The Shanghai International Energy Exchange published proposed rules to effectuate the trading of its crude oil futures contracts by foreigners based outside China. This publication follows the release in late December 2014 by the China Securities Regulatory Commission of proposed interim measures to permit foreigners outside China to access China’s futures markets generally. (Click here to see details regarding the interim measures in the article, “China Regulator to Permit Designated Domestic Futures Contracts to be Traded by Foreigners” in a January 23, 2015 Advisorypublished by Katten Muchin Rosenman LLP.) SIEE’s proposed rules set forth requirements for overseas brokers and traders to apply for SIEE Overseas Special Participant status and access the SIEE directly. Among other requirements, overseas brokers would be required to have net capital of no less than RMB 30 million (approximately US $5 million); be in business for no less than two years; and appoint a contact person in China. Overseas traders would have similar requirements, except their minimum net capital requirement would be RMB 10 million (approximately US $1.6 million) and they would not have to have been in business for at least two years. An overseas broker would have to open an individual trading account for each client with a regulated futures broker in China to clear the transactions (subject to a brokerage agreement with certain required provisions), although customer funds could apparently be maintained on an omnibus basis. An overseas broker could have multiple relationships with regulated futures brokers in China, but could introduce a single overseas trader only to one local broker. Initial margin could be posted in foreign currency, although there is no mention of what currency would be used to settle daily marked to markets gains and losses. Both overseas brokers and overseas traders would be required to advise the SIEE “promptly” if there was an “occurrence of litigation or financial dispute” or they were investigated by a regulator “for suspected violation of laws and regulations,” among other matters. Overseas brokers and traders would be required to retain documents related to their SIEE activities for at least 20 years. Overseas brokers (but not overseas traders) would also have to reside in a country that has entered into a memorandum of understanding on supervisory cooperation with the CSRC. (The CSRC and the Commodity Futures Trading Commission entered into a MOU on January 18, 2002.) Comments are due by April 18, 2015.