SHFE swears by rules, but says futures 'is not amass market'

The Shanghai Futures Exchange has vowed it won't tolerate any abuse of trading rules after the unprecedented boom-bust episode in Chinese commodities markets earlier this year, adding that its products aren't for mom and pop investors.

"Futures isn't a mass market but a professional one," the nation's biggest raw materials exchange said in comments to Bloomberg News. There'll be "zero tolerance" of any activity that violates regulations, according to the statement, which said more than 900 cases of what it called abnormal activity were settled in the first five months.

Raw-material futures in China in everything from steel to feed surged then swooned in the period from March through to May as retail investors were caught up in a frenzy that drew parallels with the nation's $5 trillion stock-market rout last year. The exchange said that well-functioning markets are a key support for policy makers' drive to achieve supply-side reforms that aid price-discovery and hedging, and that it also plans to press on with opening up to overseas investors.