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Tooth and Claw: Navigating Enforcement at GFEX

Written by RegTrail | Jan 30, 2026 1:30:00 PM

The Guangzhou Futures Exchange (GFEX) recently published its 2025 report on "Self-Regulatory Management," and the findings point to a commodities exchange that is both capable and willing to act against members involved in illicit behaviour. Known for specialising in materials critical to the green energy transition, GFEX has demonstrated that its "Tooth and Claw Regulation" approach is more than just a metaphor.

The Theme: Green Commodities Meet "Tooth and Claw"

GFEX is an increasingly important trading hub for commodities, powering the technology sector and the global energy transition. It lists futures for lithium carbonate, industrial silicon, and polysilicon—the essential building blocks for electric vehicle batteries, solar panels, and semiconductors.

While the exchange supports China’s green economy, the report highlights a remarkably assertive enforcement culture designed to maintain market order. You can read the original report in Mandarin here

Key Insights from the GFEX 2025 Report

The exchange is implementing a "zero tolerance" approach to rule breaches. For firms active in these markets, the followingdevelopments are particularly significant:

    • Robust Enforcement Actions: In 2025, GFEX utilised several harsh enforcement measures, including the forced liquidation of positions and the confiscation of profits.
    • Active Surveillance: The exchange addressed over 200 instances of abnormal trading. This included banning new positions for groups found to be circumventing position limits or abusing hedging quotas.
    • On-site Inspections: GFEX conducted on-site reviews of 17 member firms across six local jurisdictions, covering everything from institutional frameworks to technical systems.
    • Focus on Algorithmic Trading: New "Algorithmic Trading Management Measures" were released to standardise high-frequency trading (HFT). Notably, fee reductions for HFT were abolished during the year.
    • Proprietary Surveillance Tech: GFEX has established its own technology subsidiary to build advanced, next-generation surveillance and monitoring tools, which officially went live at the end of 2025.

Why This Matters for Compliance

The "Tooth and Claw" rhetoric reflects a strict alignment with Chinese government principles regarding national economic stability. For international firms, this potentially means a heightened compliancerisk.

RegTrail provides comprehensive coverage of Chinese commodities exchanges, including GFEX, ensuring you stay ahead of these rapid regulatory shifts in the upstream sectors supporting green energy markets.