M E TA L S

Shanghai Gold Futures FAQ

1.	What are the Shanghai Gold (USD) Futures and Shanghai Gold (CNH) Futures contracts?	The Shanghai Gold (USD) Futures and Shanghai Gold (CNH) Futures are new products offered by CME Group. These financiallysettled contracts are based on the Shanghai Gold Exchange (SGE) Benchmark Gold PM price.
2. What is the reference price?	The reference price is the Shanghai Gold Exchange Benchmark Gold PM price. The SGE Benchmark Gold Price refers to an RMB
denominated price established in an auction process following the principle of ‘tendering volume based on price’ with all orders
executed on the SGE trading platform.
3. How is the Shanghai Gold Benchmark price determined?	The SGE Benchmark Gold Price is established in a standalone auction process with all orders executed on the SGE trading
platform. The main purpose for the SGE Benchmark Gold Price trading mechanism is to determine a reference price for gold inShanghai at which supply and demand reach a balance. There are 3 main steps in determining the price:•	The Shanghai Gold Benchmark trading system calculates and publishes an Initial Price based on reference prices provided
by the Fixing Members (12 banks currently) and Reference Price Members (6 firms currently, mainly physical players).
•	All SGE members and clients submit their buying and selling quantities based on the Initial Price. If the net volume in themarket is imbalanced, SGE will adjust the price following trading rules, and enable a new round of order submission against
the revised price. The market is considered to be imbalanced if buying and selling quantities differ by more than 400kg.
This price adjustment process is repeated until the market reaches equilibrium (i.e. has an imbalance at or within 400kg.).
•	Once the SGE Gold Benchmark Price is determined, all valid orders are executed at this price, and any imbalance isallocated among the Fixing Members.

NO
Fixing Members andReference Price Members offer
market reference quotation
to form the Initial Price

SGE published
Initial Price orprice adjusted

All participants
submit orders

Fixing Members submit
supplementary offering
against the imbalanced

Imbalance within 400 kg

YES
T+2 for clearing
and physicalsettlement

Publish AM, PMBenchmark PriceBenchmark
Price set

Allocate imbalanced among
fixing members

4. What is special about these contracts?	These contracts offer customers the opportunity to participate in the Chinese gold market and trade Shanghai gold in either
U.S. dollars or offshore Chinese Renminbi. Having Shanghai gold contracts available on COMEX makes the Chinese market
accessible to market participants.
5. Why is the underlying price relevant?	The SGE Benchmark Gold price has been developed to provide a transparent and tradeable Renminbi denominated gold priceto market participants. With China being one of the world’s largest gold producers and importers, gold priced in Renminbi has
become increasingly important in the global trade.
6.	Where are these futures contracts traded and cleared?	•	The contracts are listed for trading on COMEX on CME Globex, a global electronic trading platform and cleared by theCME Clearing House.
•The contracts can also be bilaterally agreed as a block trade and cleared via CME ClearPort

7. What are the specifications of the contracts?

Commodity CodeShanghai Gold (USD) Futures

Shanghai Gold (CNH) Futures

SGU

SGC

Reference Price

Shanghai Gold Exchange (SGE) Gold Benchmark PM price

Listing Schedule

Monthly contracts listed for three consecutive months and all February, April,June, August, October, and December contracts within a 12-month period

Contract Size

32.15 troy ounces

1,000 grams

Price Quotation

U.S. dollars and cents (USD) per troy ounce

Offshore Chinese Renminbi (CNH) per gram

$0.10 per troy ounce

0.05 CNH per gram

$3.21550 CNH

Minimum Daily Settlement Price Fluctuation$0.10 per troy ounce

0.05 CNH per gram

Minimum Final Settlement Price Fluctuation$0.05 per troy ounce

0.01 CNH per gram

Minimum Trading Price Fluctuation
Value per Tick

First Listed Contract Month

December 2019

CME Globex Match Algorithm

First-In, First-Out (FIFO)

Settlement Method

Financial

Block Trade Minimum Threshold

5 contracts

Termination of Trading

Rulebook Chapter

Trading terminates on the third last U.S. business day of the contract monthunless it is not a Chinese business day. If it is not a Chinese business day,trading terminates the previous U.S. and China business day.
1271288.	How is the SGE Gold price converted for the Shanghai Gold (USD) Futures contract?	For final settlement, the USD/CNH rate provided by EBS Service Company Limited will be used for the conversion of the SGE
gold price to USD price. The rate published will be used closest to the time the SGE Gold PM price is generated.
9.	What currency accounts are needed to access these products?	Two futures contracts are being listed by COMEX. One contract is denominated in U.S. Dollars, with a commodity code of SGU.
Prices for this contract will be quoted in U.S. Dollars per troy ounce. Variation margin payments will be made in U.S. Dollars,and participants wishing to use this contract will need to have access to a US Dollar denominated account with their COMEX
clearing member.	The other contract is denominated in offshore Chinese Renminbi (“CNH”), with a commodity code of SGC. Prices for thiscontract will be quoted in CNH per gram. Variation margin payments will be made in CNH, and participants wishing to use
this contract will need to have access to a CNH denominated account with their COMEX clearing member.	Both the contracts are cash settled. Therefore, a gold account at the Shanghai Gold Exchange is not required to support
these products.
10.	What is the regulatory status of these products?	These products are listed on COMEX which is regulated by the Commodity Futures Trading Commission (CFTC). The Shanghai
Gold Exchange which generates the reference price is regulated by the People’s Bank of China (PBOC).

For more information on our suite of gold products, please visit cmegroup.com/gold,or email metals@cmegroup.com

cmegroup.com

Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs)
within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it ispossible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles andonly a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade.
CME Group, the Globe Logo, CME, Globex, E-Mini, CME Direct, CME DataMine and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT is a trademark of the Board of Trade ofthe City of Chicago, Inc. NYMEX is a trademark of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners.
The information within this communication has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in thiscommunication are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules
and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.
Copyright © 2019 CME Group Inc. All rights reserved

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