Detailed Rules for Implementation of Bonded Delivery of Dalian Commodity Exchange. Chapter I General Provisions

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1 Detailed Rules for Implementation of Bonded Delivery of Dalian Commodity Exchange Chapter I General Provisions Article 1 These Detailed Rules are formulated subject to the Trading Rules of Dalian Commodity Exchange and other relevant regulations for the purposes of guaranteeing the normal carrying-out of the futures bonded delivery business of Dalian Commodity Exchange (the Exchange ) and standardizing the delivery. Article 2 Bonded delivery means the process of futures delivery using the commodity set forth in futures contract and that is under bonded supervision in the customs special supervision area or bonded supervision place as the delivery subject matter. Article 3 Bonded delivery warehouse means the designated delivery place which is examined and approved by and registered at the Exchange and is provided with bonded function for the purpose of performing bonded delivery of futures contracts. Article 4 The bonded warehouse receipts on par shall refer to the physicals pickup vouchers which are uniformly formulated by the Exchange and registered at the Exchange upon application for warehouse receipts on par registration by designated bonded delivery warehouses after the bonded commodities loaded into the warehouses have been inspected, accepted and confirmed to be qualified. Article 5 The products to which the bonded delivery applies will be separately announced by the Exchange; and their physicals delivery may use the bonded warehouse receipts on par or the duty paid warehouse receipts on par, as the case may be. Article 6 The futures bonded delivery business of the Exchange shall be subject to these Detailed Rules. The Exchange, the members, the clients and the bonded delivery warehouses shall comply with these Detailed Rules. Chapter II Bonded Delivery of Linear Low Density Polyethylene Section 1 Generation of Bonded Warehouse Receipts on Par Article 7 The processes for the generation of a bonded warehouse receipt on par shall be subject to the provisions applicable to the warehouse receipts on par of the Exchange.

2 Article 8 A warehouse receipt on par applied by the bonded delivery warehouse for registration shall clearly note the bonded status or duty-paid status, as the case may be, of the corresponding commodities and respectively manage the commodities of the different status. Section 2 Circulation of Bonded Warehouse Receipts on Par Article 9 The bonded warehouse receipts on par may be used for one-off delivery or exchange of futures for physicals (EFPs) delivery. Article 10 The bonded warehouse receipts on par may be used as margins subject to the approval by the Exchange. With respect to using bonded warehouse receipts on par as margins, for the purpose of calculating the value, the Exchange shall take as the benchmark the settlement price without tax of the futures contracts of the latest delivery month of the products under such warehouse receipts on par of the trading day immediately proceeding the application day. Benchmark price of bonded warehouse receipts on par as margins = [(the settlement price of the futures contracts of the latest delivery month of the products of the trading day immediately preceding the application day the relevant costs) / (1 + the import VAT rate) the consumption tax] / (1 + the import duty rate) In addition to the provisions of the above three paragraphs in this Article, other specific processes of using bonded warehouse receipts on par as margins shall comply with the relevant regulations of the Detailed Settlement Rules of Dalian Commodity Exchange on warehouse receipts on par. The "relevant costs" in Paragraph 3 of this Article shall include the costs and expenses related to the customs clearance, quarantine inspection and agency services of the import of the commodities and shall be separately published by the Exchange; the formula shall be applicable to the futures products against which the consumption tax is collected on the basis of their quantity and the customs duty is collected on the basis of their prices, and the calculation formula of the benchmark price of bonded warehouse receipts on par as margins of the other products shall be separately determined by the Exchange. Section 3 Bonded EFPs Article 11 The bonded warehouse receipts on par exchange of futures for physicals (hereinafter, the "bonded EFPs") shall refer to that the trading parties which hold the contracts of the same delivery month file an application to the Exchange on the basis

