Chapter I   General Provisions

Article 1 These measures are formulated in accordance with the trading rules of hkipx and relevant business systems in order to strengthen the risk management of online trading of intellectual property products, standardize trading behaviors, protect the legitimate rights and interests of both parties and the social and public interests, and ensure the normal trading of Hong Kong Intellectual Property Exchange (hereinafter referred to as hkipx).

Article 2 in accordance with the principles of openness, fairness, impartiality and public trust, hkipx is mainly responsible for building a platform, providing services and witnessing transactions. The evaluation and custody of intellectual property products are completed by an independent third party.

Article 3 risk management of hkipx adopts risk warning system, margin system and limit system.

Article 4 dealers (hereinafter referred to as members), third-party service institutions and relevant participants fully understand and agree to abide by the measures.

Chapter II Risk Warning System

Article 5 hkipx implements risk warning system. When hkipx considers it necessary, hkipx can take one or more of the measures, such as requiring members to report the situation, reminding by conversation, warning in writing, restricting trading, limiting cash withdrawal and issuing risk warning announcement, respectively or simultaneously, to warn and control risks.

Article 6 in case of any of the following circumstances, hkipx has the right to require members to report the situation or meet with members to talk to remind them of risks; if the situation is serious, hkipx may restrict all or part of the transaction, limit the withdrawal of funds or freeze intellectual property products, and determine that the transaction is invalid in whole or in part, etc

（1） There are abnormal changes in the transaction price, including but not limited to the drastic changes in unit time price;

（2） Abnormal trading behaviors of members include, but are not limited to, excessive turnover of trading members, high conversion rate of handling charges, continuous large-scale declaration, up and down limit declaration and false declaration;

（3） Abnormal changes in orders and funds of members, including but not limited to a large number of increase and decrease of positions, suspected large amount of transactions between related accounts or frequent reverse transactions;

（4） Abnormal positions of members, including but not limited to the high proportion of positions;

（5） Members are suspected of violating the rules, involving judicial investigation or litigation cases;

（6） Other circumstances identified by hkipx.

Article 7 in case of any of the following circumstances, hkipx may send a risk warning letter to all members:

（1） There are abnormal changes in domestic and foreign market transactions;

（2） Members are suspected of violating the rules;

（3） There are great risks in member transactions;

（4） Service providers carry out brokerage business in violation of regulations;

（5） Other abnormal conditions identified by hkipx.

Article 8 in case of any of the following circumstances, hkipx may restrict all or part of the transaction, restrict the withdrawal of funds or freeze intellectual property products, and determine that the transaction is invalid in whole or in part, etc

（1） Failing to report and talk as required by hkipx;

（2） Deliberately concealing facts, concealing, misreporting or omitting important information;

（3） Intentionally destroying the evidence of violation of the contract and failing to cooperate with the investigation of hkipx;

（4） It is verified that there is fraud;

（5） Participating in market manipulation after verification;

（6） Malicious collusion with a third-party service agency to affect the objective and fair performance of the third-party service agency;

（7） Other violations identified by hkipx.

Article 9 in case of any of the following circumstances, hkipx has the right to take such measures as suspending trading, delaying the opening of the market, closing the market ahead of schedule, special suspension of trading and suspension of entry into settlement according to the situation, and hkipx shall make an announcement, and the trading time shall not be postponed.

（1） Force majeure, accidents, and illegal intrusion of trading system, etc;

（2） System, equipment, Internet, communication or power failure, etc;

（3） The loss and damage of intellectual property products have significant changes, as well as being sealed up by the court, which may affect the performance of the contract;

（4） Hkipx believes that other circumstances seriously affect normal trading.

Article 10 hkipx shall timely announce the decision of technical suspension or temporary suspension through website and relevant media. After the reasons for technical suspension or temporary market suspension are eliminated, hkipx may decide to resume trading and make an announcement.

Article 11 for transactions with serious consequences due to force majeure, accidents, illegal intrusion of trading system and other abnormal conditions identified by hkipx, hkipx may take appropriate measures or determine them invalid. Hkipx shall not be responsible for the loss caused by the corresponding measures taken by hkipx due to abnormal conditions.

Chapter III deposit system

Article 12 hkipx shall implement a trading margin system. Margin refers to the funds paid by members in accordance with the prescribed standards and used for settlement and performance guarantee. Prior to the start of trading, members shall deposit sufficient margin in their capital account.

Article 13 when members issue bidding orders, the trading system will automatically lock the corresponding amount of margin.

Article 14 the margin ratio of hkipx trading shall be 100%.

Chapter IV price limit system

Article 15 hkipx shall implement a price limit system. The limit is set by hkipx, which can adjust the limit according to the market risk.

Article 16 the price limit on the first day of listing of new intellectual property rights products shall be ± 30% of the listing guidance price, while that of normal trading products shall be ± 10% of the closing price of the previous trading day.

Article 17 in the T + n trading cycle, for three consecutive trading days, the trading center has the right to temporarily suspend the trading of intellectual property products listed for trading, adjust the rise and fall, and suspend the trading, etc.

Chapter V supplementary provisions

Article 18 the right of amendment and interpretation of these rules belongs to hkipx. If there is any amendment to the rules, hkipx will publish it in the form of announcement.

Article 19 These Rules shall come into force as of the date of promulgation.