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this looks like a game changer. when Shanghai sets up market makers, what happens to London?
Announcement on the First Recruitment of Market Makers for the International Board Contracts in Price Asking Market
Date: 2021-07-09
SMLTo promote price asking trades on the Shanghai Gold Exchange (SGE or the “Exchange”), enhance market quality, and better support the real economy, in accordance with the Measures for the Administration of Market Makers of the Shanghai Gold Exchange, SGE starts the first recruitment of market makers for the international board contracts in price asking market. Shanghai Gold Exchange International (“SGEI”) is authorized by SGE to manage the market makers of International Board contracts in price asking market.
The details are as follows:
I. Application RequirementsTo apply for the status of an International Board price asking market maker, an applicant should meet one of the qualifications as below:
(1)The market maker of Interbank Price Asking Market for gold products;
(2)The trial market maker of Interbank Price Asking Market for gold products;
(3)Any other qualified applicants recognized by SGEI.Other qualified applicants recognized by SGEI should
1)have net assets with no less than RMB 50 million or equivalent foreign currency ;
(2)be ranked among the top ones in the Exchange or other similar open markets in terms of trading capability;
(3)designate specialized entity/department and personnel for market making activities, who should be familiar with applicable laws and regulations as well as the market rules of SGEI;
(4)submit the implementation plan for market making, internal control policies and risk management framework, as well as related contingency plan;
(5)have a trading system and other infrastructure with market making functions; and ensure that it is sufficiently able to continuously market making and tolerate risks;
(6)have a strong research and analysis capability of precious metals market; and
(7)have a record of no material violation of laws and regulations in the latest three years. (my emphasis)
II. Application Materials Market makers and trial market makers of InterBank Gold Market applicants should submit SGE Application Form for Market Maker Status bearing its company seal and the signature/seal of its legal representative (Appendix 1) and the implementation plan for market making (refer to Appendix 2 for key information needed). Other qualified applicants recognized by SGEI should in addition to submit the following materials besides the above two documents:
(1)a photocopy of its business license;
(2)the original audited financial report for the most recent period or a copy thereof bearing the common seal of the accounting firm;
(3)an assurance that it has not committed any material violation of laws and regulations within the most recent three years (refer to Appendix 3 for the specific format);
(4)written documents including internal control policies, risk management framework, contingency plans, technical systems for market making (refer to Appendix 2 for key information needed) and;
(5)other materials required by SGEI.All application materials should bear the applicant’s company seal.III. Application Procedures(1)Application Documents Submission. Please submit one copy of each of the aforementioned application materials by August 9th, 2021. The application materials should be bound in the order given and prefixed by a cover page titled “Application Documents for SGE International Board Contracts in Price Asking Market– [entity name].” Please mail them to SGEI (42/F, Bank of China Tower, No.200 Central Yincheng Road, Pudong District, Shanghai 200120), with a scanned copy being simultaneously sent to [email protected]. Incomplete applications will not be considered.
(2)Application Documents Verification and AssessmentSGEI will first review the application documents.
Applicants that do not meet the application requirements or have submitted incomplete materials will not enter the assessment phase.SGEI will then verify and assess the applicants based on their profiles, ranking at the Exchange or other similar markets in trading volume, market making plan, etc. to make the final determination.
(3)Agreement Signing. SGEI will enter into a market making agreement on international board contracts in price asking market with each applicant who have passed the verification and assessment procedure. If the parties cannot agree on the terms of this agreement, the process will terminate with no market making qualification being granted.
(4)Qualification Recognition. SGEI will draw up a list of market makers of international board contracts in price asking market according to the above proceduresand will be publicly released.
