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QFIIs may get to trade in futures

SHANGHAI will consider foreign participation in its futures market, and support the introduction of more commodity contracts as part of the city's ambitions to become a global financial hub by 2020.

In a statement yesterday, the city government said it will explore ways for qualified foreign institutional investors to trade on the Shanghai Futures Exchange, the nation's biggest commodity-futures bourse by value. But it didn't give a timetable of when that might occur.

The idea for QFIIs to trade in the domestic futures market, now off-limits to them, has been considered for years as this could help boost capital inflows and trading volumes. But analysts said allowing QFIIs to do so needs a legal framework. China has allowed QFIIs to trade in its stock market.

The city government will also support the Shanghai bourse to gradually introduce contracts for energy and chemical products like crude oil, gasoline, diesel and tar, and help it become a benchmark setter for crude in the Asia Pacific, it said, again without giving a timetable.

It will also back the local futures bourse to develop lead and silver futures and copper and aluminum options. Options are contracts that give the right though not the obligation to buy or sell a stock at a set price and date.

The Shanghai futures exchange said last year it aims to be a major commodity bourse in Asia Pacific in five years, by unveiling one or two new contracts annually.


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