Overall Process

The clients who need to conduct hedging activities shall apply to futures brokerage members (hereinafter “FB members”) where their accounts were opened. The FB members shall review the applications and submit to the Exchange. The Exchange will review the applicationsafter receiving the completematerials, and reply within the specified trading days.

Application and Approval for Hedging Quota for Regular Months

A Non-FB Member or client may apply for a hedging quota for regular months either by contract or by product. The quota approved under a contract-based application may only be used for the corresponding contracts; the quota approved under a product-based application may be used for all listed contracts of the corresponding product.

A contract-based application for hedging quota for regular months shall be submitted on any trading day between the listing day and the 5th calendar day of the month preceding the delivery month of the contract.

A product-based application for hedging quota for regular months may be submitted on any trading day of the year. The quota approved is valid from the date of approval to June 30 of the following year of the application day. For any Non-FB Member or client granted a product-based hedging quota for regular months, the same quota applies to all listed contracts of the product.

The Exchange will review the application and give a reply within five trading days of receiving the complete materials.

Application and Approval for Hedging Quota for Nearby Months

An application for hedging quota for near-delivery months shall be submitted on any trading day between the 15th calendar day of the second month preceding the delivery month and the 20th calendar day of the month preceding the delivery month of the relevant contract. Late applications will not be accepted.

The Exchange would review such applications and issues replies intensively in twice. The first time is the five trading days after the 5th calendar day of the month preceding the delivery month; the second time is the five trading days after the submission deadline.

The hedging quota for nearby months may be used from the 16th calendar day of the month preceding the delivery month to the last trading day of the relevant contract.

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