These Regulations are prescribed in accordance with paragraph 3 of Article 82 of the Futures Trading Act (hereinafter referred to as "the Act").

A securities firm that engages in futures introducing broker business ("futures introducing broker") is a futures service enterprise and shall obtain permission from the Financial Supervisory Commission (FSC).
Applicants to become futures introducing brokers shall be limited to those engaging in securities brokerage business.
A securities firm concurrently engaging in futures brokerage business shall not apply to conduct futures introducing broker business.

A futures introducing broker accepts the mandate of a futures commission merchant to:
1. solicit futures traders for futures trading;
2. accept account opening of futures traders on behalf of a futures commission merchant;
3. accept orders for futures trading from futures traders and deliver the same to a futures commission merchant for execution;
4. notify futures traders to meet margin calls and close out trades on their behalf; and
5. other related business items as approved by the FSC.
The businesses of the preceding paragraph that a securities firm applies to conduct shall be confined to futures business approved by the FSC.

A futures introducing broker shall engage in the solicitation of futures business in the name of its mandating futures commission merchant, and the provisions of Article 7 and Article 8 of the Regulations Governing Futures Commission Merchants shall apply mutatis mutandis.

When a futures introducing broker accepts the account opening of a futures trader on behalf of a futures commission merchant, the provisions of Article 25, Article 28, and paragraph 2 of Article 30 of the Regulations Governing Futures Commission Merchants shall apply mutatis mutandis. In addition, it shall -
1. conduct credit investigation on futures traders; and
2. prior to accepting account opening of a futures trader, provide the brokerage contract, risk disclosure statement, documents with explanations on the rights and obligations between the futures introducing broker and the futures trader, and other account-opening information etc., assign registered qualified associated person to explain in detail to the futures trader the relevant rights, obligations, and risks, and acquire a statement from the futures trader that he/she has been fully advised of, read, and understood the same before a brokerage contract can be entered; the relevant information shall be delivered to the futures trader to be signed or sealed and dated for custody and submitted to the mandating futures commission merchant for confirmation and for its signature or seal.
When a mandating futures commission merchant confirms and signs or seals the relevant information regarding account opening of a futures trader pursuant to subparagraph 2 of the preceding paragraph, it shall follow the relevant futures laws and regulations.

When a futures introducing broker accepts a futures trading order from a futures trader and delivers the same to the mandating futures commission merchant for execution, the provisions of Article 30, and Article 32 through Article 36 of the Regulations Governing Futures Commission Merchants shall apply mutatis mutandis.

The brokerage contract entered into by a futures introducing broker with a futures trader on behalf of a mandating futures commission merchant shall contain a provision expressly setting forth that the futures introducing broker shall be jointly and severally liable with the mandating futures commission merchant for the damages arising out of its execution of the businesses under paragraph 1 of Article 3 herein.
The futures introducing broker shall confirm the provision in the brokerage contract referred to in the preceding paragraph and affix its signature or seal thereon.

A futures introducing broker may accept a mandate from one futures commission merchant only; a futures commission merchant may concurrently mandate one or more futures introducing broker.
If a mandating futures commission merchant referred to in the preceding paragraph engages in domestic futures brokerage business, it shall be a clearing member of a domestic futures clearing house and shall make deposits to the clearing and settlement fund in accordance with the rules of the domestic futures clearing house upon mandating each futures introducing broker or branch office thereof.

A futures introducing broker shall adopt a system of internal controls in accordance with the FSC's Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets and the standards and regulations governing internal control systems at securities firms operating as futures introducing brokers as provided for by the futures exchange and other institutions related to futures trading.
A futures introducing broker shall operate in accordance with laws and regulations, its articles of incorporation, and the internal control systems referred to in the preceding paragraph.
The internal control system adopted in accordance with paragraph 1 and any amendments thereto shall be reported to the board of directors for their approval, and a copy retained for inspection; when the FSC or other futures-related institution issues notification for an amendment to the internal control system, the amendments shall be made within the prescribed time limit.

The site and equipment that make up the operating venue of a futures introducing broker shall conform to the standards for sites and equipment adopted by the Chinese National Futures Association ("the Futures Association").

In any of the following events, a futures introducing broker shall report to the FSC:
1. the futures introducing broker, or a responsible person, associated person, or other personnel thereof becomes involved in litigation or arbitration, or becomes subject to compulsory execution as an obligor, arising in connection with its business, or the futures introducing broker is a bankrupt or has a negotiable instrument dishonored or is refused service by a bank;
2. any of the conditions referred to in Article 28 of the Futures Trading Act applies to a responsible person or associated person of the futures introducing broker;
3. a responsible person, associated person, or other personnel of the futures introducing broker has violated the Futures Trading Act or any order issued by the FSC pursuant to that Act.
Any circumstance requiring reporting under the preceding paragraph shall be reported by the company within five business days from the date that the event occurred or that the company learned of it. The company shall submit the report to the Futures Exchange, which shall forward it to the FSC. The company also shall simultaneously notify the mandating futures commission merchant.
The term "business day" as used in these Regulations means a trading day on the domestic futures market.