Article 23 Based on the trading and settlement results, Sinoruex shall transfer the net payables and receivables in lump-sum accordingly on a daily basis. 

Article 24 Sinoruex adopts a guarantee fund system. Guarantee fund includes settlement fund and contract-honoring guarantee fund.

Settlement fund refers to the fund deposited by a member in a settlement account designated by Sinoruex for ensuring payments. It is not tied up to any transaction or transaction contract.

Contract-honoring guarantee fund refers to the fund deposited by a member in a settlement account designated by Sinoruex for ensuring the honoring of contracts. It is tied up to the transaction contract. When the trading parties are engaged in a transaction, Sinoruex would freeze the contract-honoring guarantee fund of both sides in advance. The frozen guarantee fund would be released or turned into settlement fund after the daily settlement and the complete contract enforcement.

Article 25 Sinoruex shall open a special settlement account in a designated settlement bank for the guarantee fund and other related items of members. It shall keep detailed accounting for each member’s guarantee fund separately, including a daily record of the incoming/outgoing fund, changes in the guarantee fund and charges of commission for each member.

Each member shall open a special settlement account in a designated bank for the transfer of guarantee fund and other related financial items. When opening, altering or canceling the settlement account, a member shall inform Sinoruex in written form and sign or change relevant contracts.

Article 26 Transactions in US dollars shall be settled as follows:
1. Sinoruex shall open a special foreign currency settlement account for guarantee fund in US dollars. Members within the territories of China may choose to deposit the guarantee fund in either US dollars or RMB.
2. For a transaction in US dollars, Sinoruex shall convert the guarantee fund deposited in RMB by the trading member into US dollars at the exchange rate published by the Central Bank of China on the day of settlement. After the transaction, the trading member shall increase the guarantee fund to the required level. When the trading parties honor the contract, the guarantee fund shall be released. When one trading party breaches the contract, Sinoruex shall convert an appropriate amount of the guarantee fund into US dollars at the current official exchange rate according to the penalty provision in the contract and transfer that amount to the contract-abiding party as compensation.
3. The guarantee fund in foreign currency will not be converted into RMB by Sinoruex. Upon completing required obligations, a member may get back the guarantee fund in the original currency. An overseas member shall deposit the guarantee fund and pay for commission both in foreign currency.

Article 27 The guarantee fund shall be collected at a certain percentage of the total value involved in the trading. The specific percentage shall be determined according to membership grading and market risks. Sinoruex may adjust the percentage as it deems necessary. 

Article 28 The guarantee fund can be in forms of currency, rights certificate or commodity (The value of rights certificate or commodity shall be calculated at a certain discount).

The commodity or rights certificate deposited at Sinoruex will be calculated at 50%-80% of their market value and the mortgage can only be used as guarantee fund and shall not be used for payment. The maximum mortgage period shall not exceed six months. The member who deposits commodity or rights certificate shall pay at least 0.03% of the mortgage every day to Sinoruex as service fees. When the mortgage period is less than one day, the service fees will be charged for one full day.

Article 29 The balance of the settlement fund is calculated as follows:

Balance of the settlement fund = balance of the settlement fund on the previous trading day + contract-honoring guarantee fund on the previous trading day － contract-honoring guarantee fund on the current trading day + discounted value of commodities and rights certificates as guarantee fund on the current trading day - discounted value of commodities and rights certificates as guarantee fund on the previous trading day + incoming transfer of payment – outgoing transfer of payment + additional deposit － withdrawal of deposit － commissions

Article 30 To ensure the smooth proceeding of transactions, each member is required to deposit a sufficient amount of settlement fund in the settlement account designated by the Sinoruex. In the case that a member’s account has fund shortage after the closing of daily trading, Sinoruex would notify the member of the need to increase deposit to the required level before the next trading day starts.

Article 31 Sinoruex shall provide information of settlement to members through the issuance of settlement bills or other channels. Members can retrieve settlement information through internet. A member is regarded as having received and endorsed the settlement if they do not raise any question in this regard thirty minutes before the opening of trading on the next day. 

When settlement information cannot be provided on time due to unexpected reasons, Sinoruex would inform members in a timely manner of the new time for providing the settlement information.

Article 32 Members may deposit additional money into or withdraw money from their accounts at places designated by Sinoruex or conduct electronic transfer through the trading system of Sinoruex. The guarantee or settlement fund can only be transferred to the special settlement account. Members shall take full legal responsibilities for the legality and validity of their financial transfer.

Article 33 The extent of members’ withdrawal of money from their account during the mortgage period is calculated as follows:

When the mortgage from commodities and rights certificates is more than the contract-honoring guarantee fund, the amount that can be withdrawn = balance of settlement fund + balance of contract-honoring guarantee fund – mortgage from commodities and rights certificates