Notice on Accepting Applications for the First Group of SGE Price Matching Market Makers

Date: 2019-07-12

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All relevant entities,

To promote price matching trades on the Shanghai Gold Exchange (SGE or the “Exchange”), enhance market quality, and better support the real economy, and in accordance with the Measures for the Administration of Market Makers of the Shanghai Gold Exchange, SGE now accepts applications for the first group of market makers for the price matching market. By the product in question, SGE price matching market makers are classified into gold market makers, silver market makers, and Panda Gold Coin market makers. Interested parties are welcome to apply for any one or all three of these categories. The details are as follows:

I. Application Requirements
To apply for the status of a price matching market maker, an applicant should:
(1)have no less than RMB 50 million or foreign currency equivalent in net assets;
(2)be ranked among the top ones in the Exchange or other similar open markets in terms of trading capability;
(3)have any specialized agency and personnel responsible for market making, and market making personnel familiar with applicable laws and regulations as well as the market rules of the Exchange;
(4)submit the implementation plan for market making, description of the internal control and risk management framework, and related contingency plan;
(5)have a trading system and other infrastructure with market making function; and ensure that it is sufficiently able to continuously make a market and tolerate risks;
(6)have a strong capability to research and analyze the precious metal market; and
(7)have a record of no material violation of laws and regulations within the most recent three years.

II. Application Materials
(1)Application Form for Market Maker Status bearing its common seal and the signature/seal of its legal representative (Appendix 1);
(2)a photocopy of its business license bearing its common seal;
(3)the original audited financial report for the most recent period or a copy thereof bearing the common seal of the accounting firm;
(4)descriptive materials including the implementation plan for market making and description of the internal control and risk management framework (refer to Appendix 2 for key information needed);
(5)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);
(6)a description of the technical systems for market making; and
(7)other materials required by the Exchange.
All application materials should bear an applicant’s common seal.

III. Application Procedures
(1)Application submission. Please submit one copy of each of the aforementioned application materials by July 31, 2019. The application materials should be bound in the order given and prefixed by a cover page titled “Application Materials for SGE Price Matching Market Maker Status – [entity name].” Please mail them to the SGE Trading Department, with a scanned copy being simultaneously sent to suyz@sge.com.cn. Incomplete applications will not be considered.
(2)Application review and evaluation.
SGE will first review the application materials. Applicants that do not meet the application requirements or have submitted incomplete applications will not enter the evaluation phase.
SGE will then evaluate applicants based on their profiles, ranking at the Exchange or other similar markets in trading volume, staffing, internal management framework, market making plan, technical preparedness, and market making experience, among others, to make the final determination.
(3)Agreement signing. SGE will enter into a price matching market making agreement with each applicant passing the review and evaluation. If the parties cannot agree on the terms of this agreement, the process will terminate with no market making status conferred.
(4)Status recognition. SGE will draw up a list of price matching market makers for each product according to the above procedures. The list will be submitted to market regulators and publicly released.

Shanghai Gold Exchange
July 12th, 2019

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