3 of their negotiated consensus, and shall, after being approved by the Exchange, settle their respective futures positions at the price(s) prescribed by the Exchange and simultaneously carry out the exchange between the payments and the physicals of the equivalent quantity. Only bonded warehouse receipts on par are allowed for the bonded EFPs. Article 12 The member shall submit the application for bonded EFPs before 11:30 a.m. on the trading day, whereupon the Exchange shall examine and approve the application within the immediate day of the application. Before 11:30 a.m. of the approval day, the seller member shall submit the bonded warehouse receipts on par of corresponding quantity to the Exchange, while the buyer member shall transfer in full amount the payments to the delivered goods as calculated by the agreed price to the account of the Exchange. Article 13 The Exchange shall be responsible for handling delivery and goods payments of bonded warehouse receipts on par for bonded EFPs, with the handling fee charged according to the Detailed Settlement Rules of Dalian Commodity Exchange, the Detailed Delivery Rules of Dalian Commodity Exchange and other relevant regulations. Article 14 At settlement on the approval day of the bonded EFPs, the Exchange shall settle by the agreed price the corresponding open interests of the seller and the buyer, with the profit or loss incurred thereof calculated into the liquidation profit or loss of the then-current day. Article 15 After the closing of the market on the approval day of the bonded EFPs, the Exchange shall deliver the warehouse receipts on par submitted by the seller member to the buyer member, issue to the buyer the Bonded Delivery Settlement Statement as needed for customs declaration with such contents as warehouse name, actual quantity and bonded EFPs delivery settlement price, and pay 80% of the payments of the bonded EFPs delivery goods to the seller member, with the rest payments to be settled against the seller member s submission of the general VAT invoice. Bonded EFPs delivery settlement price = [(the settlement price of the contracts of the latest delivery month of the trading day immediately preceding the bonded EFPs day the relevant costs) / (1 + the import VAT rate) the consumption tax] / (1 + the import duty rate) The "relevant costs" in Paragraph 2 of this Article shall include the costs and expenses related to the customs clearance, quarantine inspection and agency services of the import of the commodities and shall be separately published by the Exchange; the

4 formula shall be applicable to the futures products against which the consumption tax is collected on the basis of their quantity and the customs duty is collected on the basis of their prices, and the calculation formula of the bonded EFPs delivery settlement price of the other products shall be separately determined by the Exchange. The bonded EFPs delivery settlement price will be used by the customs as the pricing benchmark for levying import duty and import VAT. Article 16 The seller member shall submit the general VAT invoice to the buyer member within 7 trading days after the approval day of the bonded EFPs application. Article 17 The positions of the bonded EFPs shall be deducted from the open interests on the then-current day, with the trading results not calculated into the settlement price and the trading volume of the then-current day. After the end of each trading day, the Exchange shall publish the relevant information of bonded EFPs effectuated on the then-current day. Section 4 Bonded Delivery Settlement Article 18 The bonded delivery settlement shall comply with the delivery process stipulated in Chapter V of the Detailed Delivery Rules of Dalian Commodity Exchange, and the delivery settlement price will be treated as the basis for calculating the payments of the delivery goods. Article 19 After confirmation of the matching results, the buyer member shall, within one trading day after the matching day, inform the seller member of the specific matters for issuing special VAT invoice including buyer s name, address, taxpayer s registration number and amount, according to the provisions of the taxation authority. The Exchange shall issue to the seller the Bonded Delivery Settlement Statement as needed for customs declaration, which shall include such information as warehouse name, actual quantity, bonded delivery settlement price, and etc. The seller shall declare to the customs using the bonded delivery settlement price stated in the Bonded Delivery Settlement Statement as the transaction price, timely go through the customs declaration procedures, and deliver the special VAT invoice to the buyer within seven (7) trading days after the last delivery day. Bonded delivery settlement price = [(the delivery settlement price the relevant costs) / (1 + the import VAT rate) the consumption tax] / (1 + the import duty rate) The "relevant costs" in Paragraph 4 of this Article shall include the costs and expenses related to the customs clearance, quarantine inspection and agency services of the import of the commodities and shall be separately published by the Exchange; the

