SSE: Qualified Foreign Investors Allowed to Trade ETF Options Listed on the Exchange for Hedging Purposes Only

The Shanghai Stock Exchange (SSE) has issued a notice regarding matters related to qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) participating in stock options trading:

1. Qualified foreign investors may participate in trading exchange-traded fund (ETF) options listed on the SSE, with transactions limited to hedging purposes only.

2. Qualified foreign investors may apply for hedging position limits for both long and short spot hedging.

3. Qualified foreign investors must report the planned use of Shanghai A-share securities accounts to the SSE through their appointed options trading institutions. After the report is approved, corresponding derivatives contract accounts shall be opened as dedicated hedging accounts.

4. Qualified foreign investors must submit applications for hedging quotas for relevant options varieties to the SSE through their appointed options trading institutions. Only after the SSE approves the quotas may they participate in hedging transactions, and they must continuously comply with the SSE’s requirements for stock options hedging trading.

5. Options trading institutions entrusted by qualified foreign investors shall diligently fulfill their responsibilities and strengthen the compliance management of the business applications and trading activities of qualified foreign investors.

6. If qualified foreign investors or options trading institutions violate the requirements of this notice or engage in other non-compliant behaviors, the SSE may, in accordance with relevant business rules, take measures such as verbal warnings, written warnings, adjustments to position limits, trading restrictions, or discussions as reminders.

7. Starting from the date of this notice’s issuance, the SSE will begin accepting applications from qualified foreign investors to participate in stock options trading.