In recent years, illegal futures activities have been in a state of frequent occurrence, especially in places where illegal futures trading activities are carried out under the name of commodity spot. This has seriously infringed on the legitimate rights and interests of investors, damaged the reputation of the futures market, and caused adverse effects in society. In the first half of 2017, the inter-ministerial joint meeting on cleaning and rectifying various trading venues held the third meeting and the "Looking Back" work exchange meeting, and deployed relevant policy measures to regulate local trading venues. At the same time, some regional courts have also successively made judgments on illegal futures trading activities in accordance with the law, providing practical reference for investors to identify illegal futures trading activities and having a strong warning effect.
Take a Electronic trading platform as an example. As a trading place reserved after the rectification, the platform is based on the spot, adopts standardized contract bidding electronic matchmaking, T+0, daily debt free settlement, leverage, margin, compulsory position closing and other trading methods, and takes charging fees as the profit model. However, Mr. Xie, General Manager of the platform, Mr. Zheng, Deputy General Manager of the platform, Mr. Chen and other relevant personnel involved in the case developed the so-called "Market maker" without authorization, outsourcing some trading varieties and businesses of the platform, such as Xylitol, liquid alkali, glycerin, hydrogen peroxide, formaldehyde, oxalic acid, etc. These Market maker continue to develop agents downward. They jointly conduct public marketing through the Internet, WeChat, telephone and other means. Using the backstage data provided by the platform, they first provide "correct information", induce customers to increase investment with small profits, then provide false market information, reverse manipulation of prices, resulting in huge losses for investors. The Market maker and the platform share the investors' loss capital at the ratio of 85% to 15%, and the Market maker will share 85% of the customers' losses with the agents. According to statistics, Xie, Zheng, Chen and others jointly obtained illegal benefits totaling RMB 79.7232 million. In November 2015, the three individuals were sentenced to life imprisonment, thirteen years in prison, and seven years in prison by the People's Court for fraud, and were also fined accordingly.
In cases that have occurred or have been adjudicated, illegal individuals often use spot trading of commodities as a pretext to induce investors to participate in illegal futures trading activities, causing property losses to investors. Investors should be highly alert to this, and pay special attention to the following two points: First, spot commodity trading usually adopts the "one-on-one" approach between the buyer and the seller to determine the contract terms such as variety, price, quantity, delivery date, instead of collective bidding, continuous bidding, electronic matchmaking, anonymous trading, Market maker and other centralized trading methods prohibited in GF [2011] No. 38 and GF [2012] No. 37 documents; The second is that spot trading of commodities usually involves physical delivery, rather than settling the transaction through the settlement of the bid-ask price difference. If someone persuades you to participate in "commodity spot trading" that does not match the above characteristics, please be careful to be involved in illegal futures trading activities and report to the local public security organs.
Article 6 of the Regulations on the Administration of Futures Trading clearly stipulates that without the approval of the State Council or the futures regulatory agency of the State Council, no unit or individual shall establish futures trading venues or organize futures trading and related activities in any form. However, in reality, futures trading, due to its special trading system, is often used by criminals to establish various spot trading platforms or centers, which is suspected of illegal business operations. In fact, to identify illegal futures activities, only the following four perspectives need to be considered: first, to identify the qualifications of the subject. According to the aforementioned regulations, conducting futures business requires approval from the China Securities Regulatory Commission and obtaining corresponding business qualifications, otherwise it is considered an illegal institution. Investors can log in to the websites of the China Securities Regulatory Commission and the China Futures Association to search for information on legitimate futures trading institutions and their employees, or verify relevant institution and personnel information with the local securities regulatory bureau. The second is to identify marketing methods. Some unscrupulous individuals like to pretend to be "teachers" and "expectant gods", often making sharp statements that only emphasize profits without paying attention to risks as long as they follow him and make big money. Investors need to be aware that investing in any financial product, including futures, follows the basic principle of "high returns must be accompanied by high risks", and there are no good products that fall from the sky. Legitimate futures trading institutions, guided by the appropriateness system, emphasize the importance of "selling suitable products to suitable investors" and are not allowed to engage in such false advertising. Investors should be vigilant when encountering such exaggerated promotional tactics. The third is to identify internet addresses. The website of illegal futures websites often consists of meaningless letters and numbers, or uses phishing methods to alter or add letters and numbers to the website of legitimate futures trading institutions. Investors can identify illegal futures websites by searching for the website of legitimate futures operating institutions through the website of the China Securities Regulatory Commission or the website of the China Futures Association. Investors should not log in to illegal futures websites to avoid falling into traps and being deceived. The fourth is to identify the receiving account. Legal futures trading institutions can only conduct business externally in the name of the company, and can only open bank accounts in the name of the company, while illegal institutions often open collection accounts in the name of individuals. If someone requests an investor to deposit money into an account opened in their personal name, the investor can decisively refuse.
