery warehouse and registrant shall not be delivered against futures products.

After the commodity is loaded in, the delivery warehouse shall record in a file such information as the name, contact person, and contact information of the registrant; load-in quantity; and the storehouse and stack location, which information shall be confirmed by the registrant with signature.

Article 31 Upon the cancellation of a standard delivery warehouse receipt for PM, the pick-up person shall, within ten (10) business days after the Exchange issues the Pick-up Notice, visit the delivery warehouse to complete the pick-up procedures with his ID card, certificate of identity and authority issued by his employer, and the verification code for the Pick-up Notice; verify the quality of the commodity and determine the means of transport; and pay the applicable fees in advance.

Where the pick-up person provides his own transport vehicles, the delivery warehouse shall, as of the date that it is visited by the pick-up person with the Pick-up Notice to arrange for the load-out and the transport vehicles arrive at the delivery warehouse, begin the shipping process and stop charging the storage fees for any commodity already loaded onto such transport vehicles.

Where the pick-up person requests the delivery warehouse to handle the transport of the commodity, the delivery warehouse shall ship the commodity within ten (10) calendar days by trucks or ships or twenty (20) calendar days by railcars from the day when the pick-up person contacts the delivery warehouse with the Pick-up Notice to arrange for the load-out, designates the destination, and pays the relevant fees (including but not limited to rail freight forwarding charges and terminal handling charges) in advance. Any delivery warehouse that is not able to ship the commodity within the prescribed time limit may not charge storage fees for the period after the time limit.

The shipping time limit in the preceding paragraph does not apply if shipment is delayed due to such reasons as a change of the means of transport or shipment date by the pick-up person, missing pick-up documentations, late payment of relevant fees, or special shipping instructions.

Article 32 The load-out weight inspection of common wheat shall be jointly conducted by the delivery warehouse and the pick-up person in reference to the rules on load-in weight inspection.

Any quantity shortage at load-out shall be made up by the delivery warehouse based on the specified load-out quantity; failing which, the delivery warehouse shall compensate the pick-up person for the price of the missing commodity based on the highest final settlement price of the PM contract in the nearby month up to and including the date the Pick-up Notice is issued.

Article 33 Any pick-up person that objects to the quality of the common wheat at load-out may request the Exchange for a one-time re-inspection with the payment of the re-inspection fees in advance. Such objection shall be raised within ten (10) business days after the Pick-up Notice is issued. The specific procedures are governed by the “Load-out Re-inspection of Delivery Warehouse Commodities” section under the Rules of Zhengzhou Commodity Exchange on Standard Warehouse Receipts.

Section 4 Board Delivery

Article 34 A seller shall, at the time of submitting the delivery request for a Board Delivery, also provide information on the commodity it intends to deliver, including but not limited to type, grade, quantity, year of production, Delivery Pricing Point, and storage point.

Article 35 A buyer and a seller shall, within three (3) trading days from the Third Delivery Day (inclusive), discuss details about the Board Delivery to finalize the settlement method, delivery point, and the method and time of delivery, and enter into a Board Delivery Agreement.

The buyer shall submit the Board Delivery Confirmation Form to the member service system through its carrying Member before 1:30 p.m. on the third trading day from the Third Delivery Day (inclusive); the selling Member shall confirm it before 3:00 p.m. on the same day. Information in the Board Delivery Confirmation Form shall comply with the provisions of these Detailed Rules or be consistent with the agreement between the parties, or the Board Delivery Confirmation Form is deemed unsubmitted. Non-submission by the buyer or non-confirmation by the seller within the specified time limit constitutes a default, which will be handled in accordance with the “Handling of Delivery Defaults” section under the Futures Delivery Rules of Zhengzhou Commodity Exchange.

Article 36 The buyer of PM contract is entitled to pick up the commodity at either the seller’s storage location or a Delivery Pricing Point. If the buyer and the seller have agreed on a delivery location, such delivery location is in effect; otherwise, the buyer may specify a Delivery Pricing Point in the Board Delivery Confirmation Form and the seller shall make delivery in accordance with the buyer’s instructions.

Article 37 In a delivery at a Delivery Pricing Point, the buyer and the seller shall, within three (3) business days after both have confirmed the Board Delivery Confirmation Form, contact the Board Delivery service provider at the Delivery Pricing Point to sign the transit agreement and make arrangements for the delivery.

The buyer and the seller shall start making and taking delivery within three (3) calendar days from the execution date (inclusive) of the transit agreement. The seller shall deliver the commodity to the Board Delivery service provider in accordance with the schedule and shipment speed agreed upon. The buyer shall complete quality inspection within twenty-four (24) hours of the commodity’s arrival and load and ship the commodity out within twenty-four (24) hours after it passes the quality inspection. In a large delivery, the seller may make delivery in multiple shipments and the buyer may inspect and transship the commodity accordingly. Unless otherwise agreed between the parties, the seller’s daily shipment volume shall be no less than 300 metric tons/day. The seller is not liable for the quality of any shipment of commodity that, for reasons attributable to the buyer, cannot be loaded for shipment by the buyer within the prescribed time limit.

The seller is responsible for the transit fees incurred by the delivery activities at the Delivery Pricing Point and any temporary storage charges incurred during the delivery process.

