Expanding future for derivatives market
By Wang Yanlin and Leo Zhang |
June 27, 2010, Sunday
|
Print Edition
Print Edition
CHINA is to expand its financial derivatives market and allow more institutions to participate in margin trading and short selling to boost liquidity and turnover, the country's top securities regulator said.
Shang Fulin, chairman of the China Securities Regulatory Commission, also told the Lujiazui Forum that dealing with insider trading had become a top priority.
"After we steadily launched index futures, we have to gauge our regulatory abilities in order to push forward new products," Shang said. "We should gradually form an effective pricing mechanism and risk-control system."
In April, China unveiled the country's first stock index futures based on the CSI 300 index, covering the biggest 300 mainland-listed companies, in order to help investors hedge against trading risks.
In March, it introduced margin trading and short selling, limited to projects involving a handful of brokers.
"We will conduct analysis on the current operation of margin trading and short selling," Shang said.
"If risks are under control, we will expand the trial."
On supervision, Shang said: "System reforms in the past years have effectively eased previous problems such as market manipulation.
"But," he added, "some new problems like insider trading among corporate mergers and acquisitions have become prominent."
Some traders and fund managers had already been expelled from the market after they used inside information to reap profits.
Shang Fulin, chairman of the China Securities Regulatory Commission, also told the Lujiazui Forum that dealing with insider trading had become a top priority.
"After we steadily launched index futures, we have to gauge our regulatory abilities in order to push forward new products," Shang said. "We should gradually form an effective pricing mechanism and risk-control system."
In April, China unveiled the country's first stock index futures based on the CSI 300 index, covering the biggest 300 mainland-listed companies, in order to help investors hedge against trading risks.
In March, it introduced margin trading and short selling, limited to projects involving a handful of brokers.
"We will conduct analysis on the current operation of margin trading and short selling," Shang said.
"If risks are under control, we will expand the trial."
On supervision, Shang said: "System reforms in the past years have effectively eased previous problems such as market manipulation.
"But," he added, "some new problems like insider trading among corporate mergers and acquisitions have become prominent."
Some traders and fund managers had already been expelled from the market after they used inside information to reap profits.
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