5 formula shall be applicable to the futures products against which the consumption tax is collected on the basis of their quantity and the customs duty is collected on the basis of their prices, and the calculation formula of the bonded delivery settlement price of the other products shall be separately determined by the Exchange. Article 20 In case of any adjustment of the national taxation policy, the Exchange shall adjust and timely publish the calculation formula of the bonded delivery settlement price. Article 21 The Exchange shall publish the bonded delivery settlement price of the contract on the last trading day of such contract. Section 5 Deregistration of Bonded Warehouse Receipts on Par Article 22 Deregistration of bonded warehouse receipts on par means the process that a legitimate holder of bonded warehouse receipts on par applies to the Exchange for picking up goods (customs clearance and exit) or for exchange to general bill of lading, and goes through the procedures of withdrawal of bonded warehouse receipts on par from circulation. Article 23 Holders of bonded warehouse receipts on par shall handle deregistration of their bonded warehouse receipts on par via the members of the Exchange. Article 24 When picking up goods, the vendor shall produce to the bonded delivery warehouse the identity card of the consignee and the power of attorney of the vendor, and meanwhile settle with the bonded delivery warehouse any expense arising from the day after the deregistration day of the bonded warehouse receipts on par to the day of picking up the goods. The bonded delivery warehouse shall issue to the vendor the list of bonded warehouse receipts. Article 25 The holder of bonded warehouse receipts on par who needs to go through the customs declaration procedures for import of the bonded commodity shall comply with the relevant regulations of the customs. The name and quantity of the commodity to be declared by the holder shall be consistent with the Bonded Delivery Settlement Statement and the list of the bonded warehouse receipts held by the holder. Chapter III Bonded Delivery of Iron Ore Section 1 Generation of Bonded Warehouse Receipts on Par Article 26 The processes for the generation of a bonded warehouse receipt on par shall be subject to the provisions applicable to the warehouse receipts on par of the

6 Exchange. Article 27 A warehouse receipt on par applied by the bonded delivery warehouse for registration shall clearly note the bonded status or duty-paid status, as the case may be, of the corresponding commodities and respectively manage the commodities of the different status. Section 2 Circulation of Bonded Warehouse Receipts on Par Article 28 The bonded warehouse receipts on par of the iron ore may be used for EFPs delivery, one-off delivery, trading and transfer. Article 29 With respect to the EFPs delivery and one-off delivery of the bonded warehouse receipts on par of the iron ore, the specific processes shall be subject to the applicable provisions on warehouse receipts on par of the Detailed Delivery Rules of Dalian Commodity Exchange and the Detailed Settlement Rules of Dalian Commodity Exchange in addition to the applicable provisions of Sections 3 and 4 of this Chapter. The specific processes for the trading of the bonded warehouse receipts on par shall be separately prescribed by the Exchange. Article 30 The transfer of a bonded warehouse receipt on par shall be subject to the handling of the transfer formalities at the Exchange through a member and the full settlement of the applicable costs. The Exchange will issue, on the basis of the transaction price between the parties, a Bonded Delivery Settlement Statement (for taxation and accounting use only) to the seller and a Bonded Delivery Settlement Statement (for accounting only) to the buyer client as the fundamental basis for tax declaration and payment by the client. In addition to the price information, the Bonded Delivery Settlement Statement shall contain, among other things, the name of the warehouse, the actual quantity, the delivery time and the delivery method ( transfer shall be noted in the delivery method). If the deregistered bonded warehouse receipt on par is obtained by way of transfer, the Exchange will not issue a Bonded Delivery Settlement Statement (for customs clearance use only), and the formalities shall be handled subject to the current provisions of the customs. With respect to a transferred bonded warehouse receipt on par whose transfer formalities are not handled at the Exchange, the Exchange will not issue a Bonded Delivery Settlement Statement(s) (for taxation use only, for accounting use only, and/or for customs clearance use only) and other related documents and certificates. Section 3 Bonded EFPs