Article 38 In a delivery at the seller’s storage location, the parties may seal the inspected commodity or the warehouse that stores it with lock, seal, or other method they have agreed upon. Where during the course of storage the seller needs to open the warehouse for ventilation or turning, the buyer shall arrive at the warehouse within twenty-four (24) hours of receiving the seller’s notice and cooperate. The seller is responsible for the safekeeping of any commodity awaiting shipment. If any commodity awaiting shipment becomes affected by moisture or mold due to mismanagement, the buyer is entitled to demand a re-sampling or re-inspection which the seller may not refuse.

Article 39 The storage facility at a seller’s storage location shall meet the following criteria:

(1) being conveniently located and accessible by trucks with a payload capacity of 30 metric tons;

(2) having well-functioning measuring facilities, and a scale that is certified by a nationally accredited technical supervision organization and within the validity period of the certification, and supports a maximum capacity of no lower than 60 metric tons;

(3) having a large fulfillment capacity and a daily shipment volume of no less than 300 metric tons/day, unless otherwise agreed by the parties; and

(4) having the quality inspection and testing equipment that is needed by futures deliverables, meets the testing provisions under national standards, and is in good working conditions.

The seller is liable for the consequences arising from the storage facility’s non-compliance with the above criteria.

Article 40 The buyer shall conduct an on-site inspection on the quality of the commodity before loading and shipment and the seller shall cooperate. The parties shall jointly take a sample in accordance with national standards, immediately divide the sample into two parts, and select one at random for joint testing either on-site or at another location they have agreed to. The remaining part shall be signed and sealed by both parties as the sample for re-inspection when a quality dispute arises.

Where multiple inspections have been conducted for a series of shipments, the final quality is based on the average result of inspections weighted by the quantity in each shipment.

Upon the acceptance of quality, the parties shall sign a Quality Acceptance Form as the basis for determining the quality and premiums/discounts of the commodity delivered.

Article 41 Any dispute between a buyer and a seller over quality shall be resolved through negotiation first; failing which, they shall notify the Exchange in a timely manner. The parties shall jointly mail the sample for re-inspection to a Designated Quality Inspection Agency or another quality inspection agency they choose. The quality of the commodity is determined by the results of re-inspection. The mailing cost and re-inspection fees are jointly borne by the parties.

Article 42 A seller shall promptly replace any commodity awaiting shipment that does not meet the standards of delivery. If replacement is infeasible, the parties may jointly determine a solution; failing which, the situation will be handled in accordance with the “Handling of Delivery Defaults” section under the Futures Delivery Rules of Zhengzhou Commodity Exchange.

Article 43 A buyer shall be present at the shipment of commodity to inspect the commodity and monitor the loading and transport process; the seller shall assign sufficient manpower and equipment to ensure a smooth shipping process. The weight inspection shall be conducted with a truck scale at the shipping location or by another measuring method acceptable to both parties.

Upon completion of the shipping stage, the weight of the commodity shipped is determined by the verified aggregate number on the weight note signed daily by the parties. The parties shall then sign the Weight Acceptance Form as the basis for determining the weight of the commodity delivered.

The buyer and the seller have the right to verify the accuracy of the scale. If there is any concern over accuracy, the parties shall stop the delivery process and notify the Exchange in writing. The Exchange will organize a national supervisor of measurement technologies to conduct on-site testing; relevant costs such as travel expenses, transport fare, and testing fees shall be borne by the party at fault.

Article 44 Where delivery is delayed because the buyer and seller fail to make and take delivery in accordance with the previously agreed shipment time and speed, they shall jointly determine a solution; failing which, the non-defaulting party may submit to the Exchange a request for compensation along with its supporting materials. Once verified, the Exchange will deduct a late fee from the party at fault and transfer it to the non-defaulting party as compensation. The amount of late fee = Σ[5 yuan/metric ton/day × days delayed × commodity quantity yet to be shipped or picked up].

If shipment or pick-up cannot be made as scheduled due to a force majeure event, the shipment or pick-up time may be postponed accordingly.

Chapter 4 Risk Management

Article 45 PM contract has a minimum Trading Margin rate of 5% of contract value.

The Trading Margin rate of PM contract varies as follows:

Trading period	Trading Margin rate
From listing to the 15th calendar day of the month preceding the delivery month	5% of contract value
From the 16th calendar day to the last calendar day of the month preceding the delivery month	10% of contract value
Delivery month	20% of contract value

Article 46 PM contract has a price limit of ±4% of the settlement price of the preceding trading day.

Article 47 The position limit of a particular PM contract varies as follows:

Trading period	Maximum long position or short position held by a non-futures brokerage Member or client (lot)
From listing to the 15th calendar day of the month preceding the delivery month	2,000
From the 16th calendar day to the last calendar day of the month preceding the delivery month	600
Delivery month	200 (0 for individuals)

“Position limit” as used in this Article refers to the maximum size of speculative positions (calculated on a single-counted basis) in a given futures contract that a Member or client is permitted to hold by the Exchange.

Article 48 Where the Exchange adjusts the Trading Margin rate or price limit of PM contract in accordance with the Risk Control Rules of Zhengzhou Commodity Exchange or other rules, such adjusted values shall prevail.

Chapter 5 Ancillary Provisions

Article 49 Any violation of these Detailed Rules will be handled in accordance with the Rules of Zhengzhou Commodity Exchange on Violations and other applicable Rules of the Exchange.

Article 50 Any matter not covered by these Detailed Rules is governed by the relevant Rules of the Exchange.

Article 51 The Exchange reserves the right to interpret these Detailed Rules.

Article 52 These Detailed Rules take effect on February 6, 2024.

(This English version is for reference ONLY. In case of any inconsistency between the different language versions, the Chinese version prevails.)