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Futures trading rules to be tough

CHINA will introduce strict entry thresholds for investors in the country's first stock index futures to contain risk and prevent speculation, the head of China Financial Futures Exchange said yesterday.

An investor should own cash of at least 500,000 yuan (US$73,000) to qualify to trade index futures, said Zhu Yuchen, chief executive officer of the financial futures exchange, at the Lujiazui Forum.

The so-called "qualified investor" system will also require investors to pass a knowledge test about financial futures and undertake trial trading organized by the bourse for at least five sessions, Zhu said.

"The requirements are set to curb risks and protect the interest of small investors," he said during a forum panel discussion. "We are very serious about the product launch and high thresholds will benefit the market's growth in the initial stage."

China has been preparing for its first stock index futures for about three years. It launched the financial futures exchange in Shanghai in September 2006 but it has yet to trade any product.

The bourse's first index futures will be based on the country's benchmark CSI 300 Index, which tracks the biggest 300 firms listed in Shanghai and Shenzhen by market value.


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