7 Article 31 The Exchange shall be responsible for handling delivery and goods payments of bonded warehouse receipts on par for bonded EFPs, with the handling fee charged according to the Detailed Settlement Rules of Dalian Commodity Exchange, the Detailed Delivery Rules of Dalian Commodity Exchange and other relevant regulations. Article 32 Upon settlement on the approval day of the bonded EFPs, the Exchange shall liquidate the corresponding positions of the buyer and the seller as per the settlement price of the contracts of the latest delivery month of the trading day immediately preceding the application day and have the profit and loss settled; and transfer the payments as per the settlement price without tax of the contracts of the latest delivery month of the trading day immediately preceding the application day, which shall also be the basis for the Exchange to issue a Bonded Delivery Settlement Statement for the bonded EFPs. After the ending of each trading day, the Exchange shall publish the information related to the bonded EFPs which is implemented on the then-current day. Article 33 After the closing of the market on the approval day of the bonded EFPs, the Exchange shall pay 80% of the payments of the bonded EFPs to the seller member, with the rest payments to be settled against the seller member s submission of invoices of other forms or other documents recognized by the Exchange. Payments of the bonded EFPs = the settlement price without tax of the contracts of the latest delivery month of the trading day immediately preceding the application day the quantity of the bonded warehouse receipts on par applying for EFPs Article 34 After the closing of the market on the approval day of the bonded EFPs, the Exchange shall deliver to the buyer member the warehouse receipts on par submitted by the seller member, and issue a Bonded Delivery Settlement Statement (for taxation and accounting use only) to the seller and a Bonded Delivery Settlement Statement (for accounting only) to the buyer. In addition to the price information, the Bonded Delivery Settlement Statement shall contain, among other things, the name of the warehouse, the actual quantity, the delivery time and the delivery method. The "EFPs" shall be noted in the delivery method of the Bonded Delivery Settlement Statement. Section 4 One-off Delivery of Bonded Warehouse Receipts on Par Article 35 Prior to the closing of the market of the first trading day following the last trading day, the seller member shall deliver to the Exchange all the warehouse receipts on par (inclusive of bonded warehouse receipts on par) corresponding to its positions of the contracts of the delivery month; and after the closing of the market of the first trading day following the last trading day, the Exchange shall publish information of

8 the quantity of the delivery products and warehouse receipts on par (inclusive of the bonded warehouse receipts on par) of any and all delivery warehouses. Prior to the closing of the market of the second trading day following the last trading day, the buyer may, on the basis of the information published by the Exchange, propose a submission of the delivery intention. After the closing of the market of the second trading day following the last trading day, the Exchange shall carry out the matching between the warehouse receipts on par (including bonded warehouse receipts on par) and the buyer clients pursuant to Article 48 of the Detailed Delivery Rules of Dalian Commodity Exchange. Prior to the closing of the market of the last delivery day, the buyer member shall additionally pay the balance of the payments corresponding to its positions of the contracts of the delivery month. Payments of the bonded warehouse receipts on par = the bonded delivery settlement price * the quantity of the bonded warehouse receipts on par The bonded delivery settlement price = [(The delivery settlement price - the relevant costs) / (1 + the import VAT rate) - the consumption tax] / (1 + the import duty rate); The bonded delivery settlement price shall be published by the Exchange on the last trading day of the contract. The "relevant costs" in Paragraph 5 of this Article shall include the costs and expenses related to the customs clearance, quarantine inspection and agency services of the import of the commodities and shall be separately published by the Exchange; the formula shall be applicable to the futures products against which the consumption tax is collected on the basis of their quantity and the customs duty is collected on the basis of their prices, and the calculation formula of the bonded delivery settlement price of the other products shall be separately determined by the Exchange. Article 36 After the closing of the market of the last delivery day, the Exchange shall pay 80% of the payments of the bonded warehouse receipts on par to the seller member, and shall issue a Bonded Delivery Settlement Statement (for taxation use only and for accounting use only) as per the bonded delivery settlement price to the seller member and a Bonded Warehouse Receipt on Par Holding Certificate and a Bonded Delivery Settlement Statement (for accounting use only) to the buyer member. In addition to the price information, the Bonded Delivery Settlement Statement shall contain, among other things, the name of the warehouse, the actual quantity, the delivery time and the delivery method ( one-off delivery shall be noted in the delivery method). The rest payments shall be settled against the seller member s submission of invoices of other forms or other documents recognized by the Exchange.

