Foreign role in futures market mulled

By WU YIYAO in Shanghai | China Daily | Updated: 2017-05-26 07:21

The authorities are actively considering allowing foreign investors to participate in futures trading in China, one of the leaders of the country's main securities regulatory body said on Thursday.

Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, made the remarks at a conference on the derivatives market in Shanghai - addressing the importance of market building, opening the market up, liquidity, innovation and compliance.

Fang said that China will continue to prepare for the launch of stock index options.

He also said that regulators are actively studying allowing commercial banks to participate in the treasury futures market, and will introduce more varieties of commodity futures, including those covering agricultural products and resources.

China's futures market has been developing steadily amid reforms, but still needed to enhance its capabilities and market tools, Fang said. Trading of quite a few products had not been active in recent months, and wildly volatile prices could affect the risk management of companies, Fang said.

"The CSRC is accelerating preparations for the launch of crude oil futures," he added.

By the end of this year, the Shanghai International Energy Exchange will launch China's first crude oil futures product that has adopted international trading standards, according to Jin Xingming, deputy secretary-general of the Shanghai municipal government.

The Shanghai International Energy Exchange said in a note that the crude oil futures product to be launched will be renminbi-denominated.

"China plays a significant role in the crude oil market given the size of consumption and imports," said Jin Xiao, an analyst with Orient Futures.

Jin said that the renminbi-denominated crude oil futures product would help Chinese companies in the supply chain hedge currency exchange rate risks for oil prices, and help increase global use of the renminbi.

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