(Adopted at the 14th meeting of the 14th Board of Governors on May 17, 2024; issued by Announcement [2024] No. 59 on May 31, 2024; effective as of June 5, 2024)

Chapter 1 General Provisions

Article 1 These Rules are made in accordance with the Futures and Derivatives Law of the People’s Republic of China, Bylaws of Zhengzhou Commodity Exchange, the Trading Rules of Zhengzhou Commodity Exchange, the Provisions on Classification-Based Supervision of Futures Brokers, and other rules for the purpose of regulating “Insurance + Futures” business of Zhengzhou Commodity Exchange (the “Exchange”) and facilitating the futures market to better serve the real economy.

Article 2 In these Rules, “‘Insurance + Futures’ business” refers to the business that futures brokers and their risk management companies in conjunction with insurance institutions, with the consent of the Exchange, provide agricultural risk management services to agricultural operating entities, by using futures prices as the basis for insurance underwriting and insurance claims.

Article 3 The Exchange supports market institutions in leveraging their professional advantages, adhering to the principle of sustainable development, to ensure the security of national grains and important agricultural products, assist in rural revitalization, and serve other strategic directions and focus areas for high-quality national agricultural development through “Insurance + Futures” business.

Article 4 These Rules apply to futures brokers and their risk management companies, insurance institutions, service recipients, and other relevant entities involved in the “Insurance + Futures” business supported by the Exchange.

Chapter 2 Qualification Requirements

Article 5 Futures brokers and their risk management companies engaging in the “Insurance + Futures” business shall:

(1) have made over-the-counter derivatives business filings with the China Futures Association and have not been suspended from developing new business;

(2) have dedicated personnel responsible for business operations;

(3) meet the requirements for opening dedicated business account(s); and

(4) meet other requirements specified by the Exchange.

Article 6 The insurance institutions participating in “Insurance + Futures” business shall have the qualification(s) to deal in agricultural insurance to ensure that the insurance, claims, and other processes involved in “Insurance + Futures” business comply with the Insurance Law of the People's Republic of China, the Agricultural Insurance Regulations, the Administrative Measures for Agricultural Insurance Underwriting and Claims Settlement, and other relevant rules.

Article 7 Service recipients participating in “Insurance + Futures” business shall directly engage in agricultural production and operations related to the business product(s).

Chapter 3 Business Process

Article 8 The Exchange’s “Insurance + Futures” business is generally running as separate and independent project(s), including but not limited to such business processes as plan formulation, notice issuance, project application, review of project application(s), notice of application results, agreement signing, project management and promotion, project closure review, fee payment, project reflection, etc.

Article 9 The Exchange formulates an annual work plan of “Insurance + Futures” business (the “Annual Work Plan”) in accordance with the national agricultural policies and gives public notice of the Annual Work Plan. The public notice includes but is not limited to such information as project products, business requirements, application requirements, support plans, management requirements, etc.

Article 10 Institution(s) meeting the qualification requirements shall submit application(s) for “Insurance + Futures” project(s) in accordance with the Exchange’s public notice of Annual Work Plan, and the Exchange will, after approving the application, notify the applicant of application results by formal letter or other proper means.

Article 11 Where the project application is approved, the Exchange and the party undertaking the project shall sign a written agreement to clarify each party’s basic information, service scope, rights and obligations, support methods and coverage, default liabilities, etc. The party undertaking the project shall organize and execute the “Insurance + Futures” business in an orderly manner in accordance with the applicable Rules of the Exchange, formal notices, the written agreement, etc.

Article 12 The Exchange shall manage the process of project execution and have the right to require the party undertaking the project to submit insurance policy, information of policyholders, over-the-counter option trading confirmation, documents evidencing hedging, claim checklist, and other materials, and will inquire into business operations or conduct on-site inspections from time to time.   

Article 13 Where the Exchange reviews the project deliverables in the project closing phase, the party undertaking the project shall submit the materials for project closure review on time.

Chapter 4 Support Plans

Article 14 The Exchange may support “Insurance + Futures” projects through fee payment or in other ways.

Article 15 The Exchange shall specify the specific support methods and payment rates for “Insurance + Futures” projects in the public notice. The fee payment rates shall be determined based on the costs borne by futures brokers and their risk management companies in principle, namely the insurance premium costs (specifically subject to the support ratios specified in the insurance policies or public notice or the actual amount). The above-mentioned costs shall not exceed the upper limits of the ratios or the amount specified in the public notice and shall be paid based on the lower of the two.

Article 16 The Exchange will implement relevant support plans for “Insurance + Futures” projects that meet the project closure criteria and are accepted for closeout.

Chapter 5 Supervision and Management

Article 17 Where violations, defaults or potential risks are found in a project, the Exchange may take such supervisory measures against the party undertaking the project as warning, mandatory rectification within a prescribed time limit, suspension of project application, cancellation of project qualification, reduction or cancellation of project support, etc.

Article 18 The party undertaking a project shall properly preserve the documents and materials related to “Insurance + Futures” business. An insurance institution shall preserve such documents as insurance policy, policyholder list, claim checklist, land ownership certificate, etc., and a futures broker and its risk management company shall preserve such documents as over-the-counter options trading confirmation, over-the-counter options trading settlement statements, hedging records, etc. The above documents shall be preserved for not less than twenty (20) years.

Chapter 6 Ancillary Provisions

Article 19 Any futures broker and its risk management company in violation of these Rules will be handled in accordance with the Rules of Zhengzhou Commodity Exchange on Violations.

Article 20 The Exchange reserves the right to interpret these Rules.

Article 21 These Rules take effect on the date of issuance.

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