9 Article 37 In case of any adjustment of the national taxation policy, the Exchange shall adjust and timely publish the calculation formula of the bonded delivery settlement price. Section 5 Use as Margins and Off-Exchange Pledge of Bonded Warehouse Receipts on Par of Iron Ore Article 38 The bonded warehouse receipts on par may be used as margins subject to the approval by the Exchange. For the purpose of calculating the value, the Exchange shall take as the benchmark the settlement price without tax of the futures contracts of the latest delivery month of the products under the bonded warehouse receipts on par of the trading day immediately preceding the date when such warehouse receipts on par are used as margins. Benchmark price of bonded warehouse receipts on par as margins = [(the settlement price of the futures contracts of the latest delivery month of the products of the trading day immediately preceding the application day the relevant costs) / (1 + the import VAT rate) the consumption tax] / (1 + the import duty rate) In addition to Paragraphs 1, 2 and 3 of this Article, the other specific processes with respect to using the bonded warehouse receipts on par as margins shall be subject to the applicable provisions of the Detailed Settlement Rules of Dalian Commodity Exchange. The "relevant costs" in Paragraph 3 of this Article shall include the costs and expenses related to the customs clearance, quarantine inspection and agency services of the import of the commodities and shall be separately published by the Exchange; the formula shall be applicable to the futures products against which the consumption tax is collected on the basis of their quantity and the customs duty is collected on the basis of their prices, and the calculation formula of the benchmark price of bonded warehouse receipts on par as margins of the other products shall be separately determined by the Exchange. Article 39 The specific processes for the off-exchange pledge of bonded warehouse receipts on par shall be subject to the regulatory provisions of the local customs for the bonded delivery business of the iron ore and the applicable provisions of the Exchange. Section 6 Deregistration of Bonded Warehouse Receipts on Par Article 40 In addition to the provisions under this Section, the business processes and basic requirements for deregistration of bonded warehouse receipts on par shall be

10 subject to the Measures of Dalian Commodity Exchange. Article 41 A bonded warehouse receipt on par holder who needs to handle import customs clearance or transshipment exit shall, when handling the formalities for deregistration of a bonded warehouse receipt on par, make a statement to the Exchange and then handle the formalities for the import customs clearance or transshipment exit. After a vendor handles the pickup formalities, the bonded delivery warehouse shall issue a bonded warehouse receipt list to the vendor; and after receipt of such bonded warehouse receipt list, the Exchange shall issue a Bonded Delivery Settlement Statement (for customs clearance use only) to the vendor and simultaneously send the information related to such Bonded Delivery Settlement Statement to the corresponding customs through the electronic warehouse receipt system. The information is deemed to be served once it is sent. Within ten (10) working days (inclusive) following the date of issuance of the Bonded Delivery Settlement Statement (for customs clearance use only), the vendor shall hold the Bonded Delivery Settlement Statement (for customs clearance use only) to handle the formalities for import customs clearance or transshipment exit; and the name of the commodities to be cleared, the quantity, the price and other basic information shall be consistent with such Bonded Delivery Settlement Statement and the list of the bonded warehouse receipts on par. If the deregistered bonded warehouse receipt on par is obtained by way of trading, transfer and other non-futures delivery methods, the Exchange shall not issue a Bonded Delivery Settlement Statement (for customs clearance use only). Article 42 Upon handling the import customs clearance, the vendor shall make declaration to the customs in the following principle for the customs to determine the duty-paid price of the iron ore, and shall pay the duty as per the applicable provisions of the customs: In case of one-off delivery: The declaration price = the bonded delivery settlement price + the bonded premiums/discounts; In case of EFPs: The declaration price = the settlement price without tax of the contracts of the latest delivery month of the trading day immediately preceding the application day + the bonded premiums/discounts; In case of bill of lading delivery: The declaration price = bonded delivery settlement price + the bonded premiums/discounts; The bonded premiums/premiums = the premiums/discounts/(1+the import VAT rate)

11 /(1+the import duty rate) Please refer to the applicable provisions of the Exchange for the calculation of the premiums and discounts under Paragraph 5 of this Article. If the deregistered bonded warehouse receipt on par is obtained by way of trading, transfer and other non-futures delivery methods, at the vendor s going through customs declaration procedures for import, the customs shall examine and approve the dutiable price as per the currently existing regulations on domestic sale of tax bonded goods. Chapter IV Supplementary Provisions Article 43 These Detailed Rules shall be interpreted by the Exchange. Article 44 Any matters not expressly provided herein shall be subject to the other applicable provisions of the Exchange. Article 45 These Detailed Rules shall enter into force as of the date of promulgation. (Note: The iron ore bonded delivery rules will be effectuated starting from I1606 futures contract.)