China’s NEW Futures and Derivatives Law Provides Much-Needed Legal Certainty†

中国新的期货和衍生品法提供了急需的法律确定性*

Digest | 文摘

The highly anticipated Futures and Derivatives Law of the People’s Republic of China (the “FDL”) took effect on August 1, 2022, bringing China’s financial market more in line with international practices. With 155 articles in total, the FDL covers various areas, including settlement and clearing, supervision and administration, as well as cross-border trading and regulatory collaboration.

Importantly, the FDL recognizes close-out netting, offering much-needed legal certainty to foreign parties who trade with counterparties in China. Close-out netting is a mechanism that allows two parties facing a termination event (e.g., default) to consolidate all transactions between them to determine a net amount for one party to pay the other. The FDL states clearly that close-out netting will not be “suspended, invalidated, or revoked” if either party to the transaction enters into bankruptcy proceedings in accordance with law. Prior to the enactment of the FDL, close-out netting could be at risk when a counterparty in China entered into bankruptcy proceedings because the bankruptcy administrator might, for the purpose of performing its legal duties, choose to suspend certain contracts binding the Chinese counterparty, including contracts with close-out netting provisions.

Given the current price volatility around the world, to what extent can the FDL provide foreign investors with an effective tool to help them manage risks? What additional changes, if any, should be considered to strengthen the regulation of futures and derivatives in China so as to further promote investors’ confidence?

备受期待的《中华人民共和国期货和衍生品法》（“《期货和衍生品法》”）于2022年8月1日生效，使中国金融市场更符合国际做法。《期货和衍生品法》共有155 条，涵盖结算、监督管理，以及跨境交易与监管协作等各个领域。

重要的是，《期货和衍生品法》承认终止净额结算，为与中国方进行交易的外方提供了急需的法律确定性。终止净额结算是一种机制，允许面临终止事件（例如，违约）的两方合并他们之间的所有交易，以确定一方需要支付另一方的净金额。《期货和衍生品法》明确指出，如果交易的任何一方依法进入破产程序，终止净额结算不会“中止、无效或者撤销”。在《期货和衍生品法》颁布之前，当中国交易方进入破产程序时，终止净额结算可能会面临风险，因为破产管理人可能出于履行其法律职责的目的，选择中止某些对中国交易方具有约束力的合同，包括带有终止净额结算条款的合同。

鉴于当前世界各地的价格波动，《期货和衍生品法》能在多大程度上为外国投资者提供有效的工具来帮助他们管理风险？此外，还应该考虑哪些改变来加强中国对期货和衍生品的监管，从而进一步提振投资者的信心？

^† This piece was contributed by Jennifer Baccanello and edited by SINOTALKS.COM.

^* 此文章由白溱提供，并由丝络谈™编辑。