On April 24, the Hong Kong Securities and Futures Commission issued a circular requesting commodity futures brokerage firms to take precautionary measures to manage the risks of trading crude oil futures contracts.
In the circular, the Hong Kong Securities Regulatory Commission reminds brokerage firms that clients should not be opened for them if they do not fully understand these contracts or do not have the financial capacity to bear potential losses New positions. In view of the approaching public holiday in Hong Kong, the SFC also urged brokerage firms to collect sufficient deposits from clients.
These specific measures include:
1, timely monitoring and handling of individual customers ’concentration risks.
2, carefully set the client ’s transaction limit and position limit to ensure that the limit is commensurate with the client ’s financial strength and settlement performance, as well as the financial resources of the firm .
3, prudently establish margin requirements for customers, and consider: raising the margin requirements above the level required by the clearing house or settlement agent to properly reflect Current market conditions, customers’ financial strength and settlement performance, and the firm’s ability to pay back the deposit (including the same-day recovery deposit) required by the customer’s position at the payment clearing house or settlement agent; And the risk of failing to charge customers extra margin during weekends (especially long weekends).
4. Only after a sufficient margin is charged, a new position is opened for the customer.
5. Quickly collect unpaid recovery deposits from customers.
The Chief Executive of the Hong Kong Securities Regulatory Commission, Ashley Alder, said: “The crude oil market has recently undergone unprecedented changes, and the risk of buying and selling crude oil-related financial products has risen substantially. Companies should carefully manage the risks to protect investors. “
The Hong Kong Securities Regulatory Commission also issued another circular today reminding the Hong Kong Securities Regulatory Commission to recognize futures trading The management company of the traded fund (Exchange Traded Fund, ETF for short) remains vigilant and seeks to manage the fund in a manner that is in the best interests of investors in extreme market conditions. In general, the Hong Kong Securities Regulatory Commission reminds companies to ensure compliance with ethical regulations when providing futures ETF trading services.
crude oil ETF andOther commodity futures ETFs have adopted derivatives that are targeted by investors who understand the risks. The commodity futures market is extremely volatile. Investors may suffer significant losses in a short period of time, or even lose all investment funds, so you should exercise caution when buying and selling these products.
The Hong Kong Securities Regulatory Commission also reminds investors to note that if they buy or sell financial products (such as crude oil futures and transactions) by leverage or margin, they may be short on their positions. Large deposits were recovered within the time. They may be forced to close their positions because the market trend is not conducive to their positions, and they may be responsible for any liquidation that exceeds their margin deposits.
Odali also pointed out: “Investors should only buy and sell financial products that they fully understand, not purely because the value of the underlying asset drops to a very low level. ”
The international crude oil futures market has recently experienced a huge shock.
In the early hours of April 21st, the history of crude oil futures trading prices was negative for the first time in history. In just two hours, the May contract of the New York Mercantile Exchange WTI crude oil futures successively fell through the psychological barrier of ten integers from $ 10 to $ 1, and finally closed at $ 37.63 per barrel, a drop of up to 305.97%. Over the next few days, oil prices repeatedly staged a huge shock.