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Shanghai International Energy Exchange confirms listing date of LSFO futures contracts

11 Jun 2020

The Shanghai International Energy Exchange (INE) has gained approval from the China Securities Regulatory Commission to list its Low Sulfur Fuel Oil futures contracts, it said on Wednesday (10 June).

The development allows trading of INE’s Low Sulfur Fuel Oil futures contracts to officially start on June 22, 2020; the market is scheduled to open at 0900hrs.

“The trading margin for each contract is set as 15% of the contract value. The price limit for each contract is set as ±13% from the settlement price of the previous trading day, and the price limit on the first trading day will be twice the price limit,” according to INE.

“An Overseas Special Non-Brokerage Participant or an overseas Client may use acceptable foreign exchange as margin. For foreign exchange to be used as margin, the current-day CNY Central Parity Rate published by China Foreign Exchange Trade System (hereinafter referred to as CFETS) shall be used as the benchmark prices for calculating the market value of the foreign exchange. Currently, INE accepts US Dollar as foreign currency collateral with a haircut of 5%.

“Prior to the market close of the day, the market value of foreign exchange shall be calculated based on CFETS CNY Central Parity Rate published on the previous trading day. During the daily clearing, INE shall update the benchmark prices of the day and adjust the discounted value of foreign exchange used as margin according to the aforementioned methodology.”

The transaction fee for the Low Sulfur Fuel Oil futures contracts is 2 RMB yuan per lot.

More details of the new futures contracts are available here.

Related: China Securities Regulatory Commission approves INE’s LSFO futures contracts
Related: Shanghai INE VLSFO futures project enters milestone, trading simulations to start in June

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Published: 11 June, 2020

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